D.R. Horton beats quarterly estimates as incentives boost home sales

Jan 20 (Reuters) - U.S. homebuilder D.R. Horton DHI.N posted first-quarter profit and revenue above Wall Street's estimates on Tuesday, as its incentive offers for buyers and the Federal Reserve's interest-rate cuts boosted home sales.

Homebuilders in the U.S. have been leaning on mortgage rate buydowns, and offering smaller and cheaper home options, to lure customers who have delayed home buying due to high inflation.

The incentives helped the company to drive a 3% increase in its net sales orders to 18,300 homes in the first quarter ended December 31.

Shares of the company were up 4% in premarket trading.

"We expect our sales incentives to remain elevated in fiscal 2026," said Executive Chairman David Auld. He added that affordability pressures and cautious consumer sentiment were still pressuring demand for new homes.

The average rate on the popular 30-year fixed-rate mortgage declined to 6.06% as of January 15, 2026, the lowest level in more than three years, mortgage finance agency Freddie Mac said. It averaged 7.04% during the same period a year ago.

U.S. President Donald Trump earlier this month ordered government-sponsored Freddie Mac and Fannie Mae to buy $200 billion in mortgage bonds, in an attempt to drive down borrowing costs.

Trump has also proposed barring institutional investors from buying single-family homes, a move the White House said would ensure more inventory remains available for everyday American families. Trump announced the proposal in a Truth Social post, writing, "People live in homes, not corporations."

D.R. Horton posted a profit of $2.03 per share in the first quarter, above estimates of $1.93 per share, according to data compiled by LSEG.

The Arlington, Texas-based company's revenue fell to $6.89 billion from $7.61 billion a year ago, but came above analysts' estimate of $6.60 billion.