(Reuters) – Homebuilder D.R. Horton Inc posted a 65% rise in quarterly profit on Tuesday, benefiting from record-high property prices as demand far outpaced supply that was crippled by raw material and labor shortages.
Demand for housing remains strong as home buyers take advantage of low mortgage rates before the government raises them next year.
The 30-year fixed mortgage rate rose to an average of 3.14% last month, before coming down to 3.09% for the week ending Nov. 4, according to data from mortgage giant Freddie Mac.
“While mortgage rates fell after several weeks on the rise, we expect future upticks due to stronger economic data and as the Federal Reserve pulls back on its stimulus,” said Sam Khater, mortgage company Freddie Mac’s chief economist.
Rising borrowing costs could make homeownership less affordable for some first-time buyers.
The 30-year fixed mortgage rate stood at 3.97% in September 2019 before the pandemic.
The top U.S. homebuilder said homes closed in the fourth quarter increased 8% to 21,937 homes compared to 20,248 units a year earlier.
Net income attributable to the largest U.S. homebuilder rose to $1.33 billion, or $3.7 per share, in the quarter ended Sept. 30, from $829 million, or $2.24 per share, a year earlier.
Revenue rose to $8.11 billion from $6.4 billion a year earlier.
(This story corrects to say “fourth” quarter, not “third”, in paragraph 7)
(Reporting by Kannaki Deka in Bengaluru; Editing by Shinjini Ganguli)