Lawler: D.R. Horton (DHI) Net Order Price Declined "Roughly" 10% from Peak

Chart of the Week: Single Family Rents vs. Wage and Salary Income

From housing economist Tom Lawler:

DHI’s average net order price last quarter was actually DOWN 4.1% from the comparable quarter of 2021, and was down 7.9% from the previous quarter.  While some of this decline may have been related to the mix of sales, it’s worth noting that the average net order price was down YOY in all but one of the regions DHI reports on (the “East” saw no change, while the Southwest saw a 10% drop).  In addition, the company on the conference call seemed to suggest that most of the recent price declines have reflected decreased prices and/or increased concessions (see below).  It is also interesting to note that the sales price on cancelled orders was significantly higher than the net order price, in marked contrast to a year ago.

Here is an excerpt from the conference call.

Q. You know, I wanted to also focus, though, on pricing trends in the market. And, you know, if you can kind of give us a sense of, you know, on a total basis, you know, how much net pricing, you know, has come down from, you know, June of last year to today and, you know, how much of that has occurred in the last month or two?

Bill Wheat -- Executive Vice President and Chief Financial Officer: Well, you know, in terms of just pricing, really, our net sales orders in the quarter and the average sales price on that is the best indication. Our net sales order price this quarter is around 367,000, I believe. And of course, we peaked last year, a little over 400,000. So, you're already looking at, you know, roughly a 10% decline in our net sales orders (price).

emphasis added

Also from Tom Lawler:

Chart of the Week: Single Family Rents vs. Wage and Salary Income

Below is a chart showing the CoreLogic Single-Family Rent Index compared to the median usual weekly earnings of full-time wage and salary workers 25 years and older.  Both values are index numbers with Q1/2004 = 100.  The Q4 number for the CoreLogic SFRI is [Lawler’s] estimate.