D.R. Horton Q3 2025 Earnings Report

D.R. Horton EPS Results

• Actual EPS: $3.36
• Consensus EPS: $2.90
• Beat/Miss: Beat by +$0.46
• One Year Ago EPS: $4.10

D.R. Horton Revenue Results

• Actual Revenue: $9.23 billion
• Expected Revenue: $8.80 billion
• Beat/Miss: Beat by +$421.08 million
• YoY Revenue Growth: -7.40%

D.R. Horton Announcement Details

• Quarter: Q3 2025
• Date: 7/22/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, July 22, 2025
• Conference Call Time: 8:30AM ET

D.R. Horton (NYSE:DHI) operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R. Horton, America's Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as townhomes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; and owns non-residential real estate, including ranch land and improvements. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

D.R. Horton Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: DR Horton’s Q3 results beat expectations, reporting EPS of $3.36, $9.2 B in revenue and a 14.7% pre-tax margin, driven by 23,160 home closings and a 21.8% gross margin.
• Negative Sentiment: Incentives have trended higher throughout the quarter and are expected to remain elevated in Q4, with management guiding to a 50 bps decline in home sales gross margin to 21–21.5%.
• Positive Sentiment: Over the past 12 months, the company generated $2.9 B of operating cash flow and returned $4.6 B to shareholders, raising its FY25 share repurchase plan to $4.2–4.4 B.
• Neutral Sentiment: The company ended Q3 with 38,400 homes in inventory (25,000 unsold) and improved construction cycle times by about two weeks year-over-year, while maintaining a 600,000-lot land position.

Presentation

[Operator]

Good morning, and welcome to the Third Quarter twenty twenty five Earnings Conference Call for D. R. Horton, America's Builder. We'll open the floor for your questions and comments after the presentation. I would now like to turn the call over to Jessica Hansen, Senior Vice President of Communications for D. R. Horton.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Thank you, Matthew, and good morning. Welcome to our call to discuss our financial results for the third quarter of fiscal twenty twenty five. Before we get started, today's call includes forward looking statements as defined by the Private Securities Litigation Reform Act of 1995. Although D. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

All forward looking statements are based upon information available to D. O. Horton on the date of this conference call, and D. O. Horton does not undertake any obligation to publicly update or revise any forward looking statements.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Additional information about factors that could lead to material changes in performance is contained in D. R. Horton's annual report on Form 10 ks and its most recent quarterly report on Form 10 Q, both of which are filed with the Securities and Exchange Commission. This morning's earnings release can be found on our website at investor.drhorton.com, and we plan to file our 10 Q later this week. After this call, we will post updated investor and supplementary data presentations to our Investor Relations site on the Presentations section under News and Events for your reference.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Now, I will turn the call over to Paul Romanowski, our President and CEO.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Thank you, Jessica, and good morning. I'm pleased to also be joined on this call by Mike Murray, our Executive Vice President and Chief Operating Officer, and Bill Wheat, our Executive Vice President and Chief Financial Officer. The Doctor Horton team exceeded our expectations and delivered solid results for the third quarter, highlighted by earnings of $3.36 per diluted share. Our consolidated pre tax income was $1,400,000,000 on $9,200,000,000 of revenues, with a pre tax profit margin of 14.7%. Our net sales orders in the third quarter were flat with the prior year quarter and increased 3% sequentially.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Our tenured operators continue to respond to market conditions with discipline, balancing pace versus price to maximize returns in each of our communities, achieving 23,160 homes closed this quarter with a home sales gross margin of 21.8%, both of which were above our guidance range. We remain focused on maximizing capital efficiency to generate substantial operating cash flows and deliver compelling returns to our shareholders. Over the past twelve months, we have generated $2,900,000,000 of cash from operations, and we have returned $4,600,000,000 to shareholders through repurchases and dividends. For the trailing 12 ended June 30, our homebuilding pre tax return on inventory was 22.1%, while our consolidated returns on equity and assets were 16.111.1%. Our return on assets ranks in the top 15% of all S and P 500 companies for the past three, five and ten year periods, demonstrating that our disciplined, returns focused operating model produces sustainable results and positions us well for continued value creation.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

New home demand continues to be impacted by ongoing affordability constraints and cautious consumer sentiment. Where necessary, we have increased incentives to drive traffic and incremental sales. Our cancellation rate remains at the low end of our historical range, indicating that buyers in today's market are able to qualify financially and are committed to their home purchase, despite the volatility and uncertainty of the current economic environment. We expect our sales incentives to remain elevated and increase further during the fourth quarter, the extent to which will depend on the strength of demand, changes in mortgage interest rates and other market conditions. With 54% of our third quarter closings also sold in the same quarter, Our sales, incentive levels and gross margin are generally representative of current market conditions.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

We will continue to tailor our product offerings, utilize sales incentives and adjust the number of homes in inventory based on demand in each of our markets. We are well positioned, offering our customers an attractive value proposition with quality homes at affordable price points, and we have a positive outlook for the housing market over the medium to long term. Mike?

[Michael Murray, EVP & COO at D.R. Horton]

Earnings for the 2025 were $3.36 per diluted share compared to $4.1 per share in the prior year quarter. Net income for the quarter was $1,000,000,000 on consolidated revenues of $9,200,000,000 Our third quarter home sales revenues were $8,600,000,000 on 23,160 homes closed compared to 9,200,000,000 on 24,155 homes closed in the prior year quarter. Our average closing price for the quarter was $369,600 down 1% sequentially and down 3% year over year. Bill?

[Bill Wheat, EVP & CFO at D.R. Horton]

For the third quarter, our net sales orders of 23,071 homes were flat with the prior year quarter, while order value decreased 3% to $8,400,000,000 Our cancellation rate for the quarter was 17%, up from 16% sequentially and down from 18% in the prior year quarter. Our average number of active selling communities was up 4% sequentially and up 12% year over year. The average price of net sales orders in the third quarter was $365,100 which was down 2% sequentially and down 4% from the prior year quarter.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Jessica? Our gross profit margin on home sales revenues in the third quarter 21.8%, which was flat sequentially and above our expectations. Although our home sales gross margin was stable from the second to third quarter, our incentive costs have increased on recent sales, so we expect our home sales gross margin to be lower in the fourth quarter compared to the third quarter. Our actual incentive levels and home sales gross margin for the fourth quarter will be dependent on the strength of demand, changes in mortgage interest rates, and other market conditions. Bill?

