(Reuters) - D.R. Horton DHI.N on Tuesday reported a better-than-expected quarterly profit and forecast current quarter revenue above estimates, as record-low mortgage rates and a shift towards suburban living caused by the coronavirus crisis boosted sales.
Shares of the no.1 U.S. homebuilder rose as much as 5.6% to a record $70.29, buoyed by the results and the U.S. housing sector’s swift recovery from the initial round of lockdowns that idled much of the economy earlier this year.
New home sales raced near a 13-year high last month, underpinned by borrowing costs at their lowest in almost half a century, with 30-year fixed mortgage rates averaging just above 3%.
Work from home and home schooling have fueled demand for spacious homes in less densely populated areas, boosting home sales further for U.S. builders.
D.R. Horton said it was seeing strong demand from the millennial, who have delayed forming households in comparison with the prior generations.
“It is a very, very, good market right now,” Chief Executive Officer David Auld said. “There’s just a whole lot of people out there that I think are going to be looking for housing over the next five-plus years.”Analysts see the company particularly well placed among U.S homebuilders due to it high share of affordable entry-level homes popular among first-time buyers.
The company, which withdrew it full-year outlook in April, said it expected to deliver between 18,000 and 19,000 homes in the fourth quarter, above analysts’ expectation of 15,469 deliveries, according to IBES data from Refinitiv.
D.R. Horton said orders, an indicator of future sales, jumped 38% to 21,519 homes in the third quarter ended June 30, beating Wall Street’s estimate of 14,853 units.
Its home sales rose 10.5% to 17,642 homes in the quarter, topping analysts’ expectation of 17,068 units.
Total revenue rose 10% to $5.39 billion, also beating estimates of $5.13 billion.
Reporting by Ankit Ajmera in Bengaluru; Editing by Tomasz Janowski
Our Standards: The Thomson Reuters Trust Principles.