DHI · Earnings call · 2026Q3T · Full report

Rental Project Impairments

HORTON D R INC /DE/ · 2026-10-29 · Importance 34 · Surprise 42

The rental segment recorded a fourth-quarter pretax loss of $25.3 million, including a $91.4 million impairment on nine completed multifamily projects. Management said the impairment primarily reflected lower expected sales prices following recent interest-rate increases. For fiscal 2026, rental operations generated $1.2 billion of revenue and $18.2 million of pretax income, or $110 million excluding impairment charges. Rental property inventory was $2.6 billion at September 30, down 3% year over year, and management expects the balance to remain at or below that level in fiscal 2027.

Key facts

• A spike in interest rates in the last quarter negatively affected expected values on some D.R. Horton rental projects and led a subset of completed projects to trigger impairment.
• Elevated interest rates are expected to dampen potential margins on D.R. Horton’s forward rental sales into fiscal 2027, particularly in multifamily.
• D.R. Horton's rental segment reported a fourth-quarter pretax loss of $25.3 million, including a $91.4 million inventory impairment charge related to nine completed multifamily projects.
• D.R. Horton's rental project impairments primarily reflected lower expected sales prices due to recent interest-rate increases.