#3 - D.R. Horton (NYSE:DHI)
D.R. Horton (DHI) There are growing questions as to whether D.R. Horton (NYSE:DHI) and other companies in the homebuilding sector will be able to make the smooth recovery that many experts were initially forecasting. The good news is that the Federal Reserve has taken interest rates down to their great recession levels. This was going to be a catalyst that would move DHI stock higher.
Many homebuyers did not bite when the Federal Reserve began to lower interest rates in July 2019. However, as rates continued to plunge for the rest of the year, many renters decided it was time.
D.R. Horton had a healthy inventory of over 30,000 homes as fiscal 2020 began. And new sales orders were up 19% on a year-over-year basis. However the mitigation efforts that are happening throughout the country have slowed the process.
Hopefully the borrowers have already had their new constructions approved, because it’s about to get tougher to buy a home. One of the nation’s leading banks, J.P. Morgan Chase (JPM) has announced it will be tightening its lending standards. In addition to requiring that prospective borrowers have a credit score over 700, they will be asking for at least 20% of the home’s purchase price as a down payment. That will be beyond the ability for many homeowners which may have the effect of working at counter purposes with the lower interest rates.
About D.R. Horton
D.R. Horton, Inc 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.
Read More - Current Price
- $146.84
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 12 Buy Ratings, 4 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $158.41 (7.9% Upside)
