With many buyers on the sidelines due to affordability challenges and rising mortgage rates, builders have seen a dramatic slowdown in the pace of sales and have dramatically slowed down construction starts, leaving builders with more land than they plan to build on in the near future.
That has brought new land acquisitions by builders in Dallas-Fort Worth and throughout the U.S. to a screeching halt over the past few months, with many public builders telling investors during earnings calls that they have walked away from land contracts, paying millions in fees to do so.
Arlington-based D.R. Horton, the largest U.S. homebuilder, wrote off $34 million in costs last quarter related to land and home-lot contracts it terminated or expects to terminate. The company saw a 15% year-over-year decrease in sales orders last quarter to 13,582 homes, and its cancellation rate rose to 32% last quarter from 24% in the previous quarter.