[Bill Wheat, EVP & CFO at D.R. Horton]

In the third quarter, our homebuilding SG and A expenses increased 2% from last year and homebuilding SG and A expense as a percentage of revenues was 7.8%, up 70 basis points from the same quarter in the prior year. Our community count is up 12% and our market count has increased 4% to 126 markets in 36 states. The investments we have made in our team and platform position us to continue producing strong returns, cash flow and market share gains, while remaining focused on managing our SG and A costs efficiently across our operations. Paul?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

We started 24,700 homes in the June, up 24% sequentially from the second quarter, and we expect our starts in the fourth quarter to be lower than the third quarter.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

We ended the quarter with 38,400 homes in inventory, of which 25,000 were unsold. 7,300 of our unsold homes at quarter end were completed, down 1,100 homes from March. 800 of our unsold homes have been completed for greater than six months. For homes we closed in the third quarter, our construction cycle times improved several days from the second quarter and approximately two weeks from a year ago. Our improved cycle times position us to turn our housing inventory faster and we will continue to manage our homes in inventory and starts pace based on market conditions. Mike?

[Michael Murray, EVP & COO at D.R. Horton]

Our homebuilding lot position at June 30 consisted of approximately 600,000 lots, of which 24% were owned and 76% were controlled through purchase contracts. We are actively managing our investments in lots, land and development based on current market conditions. During the quarter, our homebuilding segment incurred $16,000,000 of inventory impairments and wrote off $36,000,000 of option deposits and due diligence costs related to land and lot purchase contracts. We remain focused on our relationships with land developers across the country to allow us to build more homes on lots developed by others, which enhances our capital efficiency, returns and operational flexibility.

[Michael Murray, EVP & COO at D.R. Horton]

Of the homes we closed this quarter, 66% were on a lot developed by either Forestar or a third party, up from 64% in the prior year quarter. Our third quarter homebuilding investments in lots, land and development totaled $2,200,000,000 of which $1,400,000,000 was for finished lots, $610,000,000 was for land development and $140,000,000 was for land acquisition. Paul?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

In the third quarter, our rental operations generated $55,000,000 of pre tax income on $381,000,000 of revenues from the sale of ten sixty five single family rental homes and three twenty eight multifamily rental units. Our rental property inventory at June 30 was $3,100,000,000 which consisted of $2,500,000,000 of multifamily rental properties and $668,000,000 of single family rental properties.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

We remain focused on improving the capital efficiency and returns of our rental operations. Jessica?

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Forestar, our majority owned residential lot development company reported revenues for the third quarter of $391,000,000 on 3,605 lots sold with pre tax income of $44,000,000 Forestar's owned and controlled lot position at June 30 was 102,000 lots. 63% of Forestar's owned lots are under contract with or subject to a right of first offer to D. R. Horton.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Dollars $320,000,000 of our finished lots purchased in the third quarter were from Forestar. Forestar had $790,000,000 of liquidity at quarter end with a net debt to capital ratio of 28.9%. Our strategic relationship with Forestar is a vital component of our returns focused business model. Forestar's strong, separately capitalized balance sheet, substantial operating platform, and lot supply position them well to consistently provide essential finished lots to the homebuilding industry and aggregate significant market share. Mike?

[Michael Murray, EVP & COO at D.R. Horton]

Financial Services pre tax income for the third quarter was $81,000,000 on $228,000,000 of revenues, resulting in a pre tax profit margin of 35.7%. During the third quarter, our mortgage company handled the financing for 81% of our home buyers. Borrowers originating loans with DHI Mortgage this quarter had an average FICO score of seven twenty and an average loan to value ratio of 90%. First time homebuyers represented 64% of the closings handled by a mortgage company this quarter. Bill?

[Bill Wheat, EVP & CFO at D.R. Horton]

Our capital allocation strategy is disciplined and balanced to support an operating platform that produces compelling returns substantial operating cash flows. We have a strong balance sheet with low leverage and healthy liquidity, which provides us with significant financial flexibility to adapt to changing market conditions and opportunities. During the first nine months of the year, homebuilding cash provided by operations was $1,700,000,000 and consolidated cash provided by operations was $950,000,000 At June 30, we had $5,500,000,000 of consolidated liquidity consisting of $2,600,000,000 of cash and $2,900,000,000 of available capacity on our credit facilities. In May, we issued $500,000,000 of homebuilding senior notes due 2030 and in June we increased the capacity of our homebuilding revolving credit facility to $2,300,000,000 Debt at the end of the quarter totaled $7,200,000,000 with $500,000,000 of homebuilding senior notes maturing in the next twelve months. Our consolidated leverage at June 30 was 23.2% and we plan to maintain our leverage around 20% over the long term.

[Bill Wheat, EVP & CFO at D.R. Horton]

At June 30, our stockholders' equity was $24,100,000,000 and book value per share was $80.46 up 7% from a year ago. For the trailing twelve months ended June 30, our return on equity was 16.1% and our return on assets was 11.1%. During the quarter, we paid cash dividends of $0.40 per share totaling $122,000,000 and our board has declared a quarterly dividend at the same level to be paid in August. We repurchased 9,700,000.0 shares of common stock during the quarter for $1,200,000,000 and our fiscal year to date stock repurchases were $3,600,000,000 which reduced our outstanding share count by 9% from a year ago. Our remaining share repurchase authorization at June 30 was

