It may seem like a bold move, with other builders, like Pulte Homes, focusing much more on higher-end products, since that's what is selling. But analysts are extolling the move, calling it unique and smart.
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"We view it as the right move," said Stephen East, senior managing director of research firm ISI Group. "Horton's cost structure and operational experience at the entry level makes them one of the few builders that can do this profitably. Also, we are firmly convinced the first-time-buyer segment is getting access to more credit, which will lead to more demand for this low-entry level product."
Horton executives admit they do not see a lot of banking institutions willing to buy lower credit-quality loans. Congress is still mired in debate over reforming the mortgage funding market, and while there are strong proposals in place for getting private capital back in the mix, real action is not expected any time soon.