DHI Stock: Downgraded by Raymond James Amid Rising Mortgage Rates and Housing Affordability Concerns

DHI Stock: D.R. Horton (DHI), one of the largest homebuilders in the U.S., saw its stock downgraded by Raymond James analysts on Thursday, following concerns over the broader housing market in the wake of Donald Trump’s election win. The firm lowered its rating on DHI shares from “Outperform” to “Market Perform,” citing the expectation that mortgage rates will remain “higher for longer,” which could significantly constrain housing affordability for potential buyers.

Raymond James analysts revised their fiscal year 2025 earnings per share (EPS) estimates for DHI, lowering them to $13.25 from the previous forecast of $15.80. They also reduced their 2026 EPS estimate to $15.00. The downgrade reflects growing challenges for entry-level homebuilders, as many first-time buyers will likely face even greater affordability hurdles as we approach the spring housing market.

Buck Horne, director at Raymond James & Associates, noted in a client note that DHI was already under pressure from a competitive inventory environment and rising mortgage rates before the election. The concerns are exacerbated by buyer anxiety related to the election results and the continued strain on mortgage affordability.

DHI’s recent fiscal fourth-quarter earnings report showed weaker-than-expected home orders, further underscoring the pressure high mortgage rates are placing on the housing market. These challenges have cast a shadow over the outlook for DHI stock, which has been a key player in the homebuilding sector.

As housing affordability remains a top concern, DHI and other homebuilders may face continued volatility in the coming quarters. The ongoing impact of mortgage rates, combined with broader economic factors, will be crucial to watch as we head into 2025.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.