D.R. Horton opens earnings season with flat orders as costs keep climbing

What the week's housing news means for people who sell to builders.

The week's data told one story from two directions. On the demand side, single-family permits fell to 871,000 — a 10-month low per Census — builder confidence slipped to 34, and purchase applications dropped 7% as mortgage rates hit their highest level since last August. On the cost side, NAHB's read of June PPI has residential building materials up 4.6% year over year, with a fresh round of insulation and steel-framing price letters queued for August. D.R. Horton's fiscal Q3, reported Tuesday morning, is what that squeeze looks like on a P&L: closings up, orders flat, incentives staying elevated into Q4. For anyone selling into builders, the order book is holding up better than the pricing conversation is about to.

June starts jumped 19% — but the single-family line was flat — Census reported total June starts of 1.427M SAAR, up 19.0% from May, with essentially all of the gain in multifamily; single-family starts came in at 895,000, down 0.2% from May, and single-family permits fell 2.4% to 871,000, the lowest in 10 months. (Census)

Builder confidence stuck at 34, and more builders are cutting prices — The NAHB/Wells Fargo HMI slipped 2 points to 34 in July per NAHB's July 16 release; buyer-traffic reading of 23, 37% of builders reporting price cuts (averaging 6%), and 63% using sales incentives. (NAHB)

Materials costs are still rising into that weakness — NAHB's analysis of June PPI data has residential building materials (ex-energy) up 0.5% for the month and 4.6% year over year, with softwood lumber up 7.0% and roofing asphalt products up 9.2% YoY; Madison's Lumber Prices Index held at US$548/mfbm for the week ending July 17, up about 3% over the past month. (NAHB Eye on Housing, Madison's Lumber Reporter)

Rates moved the wrong way for buyer traffic — Freddie Mac's 30-year fixed averaged 6.55% on July 16, up from 6.49%; MBA's survey put purchase applications down 7% for the week, with the average 30-year contract rate at 6.65% — the highest since August 2025, per MBA. (Freddie Mac, MBA)

Stanley Martin is buying Holiday Builders, one of Florida's largest privates — Daiwa House-owned Stanley Martin Homes announced July 16 it will acquire Melbourne-based Holiday Builders — roughly 1,050 closings in 2025, about 10,600 controlled lots, and 40-plus communities across nine Florida markets — with the deal expected to close in late July; terms weren't disclosed. (GlobeNewswire)

Taylor Morrison's exit from the public markets is days away — Ahead of the July 22 stockholder vote on Berkshire Hathaway's $72.50-per-share take-private (~$8.5B enterprise value), Taylor Morrison launched consent solicitations July 16 on three senior-note series to amend indentures in connection with the merger, with the consent deadline set for the same day as the vote. (PR Newswire)

Canadian lumber capacity is coming out while prices firm — Carrier Forest Products is indefinitely curtailing its Big River, Saskatchewan sawmill, affecting 117 employees, citing weak lumber markets and reduced timber supply from last year's wildfires, per reporting July 17. (BNN Bloomberg)

The ROAD to Housing Act is now law — implementation starts next month — The 21st Century ROAD to Housing Act became law July 11 and the first implementation deadlines are now visible: HUD's first statutory notice is due around August 10, comments on the manufactured-home chassis proposal close August 11, and the institutional-investor purchase ban (350+ homes, with build-to-rent carveouts) takes effect January 7, 2027. (HousingWire, Bipartisan Policy Center, Federal Register)

The live pattern is in the insulation and framing package: a cluster of August-effective letters is stacking up, led by a verified polyiso move, with several steel-framing manufacturers announcing increases for early August without disclosed amounts.

Also announced increases without a disclosed amount: AMICO (steel building products, eff. Aug 1), Phillips Manufacturing (steel framing products, eff. Aug 17), Owens Corning (insulation transportation surcharge, eff. Aug 3). Knauf postponed its previously announced residential insulation increase to September 1.

ACHR News publishes a full monthly HVAC price-increase roundup — link in Sources.

D.R. Horton opened builder earnings season Tuesday morning with a quarter that beat expectations and still described a harder market. Per the company's fiscal Q3 release, closings rose 4% year over year to 23,983 homes and revenue came in at $9.2B, but net income fell 12% to $904.9M, home-sales gross margin landed at 20.7%, and net sales orders were flat year over year at 23,084 homes. The cancellation rate ticked up to 20% from 17% a year ago, and management said it expects incentives to remain elevated through the fourth quarter — the rate-buydown era is not winding down. Full-year guidance calls for 83,800–84,300 closings on $32.5–33.0B in revenue.

Two operational lines matter more to suppliers than the EPS beat. First, the backlog: 15,983 homes worth $6.18B, up 13.6% and 15.7% year over year respectively — homes already sold that need product over the next several months, which is near-term volume support for every category in the house. Second, the inventory and land posture: 38,000 homes in inventory, roughly 23,300 of them unsold, while the total lot position shrank by about 23,400 lots since September to 568,500, with the owned share cut to 22%. A builder carrying that much spec while trimming its land pipeline is likely managing for cash and pace, not expansion. Forestar, Horton's majority-owned land developer, reported the same morning: 3,659 lots delivered, up 1.5% year over year, with revenue of $407M falling short of analyst expectations — the land pipeline is still moving, but not accelerating. (Forestar Q3 FY2026 results via StockStory)

The read-through: the nation's largest builder is defending volume with incentives and protecting returns with land discipline, and the rest of the group reports into the same backdrop — PulteGroup, NVR, Century Communities, and Taylor Morrison are all expected Wednesday. If their commentary echoes Horton's — flat orders, elevated incentives, cautious land spend — the supply-side planning assumption for H2 is steady-but-not-growing single-family volume, with builders increasingly focused on cost per house. That tends to show up for suppliers as value-engineering conversations and spec reviews before it shows up as volume loss. (D.R. Horton Q3 FY2026 release)

Wednesday, July 22 is the heaviest day of the season so far — the Taylor Morrison shareholder vote plus expected Q2 results from PulteGroup, NVR, Century Communities, and Taylor Morrison itself — followed by June new home sales Friday, the FOMC meeting July 28–29, PCBC in San Diego July 28–30 alongside SEBC in Orlando July 29–30, and the building-products earnings wave (Sherwin-Williams, PPG, Carrier, Watsco, Lennox, Masco, Trane, Builders FirstSource, Mohawk) July 28–31.

That's the week, measured. If someone forwarded you this, get it in your inbox every Tuesday — hit the button below to subscribe.

Compiled from publicly available reporting as of July 21, 2026. Figures are as reported by the cited sources and subject to revision. Starts & Specs is provided for general informational purposes only. Nothing in it is financial, investment, legal, or business advice, or a recommendation to take or refrain from any action; any analysis reflects the author's reading of public information and may be wrong. Readers should independently verify figures and make their own decisions.