Positive momentum carried through the third quarter for Dream Finders Homes despite the challenging operating environment. The home builder, No. 14 on the 2023 BUILDER 100 list, recorded revenue growth of 14% to $894 million in the third quarter.
Dream Finders Homes also reported profits of $76.1 million, or $0.75 per diluted share, an increase of 9% on a year-over-year basis. Profits per share beat analyst expectations by approximately $0.15 in the third quarter.
“Our performance in a difficult interest rate environment reflects our ability to generate sales and successfully deliver on our growth strategy,” Patrick Zalupski, Dream Finders Homes chairman and CEO, said. “We continue to focus on managing construction times and increasing inventory turnover.”
The home builder closed 1,798 homes in the quarter, a 17% increase compared with the third quarter of 2022. The average sales price of homes closed in the third quarter increased 3% to $501,536.
Net new orders increased 38% on a year-over-year basis to 1,535 homes. Dream Finders Homes reported a cancellation rate in the third quarter of 14.9%, an improvement of 1060 basis points compared with 25.5% in 2022. The company said despite mortgage rates remaining elevated from August through the end of the third quarter, net new orders and cancellation rate have improved for Dream Finders Homes, a reflection of its “flexible sales incentives, targeted mortgage buydown programs, and availability of affordable quick move-in homes.”
“Although uncertainty remains for the remainder of 2023 and beyond, we have set ourselves up for another successful year and have increased guidance to approximately 6,750 closings for the fiscal year,” Zalupski said.
At the end of the quarter, Dream Finders Homes had a backlog of 5,025 homes valued at $2.4 billion, compared with a backlog of 5,479 homes valued at $2.5 billion at the end of the second quarter of 2023. The average sales price of homes in backlog was $479,638 at the end of the quarter. Dream Finders Homes projects approximately 3,177 of the homes in backlog will be delivered in 2024 and beyond.