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Looking forward to the fourth quarter, we currently expect to generate consolidated revenues in the range of $9,100,000,000 to $9,600,000,000 and homes closed by our homebuilding operations to be in the range of 23,500 to 24,000 homes. We expect our home sales gross margin for the fourth quarter to be in the range of 21 to 21.5% and our consolidated pre tax profit margin to be in the range of 13.6% to 14.1%. For the full year of fiscal twenty twenty five, we now expect to generate consolidated revenues of approximately $33,700,000,000 to $34,200,000,000 and homes closed for our homebuilding operations to be in the range of 85,000 to 85,500 homes. We still forecast an income tax rate for fiscal twenty twenty five of approximately 24%. Based on our fiscal year to date share repurchases, strong financial position, and expected operating cash flows of greater than $3,000,000,000 we now plan to repurchase $4,200,000,000 to $4,400,000,000 of our common stock in fiscal twenty twenty five, subject to the amount of cash flow generated and share price changes during the fourth quarter. Paul?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

In closing, our results and position reflect our experienced teams, industry leading market share, broad geographic footprint and focus on delivering quality homes at affordable price points. All of these are key components of our operating platform that support our ability to generate substantial operating cash flows and return capital to shareholders while continuing to aggregate market share. We recognize the current volatility and uncertainty in the economy and will continue to adjust to market conditions in a disciplined manner to enhance the long term value of our company. Looking ahead, we expect a solid finish to our fiscal year and we have a positive outlook for the housing market over the medium to long term. Thank you to the entire D.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

R. Horton family of employees, land developers, trade partners, vendors and real estate agents for your continued efforts and hard work. This concludes our prepared remarks. We will now host questions.

[Operator]

Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. Your first question is coming from Alan Ratner from Zelman and Associates. Your line is live.

[Alan Ratner, Managing Director at Zelman Partners LLC]

Hey guys, good morning. Congrats on the really strong results in a challenging market, really impressive. First question, I guess, the incentives first. You guided for an uptick here in the fourth quarter. Just curious if you can kind of talk through how incentives have trended through the quarter and into July?

[Alan Ratner, Managing Director at Zelman Partners LLC]

And how much of that increase is based on competitive pressures you're seeing from other builders in terms of trying to match them to maintain a certain sales pace versus you going out and trying to accelerate the level of activity a little bit? And what I'm looking at specifically is your start pace, which did increase pretty meaningfully sequentially in the fiscal third quarter.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Yes, Alan. I think the incentives throughout the quarter were a bit choppy and we've responded to the market. In terms of competition, kind of flows market to market. We look to maintain and we're able to exceed our guidance on closings and that really comes from our operators at a community level, managing their incentives to drive that result. That being said, you know, as we work through the end of spring and deep into this summer selling season, our incentives have increased some to maintain our pace, which is going to allow us to maintain our guidance at $8,585,005 for the year. So feel good about our position so far in the quarter.

[Michael Murray, EVP & COO at D.R. Horton]

And while starts increased in the second in the quarter, they were basically aligned trailing six months starts and trailing six months sales were almost the same number, kind of bringing those back in alignment.

[Alan Ratner, Managing Director at Zelman Partners LLC]

Got it. Yes, I noticed that obviously it pulled back quite a bit in the first half of the year, makes sense. Second question, just on the overall consumer, these aren't big changes, but if I look at some of the disclosures you gave on the mortgage side, looks like the average FICO score of your buyer is down about five points year over year. It's the lowest it's been in quite a while. LTV combined LTV is ticking higher as well.

[Alan Ratner, Managing Director at Zelman Partners LLC]

So just any commentary you can give on the strength of the consumer today and if you are seeing any impact at all from student loan repayments resuming and being reported to the credit agencies? Thank you.

[Michael Murray, EVP & COO at D.R. Horton]

We're seeing more of our buyers select an FHA product and we've probably been very heavily incentivizing that FHA product offering at $3.99 by our most attractive interest rate on the FHA so that's led more buyers to select that program. Not seeing a lot of impact at this point on the student loan area.

[Alan Ratner, Managing Director at Zelman Partners LLC]

Great, thank you very much.

[Operator]

Thank you. Your next question is coming from John Lovallo from UBS. Your line is live.

[John Lovallo, Homebuilders Analyst at UBS Group]

Good morning, guys. Thanks for taking my questions. So the fourth quarter gross margin outlook of 21% to 21.5 is similar to what you put out there for the third quarter, which you obviously beat by 30 basis points. Curious on that beat, was that just a little bit more volume than you expected? What sort of drove the beat?

[John Lovallo, Homebuilders Analyst at UBS Group]

And then in terms of the fourth quarter guide, is it really just the incentive load that or the potential incentive load that could drive that lower? Are you seeing anything change in terms of stick and break or land cost, things of that nature?

[Bill Wheat, EVP & CFO at D.R. Horton]

Yeah, John, in the third quarter, as Paul mentioned, our incentives were a bit choppy during the quarter. So as a quarter ago, as we looked into Q3, were seeing the potential for needing to increase incentives through the quarter. As it turned out, was a little more balanced and it didn't impact the closings in the margins quite as quickly in the quarter as we anticipated a quarter ago. So, some margins were flat, but we still, as we sit here today, see a trend of higher incentives, our recent sales and our currently our sales and backlog do reflect the higher cost of incentives. And so the closings that we see into July, August, September, we do expect margins to take that step down that we had previously anticipated would occur in Q3.

[John Lovallo, Homebuilders Analyst at UBS Group]

Understood. And then, it was good to see the share repurchase authorization or the assumption raised from about 4,000,000,000 to 4.2 to 4.4. I mean, what sort of drove the decision to move that higher?

[Bill Wheat, EVP & CFO at D.R. Horton]

It's always a balance between what we see in terms of our cash flow, our liquidity level, our leverage on our balance sheet and we're in our target range there. So we've had the room to be able to devote a bit more capital to repurchase this year. Obviously, with where our share price has been, we feel like the valuation is attractive. And so we're taking advantage of that during this time. And so the step up in the annual level is really just still within our target range for our balance sheet.

[John Lovallo, Homebuilders Analyst at UBS Group]

Okay, makes sense. Thank you, guys.

[Operator]

Thank you. Your next question is coming from Stephen Kim from Evercore ISI. Your line is live.

