Challenging housing market conditions persisted during the fiscal third quarter for Century Communities, M/I Homes, and Tri Pointe Homes. Mortgage rate relief during the period did not significantly reactivate demand, suggesting overall economic uncertainty is still a headwind weighing down consumer confidence and housing demand.
Incentives such as mortgage rate buydowns continue to play a large role in the sales process for builders and are expected to remain necessary through at least the end of the fiscal year. Given the muted demand conditions, many builders are scaling back starts activity to better align with sales and are adjusting land acquisition strategies to align with current market conditions.
Third Quarter By the Numbers
- Century Communities: Home sales revenue declined to $980.3 million from $1.1 billion in the same period a year ago. Home closings declined 12.3% to 2,486 in the third quarter and the average sales price of deliveries fell 2.4% to $384,200. The builder reported profit of $37.4 million in the third quarter, or $1.25 per share, down from $83.0 million, or $2.59 per share, in the third quarter of 2024. Century Communities ended the period with 62,239 lots, of which 58.6% were owned. A year ago, the mix of owned to controlled lots for Century Communities was 44.5-55.5.
- M/I Homes: Sales revenue declined 1% to $1.1 billion in the third quarter while deliveries increased 1% to a third quarter record of 2,296 homes. New contracts totaled 1,908 homes in the third quarter, down from 2,023 homes in the third quarter of 2024. M/I Homes generated a profit of $106.5 million, or $3.92 per share, down from $145 million, or $5.10 per share, from the same period a year ago. The builder ended the period with 50,625 total lots, of which 48% were owned.
- Tri Pointe Homes: Home sales revenue declined to $817.3 million in the third quarter from $1.1 billion in the same period a year ago. Home deliveries fell to 1,217 from 1,619 in the third quarter of 2024 while the average sales price of deliveries fell to $672,000 from $688,000. Net new home orders in the third quarter were 995, down from 1,252 homes in the third quarter of 2024. Tri Pointe Homes reported profit of $56.1 million, or $0.64 per share, down from $111.8 million, or $1.18 per share, in the same period a year ago. In the third quarter, Tri Pointe Homes opened its first two communities in Utah.
What They’re Saying
“While homebuyer demand has been more muted this year due to weaker consumer confidence, we continue to believe there is pent-up demand for affordable new homes supported by solid demographic trends. Buyers remain hesitant and cautious given the current level of economic uncertainty but still have the desire to own a new home… We currently hold top 10 positions in 13 of the 50 largest U.S. markets, with a goal of further increasing this penetration. We have also continue to invest in people, processes, and systems that will drive top and bottom-line improvements going forward.” — Dale Francescon, executive chairman, Century Communities
“In our view, housing conditions are just okay. Probably about a C+. We continue to incentivize sales and drive traffic primarily with mortgage rate buydowns. The cost of such buydowns is the primary reason for the decline in our gross margins. We will continue to use such rate buydowns where necessary on a subdivision-by-subdivision basis in order to drive traffic and generate sales… We feel very good about all 17 of our markets. That said, we are expecting particularly strong full-year results in Columbus, Chicago, Dallas, Minneapolis, Cincinnati, Orlando, and Charlotte.” — Robert Schottenstein, CEO and president, M/I Homes
“Market conditions remained soft throughout the third quarter. Homebuyer interest remained somewhat muted, with lower confidence driven by slow job growth and broader economic uncertainty. However, we continue to see underlying demand for homeownership among needs-based buyers. We anticipate that home shoppers are preparing to re-engage when conditions stabilize, leading to more normalized absorptions… In the short term, we are prioritizing inventory management, disciplined cost control, and sale of move-in ready homes while steadily increasing the mix of to-be-built homes over time.” — Doug Bauer, CEO, Tri Pointe Homes
