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UPDATE 2-D.R. Horton profit beats as lower home prices boost demand

Sanjana Shivdas and Dominic Roshan KL

(Adds analyst comment, details on mortgage rates, shares)

July 30 (Reuters) - No.1 U.S. homebuilder D.R. Horton Inc topped Wall Street estimates for quarterly profit and revenue on Tuesday, as lower home prices and declining mortgage rates whetted buyer appetite.

The company's shares, however, slipped 1.7% to $43.22 premarket, as orders rose 6.4% to 15,588 homes, but fell short of analyst estimates of 15,663 homes, according to IBES data from Refinitiv.

Barclays analyst Matthew Bouley said that despite the topline beat and encouraging pricing, orders in the quarter were a modest disappointment following greater sequential improvement observed at peers.

Cheaper mortgage rates and the lowest unemployment rate in nearly 50 years are supporting demand for housing, but expensive materials and land and labor shortage are constraining builders' ability to reduce prices.

Horton lowered its average home price by 2% to $296,450 in the quarter, pushing sales up 13.2% to 15,971 homes.

The 30-year fixed mortgage rate has dropped to an average of 3.81% from a more than seven-year peak of 4.94% in November, according to data from mortgage finance agency Freddie Mac.

Horton's stock trades at 10.5 times forward earnings, a premium to homebuilders Lennar Corp, which trades at 8.5, PulteGroup Inc at 8.9 and Toll Brothers Inc at 8.6 times.

Net income attributable to the company rose to $474.8 million, or $1.26 per share, in the third-quarter ended June 30, from $453.8 million, or $1.18 per share, a year earlier.

Revenue jumped 10.6% to $4.91 billion.

Analysts, on average, expected a profit of $1.07 per share on revenue of $4.52 billion. (Reporting by Dominic Roshan K.L. and Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber)