Difficult market conditions contributed to double-digit year-over-year declines in home closings and revenue in the third quarter for United Homes Group. The builder also posted a loss in the third quarter for a second year.
The challenging third quarter results for the South Carolina-based public builder come weeks after six board members announced plans to resign. Five board members—Robert Dozier, Jason Enoch, Alan Levin, former U.S. Ambassador Nikki Haley, and former interim CEO James Pirrello—intend to resign effective Nov. 14. Former director James Clements resigned from the board at the end of October.
The resignations coincided with a strategic review of United Homes Group’s business that decided a “business as usual” approach for the builder was the best path forward as opposed to a sale or merger with another builder. Dozier, Enoch, Levin, and Pirrello indicated they would be willing to remain on the board if executive chairman Michael Nieri stepped down from his position and agreed to forgo any remaining compensation. However, Nieri declined to comply with these conditions.
“We are taking steps to identify and appoint new independent directors in a timely manner to maintain compliance with our Nasdaq listing requirements,” CEO and president Micenko told investors during the builder’s earnings call. “A transition of this nature can understandably raise questions. I want to highlight that in their resignation letters, the parting directors expressed their views on governance and structure while also noting the capability of the company’s current management team to address the market environment and operational challenges.“
According to the United Homes Group earnings release, if the builder is unable to successfully appoint new directors in a timely manner, the management team expects pressure from lenders, land banking partners, insurers and other key relationships, which “could have an adverse effect on the company’s operations.”
Quarterly Results
In addition to soft demand conditions and weak consumer confidence, the necessity of sales incentives also weighed on results in the third quarter for United Homes Group. The use of incentives drove down the builder’s margin by over 100 basis points. Additionally, net new orders decreased compared to the same period a year ago.
“United Homes Group’s third quarter results reflect the affordability challenges and overall market conditions impacting the broader homebuilding industry,” said Micenko. “While demand was soft earlier in the quarter due to delays in new community openings, we saw sequential improvement as the quarter progressed.”
The builder reported revenue of $90.8 million on 262 closings in the third quarter, down from revenue of $118.6 million on 324 closings in the same period a year ago. Net new orders during the period declined 5% to 324 while the average sales price of homes closed increased 8.1% to $346,000.
Micenko noted September was the builder’s best order month year-to-date, indicating a more positive near-term outlook for United Homes Group.
“Traffic also improved meaningfully, averaging between 350 and 400 weekly visits during the third quarter compared to around 200 per week in the first half of the year,” said Micenko. “The increase in buyer engagement is an encouraging leading indicator, especially as we continue to expand our community portfolio.”
The builder’s gross margin declined 120 basis points in the quarter to 17.7%, impacted by the necessity of incentives to aid sales in the current environment.
“Gross margins for the third quarter were impacted by more aggressive discounting of inventory, which offset some of the benefits of our new product refresh and ongoing direct cost reduction efforts,” chief financial officer Keith Feldman said. “While these headwinds pressure margins in the third quarter 2025, we remained focused on driving operational efficiencies and maintaining a disciplined approach to pricing and incentives.”
Micenko noted efforts to right-size the business, including targeted headcount reductions, are positioning United Homes Group to better navigate the current market while maintaining the capacity to drive growth.
The builder ended the period with a pipeline of approximately 7,700 lots owned or controlled and approximately 264 homes in backlog.
Due in part to market conditions, United Homes Group reported a loss of $31.3 million, or $0.53 per share, in the third quarter which “included a loss from the change in fair value of derivative liabilities of $27.2 million, with that change predominantly due to changes in fair value on potential earn-out consideration and warrants due to fluctuation in the stock price and warrant price during the measurement period, representing a non-cash item.”
. In the third quarter a year ago, United Homes Group reported a net loss of $7.3 million, or $0.15 per share.
