High-level takeaways from the second quarter earnings results of LGI Homes, Smith Douglas Homes, and United Homes Group were in line with their public peers during the earning period.
Economic uncertainty and high interest rates are weighing down consumer confidence and contributing to challenging market conditions. As a result, many builders are utilizing price cuts or other incentives to help entice hesitant buyers off the sidelines.
For United Homes Group, the second quarter earnings results are the first financial report since the public builder’s board of directors appointed a special committee and initiated a review of strategic alternatives to maximize shareholder value. In May, the company announced a review would include a range of potential alternatives, including a sale, and was made at the same time Jack Micenko was appointed as the builder’s third CEO since going public in 2023. In its second quarter results, United Homes said the review process is ongoing and “no assurances can be given as to the outcome of timing of the board’s process.”Â
Second Quarter By the Numbers
- LGI Homes: Home sales revenue decreased to $483.5 million in the second quarter from $602.5 million in the same period a year ago. Home closings in the period declined to 1,323 from 1,655 a year ago. Average sales price increased marginally to $365,446 from $364,047 in the second quarter of 2024. LGI reported a profit of $31.5 million, or $1.36 per share, in the period, down from $58.6 million, or $2.48 per share, in the same period a year ago.
- Smith Douglas Homes: Net new home orders increased 2.9% in the fiscal second quarter of 736. Home closings increased 2% to 669 in the quarter, driving home closing revenue growth of 1% to $223.9 million. The builder generated second quarter pre-tax profit of $17.2 million, or $0.26 per share, compared to pre-tax profit of $25.9 million, or $0.40 per share, in the second quarter of 2024. Additionally, Smith Douglas Homes announced plans to enter the Dallas-Fort Worth and Gulf Coast markets through greenfield expansions. The builder expects to close on its first lots and begin selling in Dallas by year-end; the company is targeting community openings in the Gulf Coast area of southern Alabama by the second half of 2026.
- United Homes Group: Net new home orders decreased 6% on a year-over-year basis to 304 in the second quarter of 2025. The builder reported 303 home closings in the period, a decline of 10% compared to the prior year period. Home closing revenue decreased 4% to $105.5 million in the period. United Homes Group generated a loss of $6.3 million, or $0.11 per share, compared to a profit of $28.6 million, or $0.50 per share, in the second quarter of 2024.
What They’re Saying
Although demand for homeownership during the quarter was resilient, affordability challenges tied to interest rates and broader economic uncertainty dampened some buyers’ willingness to transact, resulting in a sequential decline in our second quarter net orders. However, we are encouraged by recent trends in late June and throughout July, which point to an improved sales environment in the third quarter… In today’s market, our spec-focused business model makes visibility into the fourth quarter a challenge. As a result, we are withdrawing our full year 2025 guidance and providing guidance only for the third quarter of 2025.” — Eric Lipar, chairman and CEO, LGI Homes
“We experienced inconsistent demand trends during the quarter with stretches of solid order activity followed by periods of softness. While we believe there’s a strong desire and need for new homes in our markets, affordability constraints, declining consumer confidence, and lack of urgency from buyers continue to be a headwind for our industry. As a result, we remain intensely focused on operating elements that are within our control, which include making our homes as affordable as possible while giving our buyers the choice and customization they desire.” — Greg Bennett, vice chairman and CEO, Smith Douglas Homes
“Overall, I am pleased with our company’s performance this quarter as we continue to navigate changing market conditions. Demand trends within the quarter were inconsistent as home buyers continue to weigh their desire for homeownership against the reality of high mortgage rates and concerns over affordability. On a positive note, we saw fairly resilient traffic numbers through the quarter which we feel is a sign that buyers in our markets remain engaged and interested in buying a home provided it fits within their budget. We continue to offer mortgage rate buydowns and other financial incentives as a way to address affordability concerns with our buyers.” — Jack Micenko, CEO and president, United Homes Group
