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Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter. On Tuesday, D.R. HortonAmericas most valuable and largest homebuilder, with a $46 billion market capitalization and ranked No. 123 on the Fortune 500reported its third-quarter earnings for the three months ending June 30. While D.R. Hortons earnings didnt wow investors, the fact that there wasnt an accelerated softening beyond what homebuildersincluding D.R. Hortonhad already reported earlier this year was enough for some Wall Street investors to buy back into homebuilder stocks. For todays piece, were going to take a closer look at D.R. Hortons earnings and the commentary its executives provided during Tuesdays earnings call. Incentive spending is helping D.R. Hortons home sales hold steady D.R. Hortons net new orders, by its fiscal Q3 (the three months ending June 30th): Q3 2018 > 14,650 Q3 2019 > 15,588 Q3 2020 > 21,519 Q3 2021 > 17,952 Q3 2022 > 16,693 Q3 2023 > 22,879 Q3 2024 > 23,001 Q3 2025 > 23,071 D.R. Horton continues to see weakness in Florida While D.R. Hortons national net orders were pretty much flat year-over-year, there was a -10.1% year-over-year drop in its Southeast division. That division includes Floridawhich D.R. Horton once again acknowledged remains on the softer/weaker side. There’s been a lot of a change [weakening] in the dynamic in the Florida markets. And perhaps most so there. Other markets continue to be consistent performers where there’s been limited inventory and limited development of lots. And housing production continues to see strong demand in those markets, D.R. Horton chief operating officer Michael Murray said during their earnings call on July 22, 2025. North (13% of D.R. Hortons Q3 2025 net new orders): Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, and Wisconsin East (21%): Georgia, North Carolina, South Carolina, and Tennessee Northwest (6%): Colorado, Oregon, Utah, and Washington South Central (27%): Arkansas, Oklahoma, and Texas Southwest (10%): Arizona, California, Hawaii, Nevada, and New Mexico Southeast (24%): Alabama, Florida, Louisiana, and Mississippi D.R. Hortons average sales price moves sideways D.R. Hortons average sales price in Q3 2025 ($369,600) was -7.3% below the third-quarter peak in Q3 2022 ($398,800). Its possible that some of the drop in average sales price is due to shifts in product and geographic mix. Instead of outright price cuts, D.R. Horton has preferred to offer bigger incentives this cycle, such as mortgage rate buydowns. Regardless, D.R. Hortons average sales price confirms that upward pricing momentum has stalled in many markets. D.R. Hortons incentive spend has caused margin compression D.R. Horton reported a 21.8% gross margin on homes for Q3 2025. Thats down from 24.0% in Q3 2024; however, its unchanged from its Q2 2025 gross margin (21.8%). The fact that the margin didnt further compress quarter-over-quarter is why some investors bought the stock back. However, D.R. Horton acknowledged that, looking ahead, the ongoing housing market softening still points towards a bit higher incentives. Our commentary really over the last year has been that incentives have been increasing. That’s been the main driver for the gross margin decline over the last year. Our operators are striving every day to strike the best balance between hitting pace and maintaining margin in each community to maximize returns. And so they’re using all the levers they have with incentives to try to balance that. And so we have seen the pace of incentive cost increases and the pace of margin decline moderate a bit over the last couple of quarters and then this quarter it held flat sequentially [quarter-over-quarter], Jessica Hansen, head of investor relations at D.R. Horton, said during ther earnings call on July 22, 2025. Hansen added that: But the trend is still pointing towards a bit higher incentives, and we don’t see significant offsets to that, though we will continue to work on costs on the construction side. On Tuesday, D.R. Horton told investors expect Q4 2025 gross margins to come in between 21.0% and 21.5%. Labor hasnt been an issue for D.R. Horton yet despite the increased ICE crackdown From labor availability, it’s plentiful. We have the labor that we need. Our trades are looking for work. And that’s why you’ve seen sequential and year-over-year reduction in our cycle time. Because we have the support we need to get our homes built. And, you know, given those efficiencies, reductions in stick and brick [costs] over time. Some of that is from design. And efficiency of the product that we’re putting in the field. And some of that is just from the efficiency of our operations, D.R. Horton CEO Paul Romanowski said during their earnings call on July 22, 2025. Tariffs havent coincided with higher stick-and-brick costsbut lumber tariffs are something to watch On Tuesday, D.R. Horton told analysts that stick-and-brick costs are down 2% year-over-year and down 1% quarter-over-quarter. Note: My understanding is that stick-and-brick costs include direct construction costs of building a home on-site using traditional wood materials like lumber (“sticks”) and masonry materials like concrete (“bricks”). These costs include both materials (e.g., lumber, drywall) and labor (plumbers, roofers, etc.). Although the White House hasnt included Canadian softwood lumber on their broader tariff list, the U.S. government is preparing to more than double the duties on Canadian lumber imports. As a part of its annual review, the U.S. Department of Commerce plans to raise the tariff on Canadian lumber from 14.45% to 34.45%. The U.S. Department of Commerce argues that Canadian lumber is being unfairly subsidized and sold below market value in the U.S. It [higher duties on Canadian lumber] will have some potential impact, but we’ve not quantified that. I know it is a significant step up in the tariff rates, I think, going to effect next month. But, you know, we’re buying some percentage of that wood and there’s some substitutionary product that would be available as well. Based on where that pricing ultimately settles, D.R. Horton chief operating officer Michael Murray said during their earnings call on July 22, 2025. Homebuilder stocks got a little bounce following D.R. Hortons earnings Following the earnings reports from D.R. Horton and PulteGroup on Tuesday, Wall Street gave homebuilder shares a slight bounce. While the move doesnt return shares to the highs reached around September 2024, it could signal that some on Wall Street believe homebuilder margin compression is losing momentum.
