D.R. Horton reported lower-than-expected net sales orders for its fiscal first quarter, as homebuyer caution persists. The builder’s orders rose 3% to 18,300 homes, missing the Bloomberg consensus estimate of 18,653. Executive Chairman David Auld cited affordability constraints and cautious sentiment as headwinds to new home demand.

The results highlight ongoing pressure in the housing market from elevated mortgage rates and rising property costs. D.R. Horton signaled it will keep sales incentives elevated throughout fiscal 2026, a move that typically squeezes builder margins. The company’s pre-tax profit margin stood at 11.6%, slightly above expectations.

Despite the softer order growth, earnings per share of $2.03 beat projections, though they fell 22% from a year prior. The margin benefit came from a 40-basis point recovery of prior warranty costs. Investors now watch the spring selling season and mortgage rate trends to gauge demand strength.