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Last Updated: Thursday, 8 March 2007, 11:06 GMT
Bleak housing outlook for US firm
Newly finished homes in Texas
2008 should at least be better than 2007, Mr Tomnitz believes
The boss of the largest US housebuilder has warned that his company's fortunes are likely to "suck" in 2007.

DR Horton chief executive Donald Tomnitz told investors that the weak US housing market would continue to hit home prices during the year.

"I don't want to be too sophisticated here, but '07 is going to suck, all 12 months of the calendar year," he said.

US housebuilders have been struggling with a glut of unsold new homes in the wake of a wider industry slowdown.

The number of new homes built in the US fell to a near-decade low in January, the US Commerce Department reported last month.

I don't think '08 is going to be a great year, but it's going to be much better than '07
Donald Tomnitz, DR Horton

On Wednesday, the Federal Reserve's closely watched Beige Book economic report revealed that "almost all (Fed Reserve) districts reported that housing markets remained weak".

Policymakers have previously warned of the potential impact of the housing slowdown on the wider economy.

However, the Beige Book report noted that there were "signs of stabilization" across the industry.

Write-off warning

Mr Tomnitz said DR Horton planned to build 26,000 houses in 2007, down from a recent annual peak of 40,000.

The company's net income for the three months to the end of December 2006 fell to $109.7m (56.7m), from $310.1m at the same time the previous year.

Mr Tomnitz warned that DR Horton may have to make further write-offs to reflect the number of unsold homes and lower land values.

"I don't think '08 is going to be a great year, but it's going to be much better than '07," he added.


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