[Stephen Kim, Senior MD at Evercore ISI]

Yeah, thanks a lot, guys. I just wanna say, I mean, I think that gross margin guide is a lot better than, many had feared. So, we're we're pretty excited about that. I wanna talk about your SG and A, to start off with. You had pretty good, or strong overhead control.

[Stephen Kim, Senior MD at Evercore ISI]

I kind of beat you up about that last quarter a little bit because it was high. I was wondering, was there anything unusual in the quarter this time? And then from a long term perspective, is kind of the mid-7s still a kind of a good long term target for SG and A? And then finally on SG and A, I think you had said previously that SG and A is kind of sensitive to ASP. And so with your ASP, your average selling price coming down, should we expect this to put some near term pressure on your SG and A? Thanks.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Sure, Steve. The beat on SG and A is really a function of closings, higher closings volume. Even though our ASP was down, closings did exceed our expectations. In terms of where we expect our SG and A to be over the long term, I do think 7% to 8%, somewhere in that range. We're always away from that on an annual basis right now to your point when we have significant price appreciation say back in 2022 that does really good things for SG and A leverage.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

So our SG and A improvement from here on an annual basis is probably going to be pretty gradual. But we would expect to continue to make improvements in that in the future years.

[Stephen Kim, Senior MD at Evercore ISI]

Yeah. I appreciate that, Jessica. I do note though that you're, actually hold on, I'm having some tech issues. I do notice that your closings, while they were a little better than maybe what you thought, You actually performed quite well given that things on a year over year basis were still down in terms of closing. So it certainly seems like you've got a good control on your SG and A.

[Stephen Kim, Senior MD at Evercore ISI]

The second question I had regards your ROE and your cash conversion. I think you had said when we last met that you were targeting cash flow conversion of maybe 100%, which I think some folks have had a little bit of difficulty getting to. And I think we're of looking to see what could get your ROE higher than or up to near 20 longer term. Both of those seem to speak to maybe some changes on the balance sheet. And I wanted to talk to you or have you talk a little bit about what your longer term goals are with respect to your balance sheet.

[Stephen Kim, Senior MD at Evercore ISI]

Should we be expecting inventory or maybe rental or maybe four star or something in that realm that you would make changes to that would enable your ROE to sort of get a boost? And then maybe also if you bring some inventory levels down that that might also lead to stronger cash flow conversion. Maybe if you could just sort of opine a little bit on those two points, going higher potentially and also your cash flow conversion. Thanks.

[Bill Wheat, EVP & CFO at D.R. Horton]

Sure. Thanks, Steve. We are in position to generate much more consistent cash flow yield and cash flow conversion going forward. Today, we believe with where our platform is set up, where our balance sheet is, As I mentioned earlier, we're in our target range for leverage and liquidity. So we don't see major changes on that side of the balance sheet going forward.

[Bill Wheat, EVP & CFO at D.R. Horton]

We are very focused on inventory efficiency and improving inventory efficiency throughout all aspects of our operations in terms of our land holdings, our ownership of finished lots, and then our homes and inventory and our inventory turns there. We are very focused on continuing to improve those turns. And so with that, we do expect, we are setting expectations for ourselves to improve the efficiency of our inventory levels. And so that will be a key component to stabilizing and then improving our returns on assets as well as then our returns on equity and our consistency of cash flow generation. Back to the beginning, talked about cash flow yield, flow conversion.

[Bill Wheat, EVP & CFO at D.R. Horton]

We do expect this year's cash flow conversion to be near 100%. It may not be quite there on a consolidated basis. I think in our homebuilding operations, we would expect 100%, but consolidated maybe not quite there. As we look into future years, we would expect to be much more consistent than we have been in the past. The key to maintaining an ROE up closer to that 20% is to have a cash flow yield of north of 10% with strong inventory efficiency.

[Stephen Kim, Senior MD at Evercore ISI]

Great. That's really helpful, Thanks very much.

[Operator]

Thank you. Your next question is coming from Matthew Bouley from Barclays. Your line is live.

[Matthew Bouley, Senior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays]

Good morning, everyone. Thank you for taking the questions. I wanted to ask on the community count. I think you said it was up 4% sequentially and up 12% year over year. So curious if at this point, if you can give any kind of directional color or quantification on how 2026 may shape out just kind of given where you'll be entering the year?

[Matthew Bouley, Senior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays]

And are you don't know, you extending out or phasing out communities, anything along those lines to kind of manage some of that supply growth? So yes, just kind of early twenty six expectations and any changes on kind of how you're managing that pace of new community openings? Thank you.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Matthew, we do expect our community count to moderate some. It's been double digit for a bit now and we do expect it to drift back down into the mid to high single digit and then to kind of mid. We have opened a fair amount of markets. We've got another four markets out there and you know, that community count tends accelerate when we get out into those communities before they start to produce at a higher level of absorption per community. We feel really good about our footprint, about the, you know, the progress we've made in the new markets that we've opened, so not concerned about the level of community account we have and our operators have done a great job of managing their inventory throughout our communities and we certainly watch that closely responding to the absorption they're getting community by community.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Our total specs and completed, well our completed specs have come down as we expected to and we expect that to continue into the fourth quarter. Feel good about that, but we do expect to see moderation in community count as we move into '26.

[Matthew Bouley, Senior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays]

Okay, got it. Thank you for that. And then secondly, your peer this morning spoke about maybe towards the June when rates came down a little bit, it seemed like there might have been a bit of a positive response from buyers. And I'm obviously par paraphrasing what they said, but it sounded like then July was a little bit choppy. So just curious kind of what you guys were seeing around sort of the rate volatility and into the holiday and now into the early part of summer, just how are you guys been seeing traffic trends these past few weeks? Thank you.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Really, has been choppy. And that choppiness can be based on rate or the noise that you see in the news cycle these days. And what we have been pretty consistent with the rates we've been offering in the market, and because we have great relationships with our realtor community, they understand what we're offering in the market. I think that we have been able to maintain, you know, across our footprint in the communities that have been performing well, have continued to and so far we've been on track and pleased with what we've seen into July. The incentives are up as we've spoken to, that's why we guided to a little lower gross margin into the fourth quarter, but so far seems to be doing okay as far as driving traffic and the incremental sales we need.

