DR Horton shares plunge after the homebuilder says rising prices are weighing on housing demand

D.R. Horton, the largest U.S. homebuilder, said on Thursday rising home prices and higher mortgage rates were weighing on demand, particularly for expensive homes.

Mortgage rates are hovering over 5 percent for the first time in several years, raising concerns about a slowdown in the housing industry, even as the broader U.S. economy expands at a robust pace.

However, Chairman Donald Horton said in a statement that supply constraints continued to support demand across the company’s markets.

U.S. homebuilders have not been able to meet the rising demand as they have been held back by scarce labor, limited lot supplies and rising raw material costs.

Revenue rose 8.3 percent to $4.51 billion, but slightly missed estimate of $4.57 billion.

The company’s net income rose 48.8 percent to $466.1 million, or $1.22 per share, in the fourth quarter ended Sept. 30, in line with analysts’ expectation, according to IBES data from Refinitiv.

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