DR Horton net income down 24%. Pulte off 25%. Texas inventory up 33%. Price softening accelerates. Real money supply contracts.

The cracks are showing. DR Horton booked $1.02 billion in net income for Q3 2025, a sharp drop from $1.35 billion a year ago. Revenue slid 7% to $9.2 billion. Closings fell to 23,160. The backlog shrank 16%. Order value dropped 19%. Gross margin slipped to 22.7%. Incentives increased. Liquidity held steady at $5.5 billion.

America's Largest Home Builder, DR Horton, just reported 24% decline in net income.
Less revenue, less income and revised guidance incoming at 8:30 Eastern pic.twitter.com/zCnDt0SM4M

— Mr.Awsumb (@MrAwsumb) July 22, 2025

PulteGroup followed with weaker results. Net income for Q2 landed at $608 million, down from $809 million. Closings fell 6% to 7,639. Revenue came in at $4.3 billion. Gross margin narrowed to 27.0% from 29.9%. Backlog value fell to $6.8 billion. SG and A rose to 9.1%. Incentives reached 8.7%. Financial services income dropped to $43 million. They bought back $300 million in stock. But the trend is clear. Sales are cooling. Margins are slipping. Orders have stalled. Momentum is fading.

Real money supply keeps falling. M2 adjusted for inflation has declined for six straight quarters. That is the longest stretch since the early 1980s. Credit is tight. Liquidity is draining. Mortgage rates are near 6.8%. The Fed is staying put. Tariffs are climbing. Inflation remains sticky. Builders are getting cautious.

Hawaii, California, and Montana now have the highest price to income ratios. Median home price in Hawaii is over $850,000. California is close to $790,000. Montana passed $520,000. Active listings in Hawaii hit 6,462 in June, more than before the pandemic. California and Montana are showing similar pressure. But prices remain stubborn. Buyers are pausing.

Kansas, Iowa, and West Virginia have the lowest price to income ratios, but inventory varies. West Virginia saw listings fall from 7,679 in June 2019 to 3,674 last month. That is a 52% drop. Supply is tight. Prices are not budging. Buyers face limited choice.

Nationally, active listings rose from 103,956 in June 2019 to 138,255 now. That is a 33% increase. Median home price peaked at $402,450 in 2022. Prices have edged down. Inventory is growing. Buyers are gaining ground. Sellers are making cuts.

The median age for first-time buyers is now 36, the highest ever. The barriers are affordability. Mortgage rates, insurance costs, taxes, and flat wages are taking a toll. Rates will not fix it. Only price will. Builders are blinking first. Inventory is backing them up. The next move is lower.

The median age for first-time homebuyers hit 36. That’s the highest on record. Affordability is the barrier. Mortgage rates, insurance premiums, property taxes, and stagnant wages are the drivers. Relief won’t come from rates. It will come from price. Builders are signaling it. Inventory is confirming it. The next move is down.

Housing Affordability By State

Although the U.S. housing affordability crisis is widespread, regional differences are worth examining.

According to Construction Coverage, Hawaii, California, and Montana are the three states with the highest price-to-income ratios.

Active… pic.twitter.com/jfW5t1zX2j

— Reef Insights (@ReefInsights) July 22, 2025