D.R. Horton today announced the launch of Freedom Homes—a brand the company says is “focused on offering affordable homes specifically for the active adult buyer.”
Fort Worth, Texas-based Horton plans to roll out its new line of homes in Florida, Texas, and Arizona. By the end of fiscal 2016, it expects to have Freedom Homes communities open in at least eight markets. By the end of fiscal year 2017, Freedom Homes should be in approximately one-third of D.R. Horton’s 78 operating markets.
Donald R. Horton, Chairman of the Board, said in a press release, “We are excited to offer Freedom Homes as an affordable alternative for active adults seeking a carefree low-maintenance lifestyle in an age-restricted community. We strive to be the leading builder in each of our operating markets across our broad geographic footprint, and the addition of Freedom Homes to our diverse family of brands will allow us to continue to expand our industry-leading market share.”
In 2014, Horton launched the successful Express Homes lines—a brand of affordable homes geared to the first time buyer. The concept took off.
Stephen Kim, an analyst with Barclays, told BUILDER last year that D.R. Horton targets the mid-to-high teens for its gross profit margin on Express. "The initial run of Express homes generated gross margins somewhere in the high teens," Kim says. "Horton is doing this, and apparently, they are doing it pretty well."
In fact, the brand was so successful that empty nesters began to elbow millennials out of their first homes. “When we launched Express in Florida, 40%, 45% were actually the people buying their last home, not their first home,” said Horton CEO David Auld on the builder’s second quarter 2016 earnings call. “And that’s something we’re taking note of, and making sure that we’re in a position to accommodate those buyers.”
Freedom Homes looks like a way that the builder can meet the needs of those buyers.