D.R. Horton CEO Donald Tomnitz discusses how homebuilder plans to deal with market headwinds

On the Call: D.R. Horton CEO Donald Tomnitz

D.R. Horton Inc. said Friday it turned a profit in its fiscal second quarter, as a flurry of first-time homebuyers led to increases in new orders and sales.

On a conference call afterward, D.R. Horton President and CEO Donald Tomnitz responded to an analyst’s question about possible headwinds for homebuilders in the housing market.

QUESTION: I see a lot of, I guess what I could call headwinds, coming now that the tax credit has ended … So I’m kind of wondering how you guys are thinking about all of that and how much do you think it’s going to affect your demand going forward?

ANSWER: We continually in this company adapt to whatever the market conditions are. And, prior to this downturn, four years ago, five years ago, we had a bigger percentage or equal percentage of second-time homebuyers versus first-time homebuyers.

It was our decision three years ago to appeal to the first-time homebuyers, and we reworked our product line and reworked our product, both size and finish-out, just simply because of the fact that we believed that people who had existing homes — second-time, third-time homebuyers — were going to have a difficult time selling their existing home to buy a first home, so we focused on that first-time homebuyer.

I would also say to you, this quarter clearly we had fewer first-time homebuyers than we had in the first quarter. So we have the flexibility in this company to adapt our business model, our product line and our offerings to whatever the market is.

So please don’t worry about our ability to meet the market because we have met the market for 20-some odd years and will continue to do so.