Key Takeaways
- D.R. Horton, the largest U.S. homebuilder by volume for 25 straight years, saw net sales orders fall 7% to 18,619 homes in its fiscal fourth quarter ended September 30, 2026, while its cancellation rate rose to 23% from 20% a year earlier, according to its earnings release on October 29, 2026.
- The company closed 22,915 homes in the quarter and finished the year with 8,800 completed but unsold homes, and it guided fiscal 2027 revenue to $30.0 billion to $32.0 billion, below fiscal 2026 revenue of $33.0 billion.
- For beginner investors, the fresh signal is not just slower orders.
- It is the stack of finished, unsold new homes at the nation’s biggest builder, at the same moment the builder says incentives will stay elevated in fiscal 2027.
Most housing headlines this week were about resale prices and mortgage rates. This one is about new construction, where the seller is a public company with a balance sheet, a quarterly deadline, and thousands of finished homes to move.
That difference matters. A homeowner can often wait. A builder carrying completed inventory has a stronger reason to negotiate on price, closing costs, and rate buydowns, especially in the communities where finished homes are piling up.
Orders Fell, Cancellations Rose, and Closings Only Slipped 2%
Homebuilding revenue for the fourth quarter decreased 2% to $8.4 billion, and homes closed decreased 2% to 22,915 homes. Net sales orders decreased 7% to 18,619 homes and 9% in value to $6.6 billion.
The cancellation rate tells the sharper story. At 23%, nearly one in four gross orders in the quarter did not survive to closing, up from 20% in the prior year quarter.
Executive Chairman David Auld put the cause in one sentence in the release: “Housing market conditions became more challenging during the fourth quarter as rising mortgage rates, affordability constraints and cautious consumer sentiment continued to pressure new home demand.”
That pressure lines up with the rate picture covered in the Freddie Mac survey that put the 30-year fixed rate at 7.18% on November 5. It also lines up with the demand drop in Zillow’s October report, where newly pending sales fell 16.8% year over year.
| D.R. Horton, fiscal Q4 ended Sept. 30, 2026 | Result | Year-over-year change |
|---|---|---|
| Net sales orders | 18,619 homes / $6.6 billion | Down 7% in homes, down 9% in value |
| Cancellation rate | 23% | Up from 20% |
| Homes closed | 22,915 | Down 2% |
| Home sales revenues | $8.4 billion | Down 2% |
| Net income attributable to D.R. Horton | $741.8 million / $2.67 per diluted share | Down 18% / down 12% |
| Consolidated revenues | $9.4 billion | Pre-tax income $1.0 billion, 10.8% margin |
For the full fiscal year, the company still delivered at scale. It closed 84,202 homes, generated $33.0 billion in consolidated revenues, and earned $2.9 billion in net income, or $10.11 per diluted share.
Auld noted the milestone in the release: “The D.R. Horton team completed our 25th consecutive year as America’s largest builder by volume, and we are proud to have provided homeownership to more than 84,000 individuals and families during fiscal 2026, including approximately 43,500 first-time homebuyers.”
The Number Most Readers Will Miss: 8,800 Completed, Unsold Homes
At fiscal year end, D.R. Horton had 28,200 homes in inventory, of which 17,700 were unsold. Of those unsold homes, 8,800 were already completed, including 600 that had been completed for greater than six months.
That is the actionable insight in this release. A completed home is ready to close fast, and it costs the builder money every month it sits. An unfinished home in a future phase does not carry the same urgency.
- Completed and unsold: 8,800 homes, the fastest to close and often the most negotiable.
- Completed for more than six months: 600 homes, the oldest finished stock in the count.
- Total unsold: 17,700 of 28,200 homes in inventory at September 30, 2026.
The resale market is sending a similar message on choice. In Redfin’s update for the four weeks ending November 1, sale prices fell for a third straight week while asking prices rose. New construction adds a second lane for buyers who are willing to compare both.
The rental side of the release also shows strain. Rental revenues were $647.1 million in the quarter with a pre-tax loss of $25.3 million, which includes $91.4 million of inventory impairment charges related to nine multi-family rental projects.
D.R. Horton operates in 128 markets in 38 states, with home sales prices generally ranging from $200,000 to $700,000, according to the release. That spread means the national totals hide local differences, and the negotiating power will be strongest where completed inventory is deepest in a specific community.
Guidance for 2027 Is Lower, and Incentives Stay Elevated
For fiscal 2027, the company guided consolidated revenues to $30.0 billion to $32.0 billion and homes closed to 79,000 to 84,000. Even the top of the closings range sits just below the 84,202 homes closed in fiscal 2026.
Auld was direct about pricing help: “We expect incentives to remain elevated in fiscal 2027, the extent of which will depend on market conditions throughout the year.”
The rest of the guidance shows a company protecting cash while it guides lower:
- Income tax rate of approximately 25.5%.
- Consolidated cash flow provided by operations of approximately $3.5 billion, the same as the $3.5 billion generated in fiscal 2026.
- Share repurchases of approximately $3.0 billion and dividend payments of approximately $500 million.
- A quarterly dividend increased 11% to $0.50 per share, payable on November 19, 2026 to stockholders of record on November 12, 2026.
Total liquidity at year end was $7.2 billion, and debt to total capital was 20.8%. This is not a distressed builder. It is a large, liquid builder choosing incentives and slower volume over holding price and letting finished homes sit.
For a beginner investor, use the release this way:
- Shop completed inventory first, not just model homes and future phases, and ask what is finished and unsold in that community.
- Ask for the full incentive in dollars, including any rate buydown and closing-cost help, then compare the monthly payment with a resale home at the same price.
- Use the 23% cancellation rate as context, not as a guarantee. Cancellations free up finished homes, but terms vary by community and buyer, exactly as the company manages pricing community by community.
- Run rental math on the actual payment after incentives, not the list price, and leave taxes, insurance, and maintenance in the calculation.
Read the primary release yourself in D.R. Horton’s fourth quarter and fiscal 2026 earnings release on Business Wire before acting on any single community offer.
Data: D.R. Horton, Inc., fourth quarter and fiscal 2026 earnings release, October 29, 2026, for the three months and fiscal year ended September 30, 2026. Guidance is a management projection for fiscal 2027, not a completed result.
