In 2014, D.R. Horton (NYSE:DHI) introduced their Express Homes brand. The goal of the brand was to capture the entry-level home market with an average selling price of less than $200,000 per home and it appears to be working.
For the first quarter of D.R. Horton’s fiscal 2016 (that’s the fourth quarter of 2015 to the rest of us), Express Homes accounted for 25% of DHI’s homes sold, 22% of homes closed, and 15% of revenue with an average selling price of $199,000 per home, meeting their goal for a sub $200,000 price point. It’s part of an effort to catch a secular trend that’s taking place. Demographics could bolster the US housing market for years to come, particularly at the low end as millennials age and begin to purchase their first homes. According to Zillow, the average first-time homebuyer is 33 years old and there is a population swell set to hit this age over the next decade. D.R. Horton has positioned itself to ride this wave as millennials transition from renters to owners.