Key Points
- Homebuilding funds like the SPDR S&P Homebuilders ETF have seen very weak performance for well more than year.
- In the latest round of homebuilder earnings, D.R. Horton impressed, beating estimates on EPS and seeing a solid order increase.
- Pulte and NVR saw sales and EPS take big hits, but analysts are eyeing meaningful recoveries in these names.
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Homebuilders have been going through a rough patch as of late. Across top homebuilding stocks, analysts expected revenues and earnings to fall considerably in Q1 2026, and this is exactly what happened.
For over a year, stocks in this industry have been range-bound. The SPDR S&P Homebuilders ETF (NYSEARCA: XHB) is a commonly used proxy for this industry, tracking the performance of over 30 homebuilders or housing-related stocks. The fund has delivered an approximate total return of just 5% since the start of 2025. With interest rates still relatively high and housing affordability low, stocks in this space have struggled to gain much momentum.
Three of the top U.S. homebuilders just reported earnings; here’s how they stacked up and what it signals about the industry going forward.
Pulte’s EPS Falls 30%, Analysts Point to Moderate Upside
Pulte Group (NYSE: PHM) is one of the more diversified U.S. homebuilders targeting a balanced mix of market segments. In Q1, 38% of the company’s sales came from first-time buyers, while “move-up” buyers accounted for 39%. Its “active adult” buyer group, which includes sales in 55+ communities, accounted for 23% of sales.
Pulte saw its sales fall by 12% year over year (YOY) to $3.41 billion, essentially in line with estimates.
The significant decline came even as the company offered much greater incentives to home buyers. This led to a substantial 310 basis point compression in gross home sales margin.
In turn, adjusted earnings per share (EPS) tanked by just over 30% to $1.79, 1 cent short of estimates. The company’s new orders grew moderately by 3% YOY, similar to the 4% increase seen in Q4 2025, but Pulte did not change its guidance for the full year.
Still, Pulte saw a modest 2.4% gain after its report, indicating that the results were better than some investors had feared.
Several analysts tracked by MarketBeat raised their price targets after the report, with updates averaging around $147. This figure implies healthy upside in shares and is slightly above the MarketBeat consensus price target of around $141.
D.R. Horton Outperforms Against Low Expectations, Targets Spread
Homebuilding behemoth D.R. Horton (NYSE: DHI) was a clear standout. The company, which focuses on first-time home buyers, posted revenue of $7.56 billion. This marked a moderate 2% YOY drop, roughly in line with expectations and by far the best figure among this group. The firm also posted a solid bottom-line beat, with adjusted EPS of $2.24 versus estimates of $2.15. The figure fell by 13% YOY.
Forward-looking metrics were particularly strong, with home orders rising by 11% YOY, the highest rate among these names. The company did slightly lower the top end of its full-year guidance to $34.5 billion, but its midpoint estimate of $34 billion still exceeded estimates.
D.R. Horton also saw considerable margin compression, with the firm’s adjusted home sales gross margin declining by 230 basis points to 19.7%. Overall, these results allowed DHI shares to soar by nearly 6% post-earnings.
The MarketBeat consensus price target near $169 implies only around 5% upside in shares. Notably, all analysts who issued updates after the report raised their price targets; however, updated targets averaged around $165. They also showed significant variance, ranging from $206 to $123. These figures imply upside of more than 25% and downside of more than 20%, respectively.
NVR: Sales Plummet, Order Growth Ticks Up
NVR (NYSE: NVR) sits more in the middle of the market, with its average home selling price coming in at $457,000 in Q1 2026. This was squarely between Pulte’s $542,000 average selling price and D.R. Horton’s $362,000, showing the differences in income among their respective customers.
The company saw its revenues take a 21.7% hit, falling to $1.91 billion. This significantly missed the estimates of $2.09 billion. EPS fell by 28.6% to $67.76, missing estimates of $79.97 by a wide margin. The company’s gross margin compression mirrored D.R. Horton, with the figure falling 230 basis points to 19.6%.
However, like the other two names, new orders saw a moderate increase, rising by 7%. This was an improvement over the 4% increase in the prior quarter. NVR’s average selling price remained flat YOY, while the metric fell by 3% at Pulte and 5% at D.R. Horton. Combined with rising orders, this is a positive sign for NVR, showing that the company isn’t compromising on price to drive demand. Notably, NVR does not provide forward guidance. NVR shares fell 4.7% following the results.
Multiple analysts dropped their targets after the report, with updates averaging approximately $7,465, moderately below the consensus target near $7,650. This updated average target implies just under 15% upside in shares.
Homebuilders Continue to Face a Difficult Environment
Earnings across these three names showed a trend: revenue and margin hits across the industry. D.R. Horton was a bright spot, with the lowest sales decline and the highest order growth. Encouragingly, orders rose across all names, but the industry is still in a rut. Price targets remain relatively subdued, but point to upside ahead, indicating a degree of optimism among the analyst community.
Fixed rates on 30-year mortgages briefly fell below 6% prior to the conflict in the Middle East. Rates have since risen back to 6.2%. A clear end to the conflict would be a meaningful positive for homebuilders, likely helping rates approach 6% again, improving demand.
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