Latest news with #PaulRomanowski
Epoch Times
30-04-2025
- Business
- Epoch Times
Homebuilders Court First-Time Buyers With Innovative Financing as Costs Rise
Prospective first-time and Gen-Z homebuyers are increasingly nervous about the economic landscape, seeing high interest rates and home prices in many urban markets topping the $1 million mark. During recent conference calls with Wall Street analysts, top executives for D.R. Horton and PulteGroup said the industry is increasingly collaborating with mortgage companies and local banks to develop innovative financing solutions and incentives to get first-time buyers off the sidelines. At D.R. Horton, CEO Paul Romanowski said 55–56 percent of new home deliveries from the nation's largest homebuilder have been to first-time buyers. Meanwhile, 70 percent of deliveries were at $400,000 or less, 'which for us is maintaining a focus on affordability and a payment that works for people in their monthly budget.' 'I think we have made adjustments as the market has shifted over the last 12–18 months and feel comfortable with our trajectory and the product offering that we have,' Romanowski said. The Dallas-based homebuilder In Atlanta, PulteGroup has also developed and implemented various tools to assist first-time homebuyers navigating their personal homeownership challenges. With growing concerns about the potential for a slowing economy, PulteGroup is offering new product designs, more efficient floor plans, and meaningful financial incentives that move the needle. Related Stories 4/25/2025 4/24/2025 Such offerings include new financing vehicles such as forward commitments, where PulteGroup's local builders can offer a below-market interest rate on a 30-year mortgage for qualified homebuyers. 'We leaned into incentives a little more heavily in the first quarter as we executed on our plan to reduce excess spec inventory,' said CEO Ryan Marshall, noting that the Atlanta-based homebuilder ended the first quarter with 16,548 new homes in According to Houston banker Mike Iorio, interest-rate buy-down programs and forward commitments allow homebuilders to partner with banks or mortgage companies and commit to purchasing a pool of loan funds at a reduced rate over a specific period. This enables builders to lock in an interest rate for future home closings and offer buyers below-market rates without lowering the sale price, he said. At Cornerstone, Iorio was recently appointed senior vice president of strategic partnerships to spearhead the expansion of the company's homebuilder program nationwide. He said the fast-growing Texas community bank has seen the number of forward commitments double in 2024 to more than $2.4 billion as interest rates for a 30-year mortgage have climbed to nearly 7 percent nationally. 'It's not free, and it's not cheap,' said Iorio. 'But what it does is it allows (builders) to advertise in their communities, and they can do it either on a specific home or they can do it for an entire community.' In northeast Arkansas, one of the most unique homebuying programs in the country is the 'Work Here. Live Here.' (WHLH) Once one of the nation's poorest counties with one of the highest U.S. jobless rates at 16 percent during the Great Recession, the Delta region is now anchored by major steel producers that have reshaped the local economy, provided thousands of high-paying jobs, and attracted billions in capital investment. For example, Pittsburgh-based steel conglomerate U.S. Steel is on track to start up full production at its $3 billion, 6.3 million-ton 'Big River 2' mega mill on the Mississippi River in the second half of this year. Nucor Steel, the nation's largest steel producer, also operates a 1,000-employee specialty cold mill and another 800-employee joint venture manufacturing facility with Japan's Yamato Steel in the county. Randy Scott, CEO of Farmer's Trust Bank, said the community began brainstorming over a decade ago on ways the county could tackle the region's persistently high unemployment and negative population growth. As the steel industry drew workers around for entry-level jobs up to $100,000 annually, WHLH was founded to address the need for more and better housing. 'We had people driving to work every day from as far as the foothills of Missouri and from several other states just so they could get a job at one of the mills,' Scott told the Epoch Times, adding the nonprofit foundation celebrated its 100th new home in 2024. Funded by the participating employers, the program offers employees up to $50,000 toward the cost of a new home and up to $25,000 toward an existing home. Since its inception, WHLH initiative has generated $37.4 million in new home value and facilitated 146 home purchases. 