by Calculated Risk on 11/12/2010 04:11:00 PM

A few excerpts from home builder D.R. Horton's conference call:

CEO Don Tomnitz:

As we look to fiscal 2011, we ... expect another very challenging year for the homebuilding industry, as the fundamental drivers of demand, the overall economy, job growth, and consumer confidence are still very weak. In addition, we do not expect any stimulus in fiscal 2011 similar to the federal tax credits that were in effect last year.

All of these factors make it likely that our sales and closing volumes will be below our volumes in fiscal 2010.

And from the Q&A:

Based on current sales demand and the fact that the tax credits were supporting sales demand last year, we expect sales in the next two quarters to be lower than last year.
...
There are still challenges in the homebuilding industry. Rising foreclosures, significant existing home inventory, high unemployment, tight mortgage lending standards, and the weak consumer confidence ... the real key is that the traffic count in our sub-divisions is down, and I don’t think there is a lot of pricing adjustment that we can do, it’s just a function of the lack of traffic. So until there is some consumer confidence, until we start to grow jobs, I think we’re going to continue to be faced with rather flat demand just simply because buyers don’t feel confident about the future and they’re not going out there looking for a house in the numbers that they were certainly when the tax credits were there.

Until the excess housing inventory is absorbed, the home builders will be under pressure. There is still a long way to go ...