[Matthew Bouley, Senior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays]

Got it. Alright. Thanks, Paul. Good luck, guys.

[Operator]

Thank you. Your next question is coming from Sam Reid from Wells Fargo. Your line is live.

[Sam Reid, Analyst at Wells Fargo]

Awesome. Thanks so much. Wanted to touch on your third party broker relationships really quickly. I believe you're somewhat unique in that you embed third party broker commissions in gross margin. So just curious if you had any color on broker attach rate and the rate you're paying those brokers this quarter and whether there was any step change in that number.

[Sam Reid, Analyst at Wells Fargo]

I believe one of your large competitors has been moving deeper into third party broker relationships. I'm curious if you've had to respond to that.

[Michael Murray, EVP & COO at D.R. Horton]

We've seen, always had a long term very good relationship with the brokerage community and I think we are still north of 80% with our broker attachment rates for our transactions. And we love it that they bring us a qualified buyer and they're only paid when the home closes. And so we continue to maintain strong relationships that have been part of our operating model for a long time and I envision it will be for a long time.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Our average commission stayed relatively flat. So on our overall closings, it's about two seventy basis points of impact if you wanted to look at apples to apples gross margin or SG and A versus other builders that record it differently.

[Sam Reid, Analyst at Wells Fargo]

No, that's very helpful. And then you've alluded a few times so far on the call the higher sequential incentives in the fourth quarter, and it's definitely a very topical today. Could you just talk to the composition though of those incentives that you're embedding in fourth quarter gross margin guide? Earlier in the call, think you mentioned you're leaning more into FHA. And to that end, kind of would it be reasonable to assume that perhaps some of that lower sequential on gross margin could be a function of more buyers utilizing that 3.99% buy down?

[Sam Reid, Analyst at Wells Fargo]

And then on that 3.99% rate, we've seen it in several markets across our checks, but just curious the uptake on it or do you think it's more of a traffic driver versus something the buyer actually ends up going with? Thanks.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Yeah, the three ninety nine rate where we have it is largely a traffic driver and it's community specific. I mean, I was in a division last week where they were offering everything from 3.99 to no BFC, no rate incentive, just market because they had solid, strong, consistent demand at the pace they expected in that community. You know, I think our average rate in backlog and or on closings was just over 5%. So, we really do have a range of incentives out there, including multiple programs, whether that's for a buyer that needs no money down or a special arm, which has taken a little better hold. You know, so our operators have done a great job of managing that rate incentive, but by and large that is the key incentive that has been driving sales for us.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

And that's the biggest component of the incentives that we're seeing in our mix.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

I think we've talked to the one to one and a half points below market pretty consistently. Last quarter, we were pretty transparent about we were probably closer to the one and a half on average, which is what the just over 5% Paul mentioned would incorporate.

[Sam Reid, Analyst at Wells Fargo]

Very helpful. Thanks so much. I'll pass it on.

[Operator]

Thank you. Your next question is coming from Eric Bosshard from Cleveland Research. Your line is live.

[Eric Bosshard, Analyst, CEO & Co - Founder at Cleveland Research Company]

Good morning. Two things. First of all, I'm just curious from a stick brick and land, where that is in terms of inflation and where you expect that to go from here?

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Yes. So on a year over year basis, we saw a nice decline in our stick and brick costs on a per square foot basis down about 2%. Sequentially, that was down about 1%. And then on the lot cost side, we did see the moderation. It's only been one quarter, so we'll see what happens next quarter.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

But we've talked about that moderating for some time. And so our lot cost was up a mid single digit percentage year over year and it was slightly, just ever so slightly down sequentially.

[Eric Bosshard, Analyst, CEO & Co - Founder at Cleveland Research Company]

From a lot cost perspective, is there anything that you're doing to influence this? Is there anything different in the market that you're seeing that suggests the path for that forward can be a bit of a flatter curve than we've seen?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

I think some of that is mix, down 1% quarter, I wouldn't expect that with consistency. We really haven't seen a significant shift in the land market. People have pulled back on purchases and delayed purchases and more from the land market negotiating terms and timing of those terms. There certainly are some opportunities out there, but not to the extent that we would expect given the mix of lots that we have across our whole portfolio, anything that's going to change those lot valuations significantly in the coming quarter.

[Eric Bosshard, Analyst, CEO & Co - Founder at Cleveland Research Company]

And then the second question from a product or price point, anything that you're seeing change? It was a quarter where you spoke to things were better than expected. I'm just curious from a product mix perspective, if there are areas of incremental outperformance or underperformance?

[Michael Murray, EVP & COO at D.R. Horton]

I think we continue to see strong adoption of some of the smaller plans we've introduced across our markets, probably not having a meaningful material impact on the overall consolidated results yet, but we're encouraged by how some of that smaller products been well received in the market and the utility it's providing for the buyers.

[Eric Bosshard, Analyst, CEO & Co - Founder at Cleveland Research Company]

Great, thank you.

[Operator]

Thank you. Your next question is coming from Trevor Allinson from Wolfe Research. Your line is live.

[Trevor Allinson, Director - Equity Research at Wolfe Research LLC]

Hi, good morning. Thank you for taking my questions. First one is just on your completed and age You've made some really good progress over the last couple of quarters working those down. We're also entering the slower time of the year.

[Trevor Allinson, Director - Equity Research at Wolfe Research LLC]

Just can you talk about how you feel about your completed inventory levels currently? And is there a target level for each of those numbers you'd like to be at as you exit your fiscal year?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

We feel very good about where we are and the progress that we've made in reducing our especially our completed spec count. We do expect that to continue to lower. Given our cycle times and continued improvement in cycle times, we just don't need to carry as many spec homes to generate the closings that we're looking for in the quarter and as we look into '26. So, we would expect that to continue to trend down. Don't have a specific target.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

We're going to respond to the market and make sure that we are starting homes largely in sync with our sales pace into the fourth quarter as we prep for fiscal twenty six.

