Part 7/10:
D.R. Horton’s industry counterparts are exhibiting similar signs of stress. For instance, Lenar has pumped up their incentives by 45%, while KB Homes has recorded its highest cancellation rates in five years. Such widespread signals of distress across the industry raise alarm bells that suggest a systemic issue rather than isolated incidents.
Signals from Wall Street
Despite the chaos, Wall Street seems oblivious, with 65% of analysts maintaining “buy” ratings on D.R. Horton. This stark disconnect is reminiscent of the optimism seen in early 2007, just months before the last market downturn. The smart money, however, is moving differently; major hedge funds have reduced their positions by 15%, while short interest has risen by 32% in just three months.