David V. Auld
President And Chief Executive Officer at D.R. Horton
Thank you, Jessica, and good morning. I am pleased to also be joined on this call by Mike Murray and Paul Romanowski. our Executive Vice President and Co-Chief Operating Officers; and Bill Wheat, our Executive Vice President and Chief Financial Officer. The D.R. Horton team delivered a strong third quarter, highlighted by a 53% increase in earnings to $4.67 per diluted share. Our consolidated pretax income increased 54% to $2.2 billion on a 21% increase in revenues. And our consolidated pretax profit margin improved 540 basis points to 24.8%. Our homebuilding return on inventory for the trailing 12 months ended June 30 was 41.7%, and our consolidated return on equity for the same period was 35.1%. These results reflect our experienced teams, their production capabilities and our ability to leverage D.R. Horton's scale across our broad geographic footprint. Housing market demand remained strong during most of the quarter. In June, we began to see a moderation in demand and an increase in cancellations due to the rapid rise in mortgage rate and continued inflationary pressures across most of the economy.
The supply of both new and resale homes at affordable prices remains limited. Although demand has slowed from the frenzy pace we experienced over the past year, there are still qualified buyers in the market today as household formations continue and inflationary pressures drive rents higher. 54% of the homes we closed in the past 12 months were priced under $350,000, and our average sales price is approximately $100,000 lower than the average other homebuilders, positioning us to continue aggregating share. There are still disruptions in the supply chain and tightness in the labor market that continue to delay the completion of our homes under construction. These construction delays and changes in demand environment led us to reduce our full-year closing guidance for fiscal 2022.
We remain purposefully -- we purposely slowed our number of home starts in the third quarter to position our inventory to align with market conditions. Although the uncertainty of this market transition may persist for some time, we believe we are well positioned to meet changing market conditions with our experienced teams, affordable product offerings, flexible lot supply and their strong trade and supplier relationships. The strength of our balance sheet, liquidity and loan leverage provide a significant financial flexibility, and we will continue managing our product offerings, incentives, home pricing, sales pace and inventory levels to optimize returns.