[Trevor Allinson, Director - Equity Research at Wolfe Research LLC]

Okay, makes a lot of sense. And then second question is just your views on resale inventory in the markets you operate in. We've heard a lot of builders talk about retail inventory not being very competitive for new homes. At the same time, we've seen a pretty notable rise in resale inventory since really the middle of last year coincided with some overall demand weakness. So are you seeing more competition there from resale inventory?

[Trevor Allinson, Director - Equity Research at Wolfe Research LLC]

And if so, could you rank where that stands in terms of headwinds in context of affordability and sentiment issues? Thanks.

[Michael Murray, EVP & COO at D.R. Horton]

In the conversations I have with our sales folks and our models, I'm not hearing resale as being a big pushback from us or that we're losing customers to resale inventory. That housing stock is generally quite a bit older than it otherwise would have been because it sat dormant for a while and was not brought to market. Plus some of the interest rate incentives are not nearly as compelling that are being offered by the resale owners and it's still a very attractive position for buyers, especially new home buyers to come look at new home construction. First time home buyers look at new home construction.

[Trevor Allinson, Director - Equity Research at Wolfe Research LLC]

Thank you for all the color and good luck moving forward.

[Operator]

Thank you. Your next question is coming from Raffi Jadrosich from Bank of America. Your line is live.

[Rafe Jadrosich, MD & Senior Equity Analyst - U.S. Homebuilders & Building Products at Bank of America]

Hi, good morning. It's Raffi. Thanks for taking my questions. I wanted to ask just when you compare the performance in the larger markets that you operate versus some of the smaller markets, maybe where you have more private competition. Is there a big difference and what are you seeing from the private smaller homebuilders?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

I would say that throughout this fiscal year, we've seen more consistent performance to budget or to planned absorptions from the markets that are smaller, where we operate mostly against the private builders with maybe a public or two in those markets. Those are that largely we have entered as well over the last several years and our teams are just starting to build out their teams and catch their stride and their communities and performing at a good level. I think as you look at the larger markets, there certainly is competition always has been, which we're happy to play in that space and operators doing well in those as well. But I think if you look at comparison to plan, we're seeing a little better performance this year in the markets, the secondary markets and markets where we have less public builder competition.

[Rafe Jadrosich, MD & Senior Equity Analyst - U.S. Homebuilders & Building Products at Bank of America]

Thank you. And then in terms of the land cost impact, I think the last couple of quarters, was some lot cost pressure from mix. In this quarter, was a tailwind. If we were to sort of normalize for that, what are you seeing for sort of underlying lot cost inflation? And just given some of the softness in the market more recently, like when would that sort of underlying trend, when is there an opportunity for that to come lower?

[Michael Murray, EVP & COO at D.R. Horton]

I think in the near term, we would expect to continue to see mid single digit inflation in our lot costs. I mean, it's kind of a flow of inventory that's going through there. So the homes we close over the next twelve months are pretty much on lots that are identified, costed and largely owned by us today. Going forward, we continue to see a little bit of softness or changes in the marketplace and that results in changes in land and development costs, expect to see relief from that inflation going forward, but that would be several quarters out before any of that inventory came into production and closings.

[Rafe Jadrosich, MD & Senior Equity Analyst - U.S. Homebuilders & Building Products at Bank of America]

Thank you, that's helpful.

[Operator]

Thank you. Your next question is coming from Michael Rehaut from JP Morgan. Morgan. Your line is live.

[Michael Rehaut, Executive Director at JP Morgan]

Great. Thanks for taking my questions. Appreciate it. First, I just wanted to circle back and make sure fully appreciated or understood the trends around incentives during the quarter and how they progress year to date and how you're thinking about them in the back in the next quarter or two. One of your competitors this morning talked about incentives now up each for the last two quarters 70 to 80 bps on average sequentially each of the last two quarters.

[Michael Rehaut, Executive Director at JP Morgan]

I was wondering if you're seeing any type of similar trend at least on average. I know obviously market by market it varies a lot. And if you would expect incentives to continue to rise over the next quarter or two?

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Mike, I don't think we've quantified our incentives other than talking about them in a high single digit percentage range. I mean, obviously, if it's netting against revenue or it's in cost of sales, it all falls out in gross margin, which is why you hear us continue to focus on that forward looking data point. And we did, as we said, start to incentivize more heavily here over the last couple of weeks to drive what we're trying to achieve for the full fiscal year. And so we do expect at the midpoint a 50 basis point decline in our gross margin from Q3 to Q4.

[Michael Rehaut, Executive Director at JP Morgan]

Okay. No, I appreciate that. And I guess secondly, that maybe is offsetting that rise in incentives that you saw this past quarter going into next quarter? Obviously, this quarter still came in above a little bit above your guidance. Next quarter down 50 bps is not anything too material relative to perhaps some more bearish concerns out there.

[Michael Rehaut, Executive Director at JP Morgan]

So anything on the tailwind side that you can kind of put your finger on that's offset some of those headwinds, be it costs or even tariffs or other areas of the construction cost basket?

[Bill Wheat, EVP & CFO at D.R. Horton]

We have seen slight improvement in our stick and brick costs. And so that is a partial offset. You know, but our commentary really over the last year has been that incentives have been increasing. That's been the main driver for the gross margin decline over the last year. Our operators are striving every day to strike the best balance between hitting pace and maintaining margin in each community to maximize returns, and so they're using all the levers they have with incentives to try to balance that, and so we have seen the pace of incentive cost increases and the pace of margin decline moderate a bit over the last couple of quarters.

[Bill Wheat, EVP & CFO at D.R. Horton]

And then this quarter it held still flat sequentially, but the trend is still pointing towards a bit higher incentives and we don't see significant offsets to that though we will continue to work on work on costs on the construction side.

[Michael Rehaut, Executive Director at JP Morgan]

Great, thanks so much.

