D.R. Horton raises annual revenue forecast on tight housing supply

(Reuters) -U.S. homebuilder D.R. Horton Inc raised its forecast for full-year revenue on Thursday, as tight housing supply in the United States boost sales.

The largest U.S. homebuilder now expects full-year revenue in the range of $36.7 billion to $37.7 billion, compared with its prior forecast of $36.0 billion to $37.3 billion.

With the popular 30-year fixed mortgage rate hovering at about 7% for months, U.S. homeowners who secured fixed rates below 5% during an era of cheap debt remain unwilling to list their homes and upgrade amid high rates.

The ‘rate lock-in’ that such homeowners are enjoying has constrained sales of existing homes in the United States and forced buyers to turn to newly constructed homes.

It has been a tailwind for homebuilders, even at a time when high home prices have limited affordability.

The Texas, Arlington-based homebuilder now expects full-year home deliveries in the range of 89,000 homes to 91,000 homes, above its prior forecast of 87,000 homes to 90,000 homes.

Net income for the largest U.S. homebuilder in the second quarter ended March rose to $1.2 billion, or $3.52 per share from $942.2 million, or $2.73 per share, a year earlier. It also came in above analysts’ average estimate of $1.02 billion, or $3.06 per share.

Shares of the company rose 2.27% in pre-market trading.

(Reporting by Ananta Agarwal in Bengaluru; Editing by Shinjini Ganguli)