⚠ Returns Follow the Cycle DownModerate threat

A high return on equity in a cyclical business is a through-the-cycle average that hides violent swings, and the bad years can be very bad. When demand freezes — as in 2022, when rates hit 6,75% and national mortgage lending roughly halved¹ — prices soften, and land bought earlier must be sold into a weak market, margins compress and the return on equity that looked so impressive in the boom can fall toward mediocrity. The figure is real but not steady, and an investor who anchors on the peak-cycle return will be disappointed at the trough. Dom's returns are better than its rivals' across the cycle, but they are still the returns of a homebuilder, which means they rise and fall with rates, mortgage availability, and the national appetite for buying homes — forces entirely outside the company's control.