[Operator]

Thank you. Your next question is coming from Mike Dahl from RBC. Your line is live.

[Mike Dahl, MD, Equity Research - Homebuilders & Building Products Analyst at RBC Capital Markets]

Hi. Thanks for taking my questions. So if we think stick with the cost side of the equation, I mean, we may or may not be in a position to kind of refine views on tariff duties, all that fun stuff.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Mike, did we leave you?

[Mike Dahl, MD, Equity Research - Homebuilders & Building Products Analyst at RBC Capital Markets]

Sorry, can you hear me?

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Yes. We cut out after fun stuff.

[Mike Dahl, MD, Equity Research - Homebuilders & Building Products Analyst at RBC Capital Markets]

All the fun stuff around tariffs and potential labor dynamics, you guys given your position in the market and your breadth have a good holistic view of things like that. Can you just give us your sense of, as we've kind of refined as all the headlines come out, obviously this wouldn't impact your fiscal twenty twenty five, but when you think about costs for construction next year on sticks and bricks and then availability of labor, how are you thinking about things?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Mike, we work on our costs every day and that has been consistent and certainly is going on today in our divisions. From labor availability, it's plentiful. We have the labor that we need. Our trades are looking for work and that's why you've seen sequential and year over year reduction in our cycle time because we have the support we need to get our homes built and given those efficiencies, we do expect to continue to see reductions in stick and brick over time. Some of that is from design and efficiency of the product that we're putting in the field.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

And some of that is just from the efficiency of our operations and from the competitiveness from the labor basis out there today.

[Mike Dahl, MD, Equity Research - Homebuilders & Building Products Analyst at RBC Capital Markets]

And then shifting gears, you had a healthy result in terms of kind of the step up in rentals, both revenue and profitability. It's still pretty dynamic market out there. Can you just help us understand some of those moving pieces together in 3Q, how you're thinking about the next couple of quarters given the backlog that you've got on the rental side?

[Bill Wheat, EVP & CFO at D.R. Horton]

Yes, we have the backlog of identified properties that are in line to sell. We did see a bit of a step up there in the revenue there this quarter, a little bit better margin on those. That market is still experiencing a lot of transition in the higher rate environment and cap rates that have changed over the last few years. And so we're working on each one of those projects, working them closer to sale and that is one element of our margin guide as we look to Q4. We would expect while revenues may still be in the same ballpark or better than where it was this quarter, we do expect margins on the sales in Q4 to be lower in the rental segment than they were in Q3.

[Mike Dahl, MD, Equity Research - Homebuilders & Building Products Analyst at RBC Capital Markets]

Got it. Okay. Thank you.

[Operator]

Thank you. Your next question is coming from Alex Rydiel from Texas Capital Securities. Your line is live.

[Alex Rygiel, MD, Head - Equity Research at Texas Capital Securities]

Thank you. Geographically, can you comment on demand trends and highlight the outliers?

[Michael Murray, EVP & COO at D.R. Horton]

We typically don't go into a whole lot of geographic discussion. It's kind of a roll up of everything we're doing and we see some of the same national trends I would say you see with others and in the resale markets. There's been a lot of a change in the dynamic in the Florida markets and perhaps most so there. Other markets continue to be consistent performers where there's been limited inventory and limited development of lots and housing production continue to see strong demand in those markets.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Our supplemental data presentation will include our sales and active selling community detail again that gets posted after the call. So you'll see on a sequential basis, there's really no outliers outside of the Northwest sales, more of a little bit lagging. And I think we attribute some of that just to the tech buyer and what's going on with potentially uncertainty of the job market and whatnot in the Pacific Northwest. But otherwise, we saw a decent increase, at least on a sequential unusual seasonal basis in our sales, which was a positive.

[Alex Rygiel, MD, Head - Equity Research at Texas Capital Securities]

And real quick, could you talk a bit about your low cancellation rate, what it's telling you about the economy, consumer confidence and buyer credit quality?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

You know, at the rate that we're seeing, which is kind of below our historical average is that the buyers that are out there and our FICO score at what a seven twenty. Even with the transition to FHA rate, think some of that transition is people taking advantage of the lower rates that we can offer with a rate buy down. People are having to work to get there. And as we introduce smaller product and continue to try and reduce our ASP to expand into that buyer base, we certainly have to go through the process of working through credit, but our teams do a very good job of that and our mortgage company does exceptional job of working with those buyers to get them in a position to close on their home.

[Michael Murray, EVP & COO at D.R. Horton]

During the quarter over 12,000 of our customers were first time home buyers and so they people that have worked very hard to get on the home ownership ladder and we're very proud of this company that we're able to make that happen for so many families quarter after quarter after quarter.

[Alex Rygiel, MD, Head - Equity Research at Texas Capital Securities]

Thank you.

[Operator]

Thank you. Your next question is coming from Alex Barron from Housing Research Center. Your line is live.

[Alex Barron, President & Founder at Housing Research Center, LLC]

Yes. Good morning. I'm sorry if I missed if you've mentioned the the build time, but can can you repeat that? And is there any particular initiatives to try to lower that, you know, such as, you know, more more in house labor or or manufacturing, you know, trusses or any of that kind of stuff?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

None of that as far as integrating for us. We have the labor base that we need and a very strong trade base that's very supportive of us, so we don't feel the need to internalize any of that and take on that additional challenge and risk at this time. We've seen sequential reduction in that cycle time over a couple of days, and then two weeks over last year, we're sitting right where we want to be three months, which is below our historical norms. I would not expect to see a significant decline over the next twelve months, but teams are very focused on maintaining that and gaining advantage where they can on cycle time.

