One builder thinks cheaper homes work
NEW YORK – Feb. 2, 2016 – D.R. Horton CEO David Auld credited success with its entry-level home for boosting company revenue during a recent quarterly earnings call.
Auld said D.R. Horton's Express brand has ranked as the biggest driver of market share gains for the nation's largest homebuilder. Launched in 2014, Express began offering no-option, no-frills homes for prices between $120,000 and $150,000, although prices are now slightly higher due to broader market gains.
The brand now has a solid footing in Florida as well as Texas and the Carolinas.
Auld said he expects to see more competition on the low end, even though other builders have taken big bets on the high end.
D.R. Horton is "doing the best job of any of the large builders executing at entry level, and I think you have to have that as you go through 2016," homebuilding analyst Stephen East of Evercore ISI said on CNBC's "Squawk on the Street."
D.R. Horton has three brands: Express (low-end homes), Horton (mid-level homes) and Emerald (high-end homes).
"There is a slower movement on the Emerald," said Auld. "The higher price points are not seeing the same level of activity that we're seeing in the Horton or Express brands."
Source: CNBC.com (01/25/16) Olick, Diana© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688