Public builders saw little shift in the housing market during the third quarter, as soft consumer confidence kept demand subdued and elevated incentives remained key to attracting hesitant buyers.
The third quarter results of NVR, Meritage Homes, Dream Finders Homes, and Green Brick Partners echoed many of the same themes from earnings reports covering the same period. Public builders, including D.R. Horton, PulteGroup, and Taylor Morrison, have noted affordability challenges and sidelined buyers are significant headwinds for the housing industry. Additionally, Meritage Homes CEO Phillippe Lord commented that recent mortgage rate declines are not moving the needle on demand, with incentives remaining a key element of shifting buyer psychology.
Despite the market challenges, strategies ranging from Meritage Homes’ 100% spec, quick move-in approach to Green Brick Partners’ infill-focused land self-development strategy are providing optimism for the near-term future. Dream Finders Homes noted its low cancellation rate of 12.5% is a direct reflection of its sales strategies and the availability of affordable product in its operating markets.
Builders continue to right-size their land pipeline and starts cadence to better align with demand, but note that margin compression due to incentives in some cases is being offset by improvements in material costs and build cycle times.
Third Quarter By the Numbers
- NVR: The No. 4 company on the 2025 Builder 100 list generated homebuilding revenues of $2.56 billion in the third quarter on 5,639 deliveries, down 4% and 5% from the same period a year ago, respectively. Net new orders in the quarter decreased by 16% to 4,735 on an average sales price of $464,800. The builder’s cancellation rate ticked up to 19% from 15% in the third quarter of 2024. NVR generated a third quarter profit of $342.7 million, or $112.33 per share. While these results were 20% and 14% lower than a year ago, respectively, the results bested Wall Street projections for NVR in the third quarter.
- Meritage Homes: The fifth largest company on the Builder 100 list generated home sales revenue of $1.4 billion on 3,685 closings. The 12% decline in revenue compared to the third quarter of 2024 was driven by a 7% lower closing volume and a 5%, incentive-driven decrease in average sales price to $380,000. The builder generated 3,636 orders in the period, a 4% increase from the prior-year period, driven by a 14% increase in average community count. Meritage Homes ended the period with 1,699 homes in backlog and a total lot pipeline of 80,800. Profit declined 49% to $99 million, or $1.39 per share, and significantly underperformed Wall Street profit per share projections of $1.71.
- Dream Finders Homes: Dream Finders Homes generated homebuilding revenue of $917 million on a third quarter record 1,915 closings in the period. Revenue declined 7% compared to the third quarter of 2024 due to changes in geographic product mix and incentive-driven declines in average selling prices while closings increased marginally by 1%. Net new orders in the period increased 20% to 2,021 with a cancellation rate of 12.5%. The No. 14 builder on the Builder 100 list ended the period with 2,619 homes in backlog and a pipeline of 64,341 lots. Dream Finders Homes generated a third quarter profit of $47 million, or $0.47 per share, down from $71 million, or $0.72 per share, last year. The results missed analyst projections by approximately $0.03 per share.
- Green Brick Partners: The company generated home closings revenue of $499 million in the third quarter on 953 deliveries, both metrics are the second-highest in any third quarter for Green Brick Partners. Revenue declined 4.7% from the third quarter of 2024 while deliveries were marginally lower by 0.3%. Net new orders increased 2.4% to a third quarter record of 898 while the average sales price or orders declined 3.6% to $499,400. The builder ended the quarter with 675 units in backlog and a total lot pipeline of 41,186. Green Brick Partners reported a third quarter profit of $78 million, or $1.77 per share. While both metrics were down on a year over year basis, the results significantly bested Wall Street profit per share forecasts of $1.43.
What They’re Saying
“We were encouraged by the Fed’s rate cut in Q3. However, the recent trend in lower mortgage rates has not translated to a notable improvement in the demand or a reduction in the use of incentives thus far due to the lack of consumer confidence. Throughout the quarter, our customers were feeling less optimistic about the economy, the cost of living, and employment, which increased hesitancy around a home purchase decision. We believe the biggest impediment to an improved housing market relates to buyer psychology. We continue to lean into our full range of possible incentives on a customer-by-customer basis. Even though we anticipate the incentive burden to continue running far north of where we typically are as an industry for the future, we do expect the cost and utilization rate of incentives to begin to taper off as market conditions stabilize.” — Phillippe Lord, CEO, Meritage Homes
“While revenue was lower year over year, we were able to achieve a modest increase in home closings, along with a meaningful rise in net sales, both of which are third quarter company records. We continue to see a complex and challenging housing environment, though we are encouraged by the recent easing on mortgage rates… While we see continued near-term challenges affecting the housing market, we remain confident that we have built the foundation to further scale our business and continue to deliver superior, long-term returns for our shareholders.” — Patrick Zalupski, CEO, Dream Finders Homes
“I am pleased to announce our third quarter results, particularly given we achieved these results against a backdrop of ongoing and persistent affordability challenges faced by many consumers. Our performance remained resilient despite eroding consumer confidence and an increasing supply of housing inventory. Our builders adapted quickly to a volatile housing market as we continued to balance price and pace to maximize returns in each of our communities. Driving our sales volume required price concessions and other incentives as we addressed the affordability challenges faced by buyers in our markets.” — Jim Brickman, CEO and co-founder, Green Brick Partners
