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Despite ongoing inflation and elevated mortgage rates, D.R. Horton raised its guidance for the rest of the year, saying it’s primed to take more market share from its competitors.

“We are well positioned with our affordable product offerings and flexible lot supply,” chairman Donald Horton said. “We are focused on maximizing returns in each of our communities and generating consistently strong cash flows from our home building operations.”

The home builder has revised its full-year revenue projections to the range of $36.7 billion to $37.7 billion, compared with its prior forecast of $36 billion to $37.3 billion. D.R. Horton is expecting full-year deliveries in the range of 89,000 to 91,000 homes, which is above its prior forecast of 87,000 to 90,000 homes.

Horton said the limited supply of existing and new homes at affordable prices and strong demographics continue to support demand for the home builder’s products.

D.R. Horton grew net sales orders 14% on a year-over-year basis and 46% compared with the first quarter. The builder’s 26,456 net orders in the quarter represented a value of $10.1 billion.

In the quarter, the home builder closed 22,548 homes, a 15% increase compared with the second quarter of fiscal 2023. The company’s cancellation rate for the second quarter was 15%, an improvement from 18% in the prior-year quarter and 19% in the first quarter. The average closing price for homes in the quarter was $375,500, flat sequentially and down 1% from the prior-year period.

“To address affordability for homeowners, we are still using incentives such as mortgage rate buydowns,” executive vice president and chief financial officer Bill Wheat said. “We have reduced the prices and sizes of our homes where necessary. Based on current market conditions and mortgage rates, we expect our incentives to remain at these elevated levels in the near term.”

Of D.R. Horton’s 45,000 homes in inventory at the end of the quarter, 27,600 were unsold; 7,300 of the company’s unsold homes at quarter’s end were completed. President and CEO Paul Romanowski said the builder started 24,900 homes in the quarter and cycle times returned to the historical average of four months.

The company generated home building revenue of $8.5 billion in the second quarter, an increase of 13% compared to the prior-year period. D.R. Horton reported profits of $1.2 billion, or $3.52 per share, an increase of 24% and 29%, respectively. The results topped analyst projections of $1.02 in profit, or $3.06 per share.

“Home buyer demand during the spring selling season thus far has been good despite continued affordability challenges,” Romanowski said during the company’s earnings call with investors.

“With 45,000 homes in inventory, we are well positioned to continue consolidating market share. Our average construction cycle times are back to normal, and our housing inventory turns are improving."

At the end of the quarter, D.R. Horton’s land and lot portfolio for home building totaled 617,200 lots. Twenty-three percent of the lots were owned, and 77% were controlled through land and lot purchase contracts. In the second quarter, Wheat said D.R. Horton invested $2.4 billion in lots, land, and development, including $760 million for land development, $230 million for land acquisition, and $1.4 billion for finished lots.

During the first half of the year, 62% of the company’s homes closed were on lots developed by Forestar Group, a publicly traded residential lot development company that is a subsidiary of D.R. Horton, or third parties.