D.R. Horton: Smaller is better in some markets

— — D.R. Horton's chief executive says smaller, more affordable homes are selling well in some areas and will bring higher profits to the nation's largest home builder.

CEO Donald Tomnitz said the smaller homes were particularly popular in Seattle and Portland, Ore. Smaller homes are cheaper to build and attract first-time buyers because they are priced competitively with foreclosures.

Tomnitz also said smaller markets such as Albuquerque, N.M., and Mobile, Ala., seeing stronger sales, while larger markets like Florida, Las Vegas and Phoenix remain weak.

Tomnitz made the comments Tuesday, a day after announcing it lost $108 million in the second fiscal quarter, including a $48 million charge for falling land values and unsold homes.