2024-01-24 10:03:00 ET
Summary
- Homebuilder stocks tanked on Tuesday after D.R. Horton’s earnings call, with D.R. Horton’s stock down 9.2%.
- D.R. Horton — like other builders — is building smaller homes with less expensive amenities, and the average closing price has continued to drop in Q4.
- D.R. Horton said it had increased the use of the buydowns during the quarter, that 70% of its deals were made with mortgage rate buydowns, up from 60% in the prior quarter.
The plunge in mortgage rates in Nov and Dec blew up the hedge for the rate buydowns: surprise cost on top of the regular costs of buydowns. ...
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D.R. Horton Sheds Some Light On The Massive Costs Of Mortgage Rate Buydowns