'And our unemployment rate is now down to 4 percent,' Scott said. Nationally, mortgage lender Michael Brennan and real estate professional Jennifer Beeston, the executive vice president of in Coral Springs, Florida, agreed that education is the most crucial asset for first-time homebuyers, especially millennials and Gen Z homebuyers. According to a recent Zillow As president of Melville, New York-based Nationwide Mortgage Bankers (NMB), Brennan oversees sales and operations for the 500-employee company licensed in 47 states. He told The Epoch Times that affordability is the biggest challenge for buyers entering a volatile housing market. 'The most important thing anyone can offer is education,' he said, noting new programs such as 40-year mortgages are being introduced every day to lure reluctant buyers into the market. Beeston, who runs a YouTube In the current market, Beeston noted the disparity in housing prices across the United States, with affordable markets such as Texas and Arkansas contrasting with high-end cities like Miami Beach, emphasizing the role of down payment assistance programs and the impact of inventory on affordability. 'It doesn't matter how creative I get about financing. You can't buy a million-dollar house with a $60,000 a year salary,' she told The Epoch Times. 'So those are bigger issues that need to be resolved. Thankfully, the bulk of America is not that dark.'
Yahoo
18-04-2025
- Business
- Yahoo
D.R. Horton Inc (DHI) Q2 2025 Earnings Call Highlights: Navigating Market Challenges with ...
Earnings per Share (EPS): $2.58 per diluted share. Net Income: $810 million. Revenue: $7.7 billion. Pre-tax Profit Margin: 13.8%. Home Sales Revenue: $7.2 billion on 19,276 homes closed. Average Closing Price: $372,500, down 1% year over year. Net Sales Orders: Decreased 15% to 22,437 homes. Order Value: Decreased 17% to $8.4 billion. Gross Profit Margin on Home Sales: 21.8%. SG&A Expenses: Increased by 4%, representing 8.9% of revenues. Homes in Inventory: 36,900 homes, with 23,500 unsold. Rental Operations Revenue: $237 million with $23 million pretax income. Forestar Revenue: $351 million on 3,411 lots sold. Financial Services Revenue: $213 million with $73 million pretax income. Cash and Liquidity: $5.8 billion in consolidated liquidity. Debt: $6.5 billion with a leverage of 21.1%. Stock Repurchases: 9.7 million shares for $1.3 billion. Dividend: $0.40 per share, totaling $126 million. Release Date: April 17, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. D.R. Horton Inc (NYSE:DHI) reported solid earnings of $2.58 per diluted share for the second quarter of fiscal 2025. The company achieved a pre-tax profit margin of 13.8% on $7.7 billion of revenues, demonstrating strong financial performance. D.R. Horton Inc (NYSE:DHI) maintained a low cancellation rate of 16%, indicating strong buyer commitment despite economic uncertainty. The company has a robust balance sheet with $5.8 billion of consolidated liquidity, providing significant financial flexibility. D.R. Horton Inc (NYSE:DHI) increased its share repurchase authorization to $5 billion, reflecting confidence in its financial position and commitment to returning capital to shareholders. Net sales orders and home building revenues decreased by 15% in the second quarter, reflecting challenges in the housing market. The average closing price for homes decreased by 1% both sequentially and year over year, indicating pricing pressures. Homebuilding SG&A expenses increased by 4% from the previous year, impacting overall profitability. The gross profit margin on home sales revenues decreased by 90 basis points sequentially due to higher incentive costs. D.R. Horton Inc (NYSE:DHI) expects incentive costs to increase further, potentially impacting future profit margins. Q: Can you discuss the shift in D.R. Horton's management approach, particularly regarding volume and share repurchases? A: Paul Romanowski, President and CEO, explained that the company is focusing on a return-based business model, balancing pace and price to drive returns and consistent operating cash flows. The emphasis is on maintaining significant scale while maximizing shareholder returns through share repurchases and dividends. Q: How is D.R. Horton managing its SG&A expenses given the recent increase? A: Bill Wheat, CFO, noted