Home Deliveries Rose in Most of D.R. Horton’s Regions in 2014



Rising home deliveries

D.R. Horton (DHI) delivered 28,670 homes in fiscal 2014 at an average sales price of $272,200 compared to 24,155 deliveries in 2013 at an average price of $249,400. The number of homes closed in fiscal 2014 increased 19% over 2013 due to increases in four out of six regions.

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Acquisitions boost home deliveries

The most significant percentage increase occurred in the East region, reflecting the positive impact of acquisitions of the homebuilding operations of Regent Homes and Crown Communities, which contributed 676 closings to the East region in 2014.

Crown Communities contributed 508 closings to the Southeast region in 2014. Excluding the impact of Crown Communities, the increase in homes closed in the Southeast region was primarily due to increases in the Jacksonville and Atlanta markets. In the South Central region, the highest percentage increases in homes closed occurred in the Fort Worth, Dallas, and Houston markets. The increase in the West region was primarily due to increases in the Bay Area, Portland, and Sacramento markets.

The Southwest and the Midwest are the laggards

The Southwest region, which witnessed a sharp decline of 16% in fiscal 2014 to 1,348 homes, was primarily due to weak demand in the Phoenix market. The decrease in home closings by 16% over 2013 to 1,605 in the Southwest region was primarily due to weak demand in the Phoenix market, as population and job growth faltered during that period. The decline of 7% in the Midwest region to 1,342 homes was attributable to sluggish demand in the Colorado and Chicago markets.

In view of the positive effect of acquisitions on home deliveries, as mentioned above, D.R. Horton (DHI) is likely to look for more targets in the days ahead. D.R. Horton is more geographically diversified compared to its major competitors like Lennar (LEN), Pulte Group (PHM), KB Homes (KBH), and Standard Pacific (SPF).

Investors who are interested in trading the sector as a whole should look at the SPDR S&P Homebuilders ETF (XHB).


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