Despite the gloom around housing, home builder D.R. Horton beat expectations handily on earnings and revenue this past week. The shares, up 3.2% on the week, have gained 37.6% this year, in line with the iShares U.S. Home Construction exchange-traded fund’s 33%. Other builders did even better.
How did Horton do it? A lack of existing homes pushed buyers to new homes. More than half of Horton’s customers are first-time buyers who are more susceptible to pricing pressures than repeat buyers. Horton turned to mortgage-rate buy-downs, which shrink monthly payments. A National Association of Home Builders survey said that 29% of builders were using buy-downs to boost sales or cut cancellations. And Horton is introducing smaller, more-affordable floor plans.
Companies The actors union reached a tentative deal to end its 118-day strike. Elon Musk’s xAI released a chatbot with attitude named Grok that uses real-time data from his social-media company X. The Consumer Financial Protection Bureau is planning oversight into tech companies like Apple and Alphabet that offer digital wallets. Berkshire Hathaway racked up a 41% gain in quarterly earnings, mostly from insurance gains. Its cash pile hit $176 billion.
Retailers’ earnings take center stage as Wall Street debates whether the U.S. consumer can continue to defy the skeptics and power the economy after gross domestic product grew at a seasonally adjusted annual rate of 4.9% in the third quarter. Home Depot reports results on Tuesday. Target and TJX Cos. announce earnings on Wednesday, and Ross Stores and Walmart close out the week on Thursday.