ConDig (26-Sept-17).  US homebuilder D.R. Horton has slashed its cash flow from operations forecast by 50% for fiscal 2017 due to building delays after two major hurricanes struck the US this month.

For its fiscal year, the Fort Worth, Texas-based company expects cash flow from operations of $150 million compared with its previous guidance of $300 million.

It comes D.R. Horton said that hurricane Harvey and Irma had caused construction delays and its backlog conversion rate for its fiscal fourth quarter was about 85% compared with a previous range of 88% to 90%.

Selling, general and administrative expenses as a percentage of homebuilding revenues are also now set to be about 8.6%, up from a previous forecast of 8.3% to 8.4%.

The forecast comes as Miami-based homebuilder Lennar Corp also said earlier this month that it expects delays to about 700 home deliveries in Florida, Georgia and South Carolina following the widespread impact of hurricane Irma. Hurricane Harvey is also expected to impact about 120 new orders and deliveries in the third quarter, and is expected to delay deliveries of 130 homes in the fourth quarter.

Hurricane Harvey devastated the Houston area earlier this month and caused widespread flooding. Estimates for the cost of Hurricane Harvey’s damage range from $65 billion to $190 billion and could end up being one of the most expensive disasters in US history.

The destruction from Hurricane Irma, which caused widespread damage across Florida and into Georgia and South Carolina this month, could cost between $50 billion and $100 billion.

A shortage of homes persists in the US as home builders face lot and labor shortages, along with rises in building material costs, which is hampering the industry’s progress.

There is a growing sense that the impact of Harvey and Irma could exacerbate housing shortages as labor is pulled in for rebuilding efforts and material costs increase.