[tigen]

This paragraph looks wrong. "In 2005, when D.R. Horton sold a record number of homes, it made $1.47 billion. In 2023, when it built roughly half as many, its profit was a little over three times as high, or $4.7 billion. "

It did not build half as many homes, it was 82917 homes in 2023 vs. 51172 in 2005. Also, the profit number should be corrected for inflation when comparing across almost 2 decades.

[mulmen]

1.47 billion 2005 dollars is 2.29 billion 2023 dollars.

Profit per house in 2023 dollars:

$44,751.04 in 2005

$56,683.19 in 2023

[biomcgary]

Thanks for doing this calculation! It would be interesting to know if the average square footage of houses built by the company has changed. If they have increased by 25%, the profit per square foot would be roughly unchanged.

[1659447091]

D.R.Horton home sizes have remained mostly consistent for the past 20+ years that I am aware of*

* My family worked with home builder marketing departments, and I use to enjoy seeing home & price progression in the area over the years (D.R. Horton has been and is, mostly 1200-2200sqft with a few going past that on either end). One of my many issues with this article is making the mass production builder into a bad guy. D.R. Horton IS the "Starter Home" builder, few other builders can compete for that market because the cost and time it takes to build. It's why local small builders tend to build higher quality homes, they only have the resources (money for permits, legal etc and manpower) for a few houses a year. If the profit on a home is $55k with all the marketing and construction bulk prices DRHorton gets, whats that profit for the 2-4 homes a year local builder this guy wants to replace them with? Probably not much to want to keep doing the job; always on the verge of financial collapse if 2008 happens again (many small home builders disappeared and did not come back. I dont think many people want that kind of risk to start up again). If we wait for small local builders to build homes we would be in a far worse situation than we are now.

I had the opportunity to talk, in length, to the owner/CEO of a mid-sized builder who had to sell the remaining lots from one of three communities because he couldn't keep the prices within: both a price that they would sell and price to make a profit (or break-even); the shortage of construction workers and regulatory delays and cost were a large drain on resources. It had nothing to do with having land or needing to buy land, he already had, it was simply taking too long to get through the building process. Not sure if home builders are still doing it, but many in the area were working together to try and get high-school students into construction apprenticeship/vocation programs to make up for the shortage.

[mulmen]

Maybe. I’m not a domain expert so I’m not sure that’s a meaningful metric, especially at this scale. But in general I think anyone would be happy if their business improved units sold and per unit profit. Naively I’d expect an inverse relationship.

[refurb]

Shocking! A core precept of an entire article is wrong.

[simoncion]

> > In 2023, when it built roughly half as many...

> It did not build half as many homes, it was 82917 homes in 2023 vs. 51172 in 2005.

Unless my math is wrong: (82917-51172)/82917 ~= 0.38

~40% is roughly half.