When this Horton heard a Who, it built the little guy a house. D.R. Horton builds single-family homes for the entry-level and move-up markets. Homes range from 1,000 sq. ft. to 4,000 sq. ft. and sell for an average of about $212,000; luxury homes cost up to $700,000. One of the top US homebuilders, D.R. Horton is active in about 75 markets in 25 states. The company also provides mortgage, title, and closing services. Like its peers, D.R. Horton saw its sales plummet as a result of the housing market crash, the subprime mortgage crisis, the global credit crunch, and years of industrywide overbuilding. As a sign of the recovering economy, though, orders for the company's homes have begun to rebound.
In fiscal 2010 the company sold some 20,875 homes, up from 16,700 homes the previous year. A federal tax credit for first-time homebuyers, the company's target market, also led to a temporary boost in home orders that year. Conversely, demand for new homes declined after the tax credit expired that year. In fiscal 2011, even as home sales prices inched up 3% from the previous year's average of $206,100, the number of homes the company sold slipped back down to approximately 16,700. Sales declined across all geographic regions, with the exception of the south-central region (Louisiana, Texas, Oklahoma, and New Mexico). As a result, revenues from home sales, the bulk of the company's earnings, fell 18% to $3.5 billion and overall revenues fell 17% to $3.6 billion. Profits fell even further, slipping 71% to $71.8 million that year.
D.R. Horton has been readying itself for financial recovery by strategically buying land at distressed prices, seeking promising new markets to enter, and renegotiating purchasing contracts. As one of the largest homebuilders, the company has been able to survive the worst housing market in 25 years, unlike many smaller builders with limited resources that have gone out of business or been acquired in recent years.
In addition to single-family detached homes, which account for some 90% of sales, D.R. Horton builds duplexes, townhomes, and condominiums. The company operates through some 30 divisions which are somewhat autonomously led by presidents familiar with their geographic markets. The divisions report to one of four regional offices.
Founder and chairman Donald Horton owns 9% of D.R. Horton. – less