[Alex Barron, President & Founder at Housing Research Center, LLC]

Got it. What about efforts to drive, you know, greater affordability such as smaller lot sizes or smaller floor plans? Any initiatives on that front?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

I both of those, Alex. You can look at our average square footage and it's declined consistently over really the last twenty four months. I would expect that to continue some. And the key to affordability in this country is to provide a smaller home site with a smaller home that meets the ability of our buyers to close on our home and meets a monthly payment that fits what they're looking for. We just need a little extra help from local governments to allow us to achieve that really across The US, but that's an opportunity that we continue to explore every day.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Our average square footage on homes closed was nineteen fifty six which was down 1% from a year ago, which has been just a very gradual decline. But we're down in the last five years, a high single digit percentage on our average square footage. So we expect that just gradual trend of the average shrinking to continue.

[Alex Barron, President & Founder at Housing Research Center, LLC]

Okay. Great. Good luck for the rest of the year. Thank you.

[Operator]

Thank you. Your next question is coming from Jade Rahmani from KBW. Your line is live.

[Jade Rahmani, Managing Director at Keefe, Bruyette & Woods (KBW)]

Thank you very much. Can you discuss what you're seeing in the market in terms of home prices across the board? If you could quantify any range of price decline you're seeing and also what you might expect going forward?

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

We focus predominantly on incentives where we can and that's allowed us to maintain a lot of our base pricing across the country. That doesn't mean you won't find places where on select houses and select communities we are making actual base price reductions. That's generally much more targeted though in terms of uncompleted aged inventory.

[Jade Rahmani, Managing Director at Keefe, Bruyette & Woods (KBW)]

And are you seeing competitors with your product, primarily new home builders but also in the existing home market cut price?

[Michael Murray, EVP & COO at D.R. Horton]

I think competitive pressures across the board in any given submarket we're seeing some competitors cut price or resale cutting price and our local operators respond to every one of those dynamics on a weekly basis. And we're still seeing sales spaces in line with the targeted goals for those communities at the right margins to drive the returns we're looking for. So it's gonna be a competitive thing we deal with neighborhood by neighborhood and trusting our local operators to meet their market week to week to week.

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

And we do generally see though by and large builders are much more rational today. You can look at another competitor's results this morning and I think most builders today are taking a very balanced approach as it relates to pace and price and not just slashing prices across the board. So we're happy to see the rational approach that the industry is taking today.

[Jade Rahmani, Managing Director at Keefe, Bruyette & Woods (KBW)]

Thanks very much.

[Operator]

Thank you. Your next question is coming from Jay McCanless from Wedbush. Your line is live.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Hey, good morning, everyone. Thanks for taking my questions. And apologies, missed this. But did you all happen to comment on the Canadian software lumber agreement, what gross margin impact that might have on Horton?

[Michael Murray, EVP & COO at D.R. Horton]

No, we haven't commented on it and it will have some potential impact but we've not quantified that. I know it is a significant step up in the tariff rates that think go into effect next month. But we're buying some percentage of that wood and there's some substitutionary product that would be available as well based upon where that pricing ultimately settles.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Okay, and then the second question and I'm sure you guys addressed this earlier, but to hold the gross margin like y'all did to have the speed, I think that's very impressive, especially given some of the incentives that your competitors are putting out there. Guess, is there anything from a geographic or or a product standpoint that you haven't called out already in this call that you might want to address just to give people a sense of how you might be able to hold that gross margin into the fourth quarter?

[Paul Romanowski, President, CEO & Director at D.R. Horton]

No, I think Jay that the performance this quarter is a credit to our teams out in the field, managing week to week their flow on buyers and sales and traffic that they need to achieve their goals for the quarter. And we were able to outperform, which honestly was a surprise to us relative to our guidance. But we do expect to see a step down in margins as to our guide of 50 basis points as you look into this quarter. We'll be happy to be pleasantly surprised if that occurs again this quarter, but it's very early in the quarter to be able to tell where that's going to land. 54% of the homes that we closed this quarter were sold in the quarter.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

So we still got a long way to go in this quarter to see how the margin plays out by quarter end.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Great. And then the last one I had, did you all give any color about fiscal twenty six community growth or how you expect that to trend?

[Jessica Hansen, SVP - Communications and People & Head - IR at D.R. Horton]

Yes. Paul mentioned that it should ultimately moderate. It's been a low double digit percentage on an annual basis or excuse me, a year over year basis for a while. And we would expect that to moderate to the high single digit and ultimately probably more like a mid single digit community count growth going forward.

[Jay McCanless, MD - Equity Research at Wedbush Securities]

Okay, great. That's all I had. Thank you.

[Operator]

Thank you. That concludes our Q and A session. I will now hand the conference back to Paul Romanowski for closing remarks. Please go ahead.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

Thank you, Matthew. We appreciate everyone's time on the call today and look forward to speaking with you again to share our fourth quarter results on Tuesday, October 28. Congratulations to the entire D. R. Horton family on producing a solid third quarter.

[Paul Romanowski, President, CEO & Director at D.R. Horton]

We are honored to represent you on this call and greatly appreciate all that you do.

[Operator]

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Participants

Executives

• Jessica Hansen, SVP - Communications and People & Head - IR
• Michael Murray, EVP & COO
• Bill Wheat, EVP & CFO

Analysts

• Paul Romanowski, President, CEO & Director at D.R. Horton
• Alan Ratner, Managing Director at Zelman Partners LLC
• John Lovallo, Homebuilders Analyst at UBS Group
• Stephen Kim, Senior MD at Evercore ISI
• Matthew Bouley, Senior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays
• Sam Reid, Analyst at Wells Fargo
• Eric Bosshard, Analyst, CEO & Co - Founder at Cleveland Research Company
• Trevor Allinson, Director - Equity Research at Wolfe Research LLC
• Rafe Jadrosich, MD & Senior Equity Analyst - U.S. Homebuilders & Building Products at Bank of America
• Michael Rehaut, Executive Director at JP Morgan
• Mike Dahl, MD, Equity Research - Homebuilders & Building Products Analyst at RBC Capital Markets
• Alex Rygiel, MD, Head - Equity Research at Texas Capital Securities
• Alex Barron, President & Founder at Housing Research Center, LLC
• Jade Rahmani, Managing Director at Keefe, Bruyette & Woods (KBW)
• Jay McCanless, MD - Equity Research at Wedbush Securities