A Jarring Wake-Up Call

Have we been had by the homebuilders? I want to say "no." I want to portray them merely as an over-optimistic lot. But if you've gone over the D.R. Horton (DHI) conference call, you have to be in shock about the endless denials the execs in this industry have issued about the sharp jump in rates. To put it simply, it pretty much stopped housing sales in their tracks, at least for Horton.

I don't think people have noticed how hard this company has been hit unless they've read through the conference call minutia and heard morsels like this: "We experienced some moderation in our net sales pace in the back of the quarter after mortgage rates began to increase sharply," said William Wheat, the chief financial officer. He continued: "While each individual home buyer responds differently to changes in mortgage rates, we typically see some short-term moderation in buyer activity during periods of mortgage rate volatility as potential buyers adjust to the changing rate environment."...457 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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