Despite continued high mortgage rates and inflationary pressures, D.R. Horton—the largest company on the 2023 BUILDER 100 list—delivered “strong results” in its fiscal third quarter, according to chairman of the board Donald Horton.

“Our net sales orders increased 37% from the prior-year quarter, as the supply of both new and existing homes at affordable price points remains limited and demographics supporting housing demand remain favorable,” Horton said.

During the quarter, the home builder improved revenue 11% on a year-over-year basis to $9.7 billion, beating consensus estimates by over $1 billion. D.R. Horton reported profits per share of $3.90 in the fiscal third quarter, also well above analyst expectations of approximately $2.79.

“We are well-positioned with our experienced operators, diverse product offerings, and flexible lot supply and are focused on supplying more homes to meet market demand and maximizing returns and capital efficiency in each of our communities,” Horton said.

The strong performance for D.R. Horton in the third quarter was driven by a 5% year-over-year improvement in home building revenue to $8.7 billion in the fiscal quarter. The builder closed 22,985 homes in the quarter, an 8% year-over-year improvement. In addition to net sales orders improving 37% year over year, the value of net sales orders improved 26% in the quarter.

The builder’s cancellation rate—measured as canceled sales orders divided by gross sales orders—was 18% in the third quarter, an improvement from 24% in the third quarter of 2022. D.R. Horton’s sales order backlog of homes under contract at quarter’s end dropped 34% to 19,186 homes and decreased 38% in value to $7.4 billion compared with the prior-year period.

The builder has 43,800 homes in inventory, of which 25,000 were unsold. Approximately 5,700 of D.R. Horton’s unsold homes at the end of the third quarter were completed. The company’s home building and lot portfolio totaled 555,100 lots at the end of the third quarter, of which 25% were owned and 75% were controlled through land and lot purchase contracts.

D.R. Horton generated $162.1 million of pre-tax income on $667.1 million in revenue from its rental operations in the third quarter, an improvement from $42.6 million pre-tax income on $109.7 million in revenue during the same quarter in 2022.

The builder sold 1,754 single-family rental homes and 230 multifamily rental units during the third quarter, compared with 84 single-family homes and 298 multifamily units in the prior-year period. The company’s rental inventory at quarter’s end included 7,570 single-family homes—of which 6,270 were completed—and 8,800 multifamily units—of which 6,920 were under active construction.