What 5 Public Builder CEOs Are Saying About Demand, Incentives

Public home builders remained challenged by choppy market conditions during the second quarter. After a slower than typical spring selling season, builders in the second quarter again cited challenging selling conditions, weekend consumer confidence, and elevated interest rates as hurdles in the current operating environment. 

D.R. Horton and PulteGroup kicked off the series of earnings reports for the week of July 21, with both highlighting the role incentives will continue to play in the new-home market. Six additional public companies—NVR, Meritage Homes, Taylor Morrison, Century Communities, M/I Homes, and Tri Pointe Homes—reported quarterly results, sharing similar sentiments. 

Taylor Morrison CEO Sheryl Palmer noted that incentives are shifting consumer preferences toward spec homes, even among the typical to-be-built customer segments. Meritage Homes noted the 5% decrease in average sales price on orders and 6% decrease in average sales price on closings in the quarter were largely due to the increased utilization of financing incentives in the period. 

Second Quarter By the Numbers 

• NVR: Net new orders decreased 11% year over year to 5,379 units; closings decreased 3% to 5,475 units and closing revenue remained flat at $2.55 billion. The quarterly cancellation rate was 17%, up 40 basis points from the same period in 2024. 
• Meritage Homes: Net orders increased 3% year over year to 3,914, driven by a 7% increase in average community count, partially offset by a 4% decrease in absorption pace. Closing revenue declined 5% to $1.6 billion while closing volume increased 1% to 4,170. 
• Taylor Morrison: Net sales orders fell 12% to 2,733 while the cancellation rate increased to 14.6% from 9.4% a year ago. Closing revenue and closing volume increased 2% and 4% to $2.0 billion and 3,340, respectively. 
• Century Communities: Net new contracts fell 8.4% to 2,546 in the second quarter. Closings revenue and volume fell 4% and 1.1% to $976.5 million and 2,587, respectively.
• M/I Homes: New contracts decreased 8% to 2,078 with a cancellation rate of 13%. Closings increased 6% to a second-quarter record 2,348 homes while closing revenue increased 5% to $1.2 billion. 
• Tri Pointe Homes: Net new orders declined 31.5% to 1,131. Closing revenue declined to $879.8 million compared to $1.1 billion a year ago; closing volume fell to 1,326 homes from 1,700 homes in the second quarter of 2024.  

What They’re Saying 

“We can pull various levers at the local level to ensure we optimize every asset. Our operations and cost structure are more efficient when we are building, selling, and closing at a consistent pace of four net sales per month. We know that these savings and efficiencies can be used to offset the impact of increased incentives that are currently being offered to achieve the target. Home building is a local business and we look to balance pace and price on a community-by-community basis to ensure we are maximizing our financial performance.” — Phillippe Lord, CEO, Meritage Homes 

“The prevalence and depth of incentives has shifted consumer preferences even among traditionally to-be-built customers toward spec homes as some are willing to trade personalization for deeper incentives currently available for spec inventory across the industry. As a result, our share of spec sales increased in the second quarter to a new high of 71%, including a higher-than-typical 50% in our Esplande segment.” — Sheryl Palmer, CEO and chairman, Taylor Morrison

“While we saw improvement in our order activity as the second quarter progressed, buyers are still cautious and hesitant, and as expected, our incentives increased in the second quarter as we look to maintain an appropriate sales base… while the spring selling was clearly muted compared to historical trends, we continue to believe there is underlying demand for affordable new homes supported by solid demographic trends.” — Dale Francescon, executive chairman, Century Communities 

“Throughout this year, we have strategically and effectively used mortgage rate buydowns to drive traffic and incent sales. Though such buydowns have impacted profitability and margins, they have been most successful as we strive to balance price and pace across our 234 communities.” — Robert Schottenstein, CEO and president, M/I Homes 

“By leveraging targeted incentives for design studio options and mortgage rate buydowns, we are addressing monthly payment sensitivity and buyer preference for home personalization, with the goal of optimizing margins… while near-term conditions remain challenging, we are executing through a differentiated premium product offering, targeted incentives, and continued focus on cost discipline and cycle time improvements.” — Doug Bauer, CEO, Tri Pointe Homes