(Reuters) - D.R. Horton Inc held out hope on Friday of improved demand for its homes in the spring selling season after a tough few months where higher prices and mortgage rates kept some buyers out of the market.

FILE PHOTO: A house built by the D.R. Horton company is seen for sale in Arvada, Colorado January 24, 2017. REUTERS/Rick Wilking/File Photo

Shares of the largest homebuilder in the United States by volume bounced around in morning trade after a results release which underlined the impact of higher prices on demand for more expensive housing.

Speaking to analysts after the company’s first-quarter results, Chief Executive Officer David Auld remained upbeat about a U.S. housing market which saw sales tumble to their lowest in three years in December and house price increases slow.

“The market is performing, I would say, pretty much as we expected, maybe a little better,” he said. “It’s going to be a little easier to get people on contract through this spring if it continues.”

Chief Operating Officer Michael Murray added that he expected the spring selling season to be stronger compared to the last several years.

House prices, which have taken years to recover from the 2008 sub-prime crisis, were driven higher last year by a generally robust U.S. economy and higher costs of labor, land and raw materials.

Add to that generally higher Federal Reserve interest rates and Horton and other housebuilders said last year they were having to offer more incentives to potential buyers of more expensive homes.

A dip in expectations for further moves by the Fed at the end of 2018, however, has pulled 30-year mortgage rates down from multi-year highs, of above 5 percent, and homebuilders are hopeful that moderation will help restore growth.

Analysts also say that Horton’s focus on lower-priced houses for first-time buyers gives it an advantage over others.

“We will see how it turns out for other builders, but so far I think D.R. Horton might be one of the only homebuilders that shows year-over-year increase in new orders,” Morningstar analyst Brian Bernard said.

REBOUND

Earlier this month, Lennar Corp said it was seeing improvement in buyer traffic in the first quarter as interest rates begin to ease.

D.R. Horton said 2019 revenue and profit margins will be determined by the strength of the upcoming spring season, and did not provide a forecast for the full year.

The impact of the partial government shutdown has been relatively minimal on business, the company said, in line with comments this week from the National Association of Realtors, which said the shutdown had so far not had an impact on home sales, but warned that this could change.

Horton’s orders, an indicator of future revenue, rose only 2.7 percent to 11,042 homes in the quarter ended Dec. 31, the slowest in more than five years.

Net income attributable to the company rose 51.7 percent to $287.2 million, or 76 cents per share, in the reported quarter, missing analysts’ estimates of 78 cents per share, according to IBES data from Refinitiv.

Revenue rose 5.6 percent to $3.52 billion, slightly above estimates of $3.51 billion.