Whether you’re a first-time buyer or an experienced investor, there are certain things to look for when you’re purchasing a new home. You’ll want to consider whether the builder follows the federal standards and building codes, as well as whether they offer customer service.
Fitch Ratings affirmed D.R. Horton’s (NYSE: DHI) ratings
During the past housing downturn, DHI was able to successfully execute its speculative building strategy. A significant amount of inventory was built on this basis. These homes generally sell for about 200bp less than pre-sold homes. This has helped DHI to generate consistently attractive margins. In addition, DHI has demonstrated its financial flexibility to manage through cyclical downturns.
Fitch expects DHI to generate solid CFFO during most housing cycles. DHI’s debt to EBITDA is expected to remain below 1.0x for the foreseeable future.
DHI’s ratings also take into account its strong balance sheet, liquidity position, and geographic diversity. Fitch also expects DHI to maintain a disciplined capital-allocation strategy in the face of a challenging housing market. The company has demonstrated that it can execute its strategy in cyclical downturns, and it has a strong rating case.
Fitch expects DHI to maintain an adequate liquidity position and generate sufficient FCF to offset capital expenditures. Fitch expects DHI to maintain interest coverage above 30x through fiscal 2020, and to have a net debt-to-capitalization ratio below 20% in fiscal 2023.
Compliance with federal standards and building codes
Among the building trades sleuths, the best aficionado of the field will tell you that the largest percentage of their time is spent on the task of complying with state building codes. As they work with a dizzying array of building materials and components, they must remain current to avoid costly litigation. The best way to do this is to get a good handle on the state’s zoning laws and building standards.
The State Building Code Council (SBCC) is an organization of voting members representing the building industry. Each month, the council holds several public hearings and other events that give the industry a forum to voice its concerns. This group also holds annual meetings and is on a constant quest to keep up with the times.
The most important function of the council is to set the direction of the state’s building code. This is a multi-faceted role that includes the licensing of contractors, zoning issues, and enforcement of the state’s Uniform Building Code and Energy Code. In the end, the building industry may be able to reap the benefits of the code, but at the cost of the customer.
Customer service
DR Horton is a homebuilder that builds both single-family and multi-family homes. The company has locations in 29 states, and each location has a dedicated customer service team. In some cases, the customer service team has been unable to meet customers’ needs, and customers have written reviews about the company’s customer service.
DR Horton has received some negative reviews from customers about its customer service. Some customers have complained that the company’s customer service is lacking, while others have mentioned that the company’s customer service team is very helpful. However, most reviews indicate that the company’s homes are of good quality and that the customer service process is efficient. Some reviews indicate that DR Horton’s customer service is helpful when customers have questions about their homes and that it is easy to apply for financing. However, DR Horton has not provided details about its warranty coverage on the company’s website. It is recommended that consumers call the company’s customer service team for information about their warranty coverage.