D.R. Horton Sees 26 Perecent Spike In 4Q Orders

ALEX VEIGA

Homebuilder D.R. Horton Inc., saw new home orders spike 26 percent from a year ago in the latest quarter as buyers raced to close deals and take advantage of a federal tax credit. But a wider-than-anticipated loss fueled by write-downs sent shares tumbling more than 15 percent Friday.

The surge in orders came as many first-time homebuyers sought to qualify for an $8,000 tax credit that was set to expire at the end of this month before Congress extended it into next year.

D.R. Horton, which caters primarily to first-time buyers, and other builders have seen home orders improve thanks to the incentive. But the tax credit also has raised concerns that it has merely pulled sales forward.

Some builders noted recently that customer traffic began to slow in September and October as would-be buyers realized they might not be able to close on a home by the tax-credit deadline. And new home sales in September dropped 3.6 percent nationwide — the first decline since March.

D.R. Horton CEO Donald Tomnitz told Wall Street analysts orders began to slow this month, but predicted that completed sales would rise from now on.

"We strongly believe our closings in 2010 will be greater than in 2009 and that we will continue this growth in the upcoming years," Tomnitz said.