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E-Commerce
U.S. President Donald Trump said on Friday he liked a strong dollar but “you make a hell of a lot more money” with a weaker one. “So when we have a strong dollar, one thing happens: It sounds good. But you don’t do any tourism. You can’t sell tractors, you can’t sell trucks, you can’t sell anything,” Trump said at the White House before leaving on a trip to Scotland. “It is good for inflation, that’s about it.” The dollar index, which measures the greenback’s strength against six major currencies, steadied on Friday after hitting two-week lows earlier in the week. It is still down roughly 10% over the six months Trump has been in office. Trump has often complained that dollar strength blunts U.S. export competitiveness and hurts U.S. manufacturing and jobs. Trump told reporters on Friday that manufacturers would be the first to benefit from a falling dollar, citing construction and mining equipment maker Caterpillar, whose shares have risen 16% over the last month. Japan and China fought for weaker currencies for decades and were able to dominate markets over the years, Trump said. “Now it doesn’t sound good, but you make a hell of a lot more money with a weaker dollar – not a weak dollar but a weaker dollar – than you do with a strong dollar,” he said. At the same time, he acknowledged that pushing for a weaker dollar wasn’t a good look, saying a strong dollar is good psychologically. “It makes you feel good,” he said. “I love strong dollars.” Steve Holland and Maiya Keidan, Reuters
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E-Commerce
President Donald Trump on Thursday signed an executive order mandating that federal authorities clarify whether college athletes can be considered employees of the schools they play for in an attempt to create clearer national standards in the NCAA’s name, image and likeness era.Trump directed the secretary of labor and the National Labor Relations Board to clarify the status of collegiate athletes through guidance or rules “that will maximize the educational benefits and opportunities provided by higher education institutions through athletics.” The order does not provide or suggest specifics on the controversial topic of college athlete employment.The move comes after months of speculation about whether Trump will establish a college sports commission to tackle some of the thorny issues facing what is now a multibillion-dollar industry. He instead issued an order intended to add some controls to “an out-of-control, rudderless system in which competing university donors engage in bidding wars for the best players, who can change teams each season.”“Absent guardrails to stop the madness and ensure a reasonable, balanced use of resources across collegiate athletic programs that preserves their educational and developmental benefits, many college sports will soon cease to exist,” Trump’s order says. “It is common sense that college sports are not, and should not be, professional sports, and my administration will take action accordingly.”There has been a dramatic increase in money flowing into and around college athletics and a sense of chaos. Key court victories won by athletes angry that they were barred for decades from earning income based on their celebrity and from sharing in the billions of revenue they helped generate have gutted the amateurism model long at the heart of college sports.Facing a growing number of state laws undercutting its authority, the NCAA in July 2021 cleared the way for athletes to cash in with NIL deals with brands and sponsors deals now worth millions. That came mere days after a 9-0 decision from the Supreme Court that found the NCAA cannot impose caps on education-related benefits schools provide to their athletes because such limits violate antitrust law.The NCAA’s embrace of NIL deals set the stage for another massive change that took effect July 1: The ability of schools to begin paying millions of dollars to their own athletes, up to $20.5 million per school over the next year. The $2.8 billion House settlement shifts even more power to athletes, who have also won the ability to transfer from school to school without waiting to play.At Big Ten Conference football media days in Las Vegas, Purdue coach Barry Odom was asked about the Trump order.“We’ve gotten to the point where government is involved. Obviously, there’s belief it needs to be involved,” he said. “We’ll get it all worked out. The game’s been around for a hundred years and it’s going to be around 100 more.”The NCAA has been lobbying for several years for limited antitrust protection to keep some kind of control over this new landscape and avoid more crippling lawsuits but a handful of bills have gone nowhere in Congress. Trump’s order makes no mention of that, nor does it refer to any of the current bills in Congress aimed at addressing issues in college sports.NCAA President Charlie Baker and the nation’s largest conferences both issued statements saying there is a clear need for federal legislation.“The association appreciates the Trump administration’s focus on the life-changing opportunities college sports provides millions of young people and we look forward to working with student-athletes, a bipartisan coalition in Congress and the Trump administration,” said Baker, while the conferences said it was important to pass a law with national standards for athletes’ NIL rights as soon as possible.The 1,100 universities that comprise the NCAA have insisted for decades that athletes are students who cannot be considered anything like a school employee. Still, some coaches have recently suggested collective bargaining as a potential solution to the chaos they see.It is a complicated topic: Universities would become responsible for paying wages, benefits, and workers’ compensation and schools and conferences have insisted they will fight any such move in court. While private institutions fall under the National Labor Relations Board, public universities must follow labor laws that vary from state to state and it’s worth noting that virtually every state in the South has “right to work” laws that present challenges for unions.Trump’s order also: Calls for adding or at least preserving athletic scholarships and roster spots for non-revenue sports, which are those outside football and basketball. The House settlement allows for unlimited scholarships but does impose roster limits, leading to a complicated set of decisions for each program at each school that include potential concerns about Title IX equity rules. Trump said “opportunities for scholarships and collegiate athletic competition in women’s and non-revenue sports must be preserved and, where possible, expanded.” Asks the Justice Department and Federal Trade Commission to “preserve college athletics through litigation” and other actions to protect the rights and interests of athletes a stance that could influence ongoing lawsuits filed by athletes over eligibility and other issues. Directs White House staff to work with the U.S. Olympic and Paralympic Committee to protect the collegiate pipeline feeding Team USA. College sports programs produce around three-quarters of U.S. Olympians at a typical Summer Games, but some are on uncertain footing as schools begin sharing revenue with athletes and the lion’s share going to football and basketball. Will Weissert, Associated Press AP National Writer Eddie Pells contributed.
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E-Commerce
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