that while keeping a low-cost operating model is still crucial, recent investments have expanded the company's footprint and market count. These investments are seen as necessary for long-term market share aggregation, despite current market conditions not providing the expected growth rate. Q: What is the outlook for D.R. Horton's gross margin in the third quarter, and how do incentives play into this? A: Michael Murray, COO, stated that if incentives remain flat, the company could achieve the higher end of its gross margin target of 21% to 21.5%. However, market volatility, particularly in mortgage rates, makes precise predictions challenging. Q: How is D.R. Horton handling potential tariff impacts on costs, particularly with suppliers? A: Paul Romanowski mentioned that while there is significant noise around tariffs, the company feels well-positioned due to its strong supplier relationships and market scale. They expect to manage costs effectively and minimize tariff impacts. Q: What is D.R. Horton's strategy regarding community count and starts, especially in light of potential market softness? A: Jessica Hansen, SVP, explained that community count adjustments will depend on local market conditions and sales pace. The company is focused on maintaining flexibility in its lot position and will adjust community starts based on demand. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Reuters
17-04-2025
- Business
- Reuters
D.R. Horton cuts 2025 revenue forecast on weak demand for homes
April 17 (Reuters) - U.S. homebuilder D.R. Horton (DHI.N), opens new tab lowered its full-year revenue forecast and missed second-quarter profit and revenue estimates on Thursday due to weak demand for homes. Shares of the company fell 3.2% before the bell. "The 2025 spring selling season started slower than expected as potential homebuyers have been more cautious due to continued affordability constraints and declining consumer confidence," said D.R. Horton CEO Paul Romanowski. Rising economic uncertainty in the U.S., resulting from President Donald Trump's tariff policies, could further pressure homebuilders as consumer affordability is impacted amid a high interest-rate environment. In January, the homebuilder flagged higher costs from its buydown incentives and lower home sales gross margin in the second quarter on a sequential basis. It now expects full-year revenue to be between $33.3 billion and $34.8 billion, compared with its earlier forecast of $36 billion to $37.5 billion. It sees about 85,000 to 87,000 transaction closings from homebuilding operations, down from its earlier forecast of 90,000 to 92,000 homes. The Arlington, Texas-based company's second-quarter revenue fell 15% from a year ago to $7.73 billion, compared with analysts' estimate of $8.03 billion, according to data compiled by LSEG. On an adjusted basis, it earned $2.58 per share in the quarter ended March 31, compared with analysts' average estimate of $2.63 a share.
Yahoo
17-04-2025
- Business
- Yahoo
D.R. Horton cuts 2025 revenue forecast on weak demand for homes
(Reuters) - U.S. homebuilder D.R. Horton lowered its full-year revenue forecast and missed second-quarter profit and revenue estimates on Thursday due to weak demand for homes. Shares of the company fell 3.2% before the bell. "The 2025 spring selling season started slower than expected as potential homebuyers have been more cautious due to continued affordability constraints and declining consumer confidence," said D.R. Horton CEO Paul Romanowski. Rising economic uncertainty in the U.S., resulting from President Donald Trump's tariff policies, could further pressure homebuilders as consumer affordability is impacted amid a high interest-rate environment. In January, the homebuilder flagged higher costs from its buydown incentives and lower home sales gross margin in the second quarter on a sequential basis. It now expects full-year revenue to be between $33.3 billion and $34.8 billion, compared with its earlier forecast of $36 billion to $37.5 billion. It sees about 85,000 to 87,000 transaction closings from homebuilding operations, down from its earlier forecast of 90,000 to 92,000 homes. The Arlington, Texas-based company's second-quarter revenue fell 15% from a year ago to $7.73 billion, compared with analysts' estimate of $8.03 billion, according to data compiled by LSEG. On an adjusted basis, it earned $2.58 per share in the quarter ended March 31, compared with analysts' average estimate of $2.63 a share. Sign in to access your portfolio
