M/I HOMES, INC.
For the period ended Sep 30, 2025. Filed Oct 24, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 24, 2025
MHO$131.60-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-25.
0000799292-25-000059
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-24.
0000799292-25-000077
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 143 previous paragraphs and 150 current paragraphs.
64 unchanged; 71 reworded; 11 added; 6 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
During the first nine months of 2025, the housing market continued to face significant pressure due to persistent macroeconomic challenges, including elevated mortgage interest rates, rising lot costs, limited affordable housing availability, and overall economic uncertainty. To stimulate demand, we implemented various affordability strategies, including sales incentives and mortgage rate buydowns for homebuyers. Although we saw increased traffic in the third quarter compared to the prior year, the urgency of buyers to purchase a home remained subdued. Interest rates declined slightly following the Federal Reserve’s 25 basis point rate cut late in the third quarter, but the impact on demand was minimal. Despite these headwinds, we achieved a third-quarter record for homes delivered. However, profitability was negatively affected compared to the prior year by the cost of incentives and rate buydowns offered.
Current report
Due to ongoing market and economic uncertainty, we recorded during the third quarter of 2025 $6.0 million of inventory impairment charges and $1.6 million of write-offs of land deposits for land we no longer intend to acquire as part of our efforts to optimize our land portfolio.
Current report
Although our performance in the first nine months of 2025 did not match the record levels achieved in 2024, it remained consistent with our expectations. Key comparisons between the third quarter and first nine months of 2025 and 2024 are as follows:
Current report
We continue to believe that the long-term fundamentals of the housing market are strong and supported by favorable demographic trends, rising household formations, and a persistent undersupply of both new and resale homes. We are also encouraged by emerging signs that mortgage rates could move closer to six percent, which we believe would meaningfully improve affordability and reignite buyer activity. In addition, the Federal Housing Financing Authority’s decision to expand approved credit scoring models to include VantageScore 4.0, which recognizes rent and utility payment histories, may also broaden access to homeownership.
Current report
(b)Total cost of sales and total operating income were reduced by $7.6 million of inventory impairment charges and land deposit write-offs taken during the quarter ended September 30, 2025. $1.3 million and $6.3 million of these charges and write-offs were attributed to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively.
Current report
(b)Includes $7.6 million of inventory impairment charges and land deposit write-offs taken during the quarter ended September 30, 2025.
Current report
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Current report
Selling, general and administrative expense increased $0.4 million, from $100.2 million for the nine months ended September 30, 2024 to $100.6 million for the nine months ended September 30, 2025, and was consistent as a percentage of revenue at 7.3% in both the nine months ending September 30, 2025 and 2024. The increase in selling, general and administrative expense was also attributable to a $0.4 million increase in general and administrative expense, which was primarily related to $1.8 million increase in compensation-related expenses offset in part by a $1.4 million decrease in land-related expenses. The increase in selling expenses related to sales offices, including compensation, partially offset by a reduction in sales and realtor commissions.
Current report
Homebuilding Credit Facility. On September 18, 2025, the Company entered into an amendment to the Credit Facility which, among other things, (1) increased the commitments from lenders to $900 million, (2) extended the maturity to September 18, 2030, (3) increased the accordion feature pursuant to which the maximum borrowing availability may be increased to an aggregate of $1.05 billion, subject to obtaining additional commitments from lenders, (4) decreased the SOFR margin to 150 basis points from 175 basis points (subject to adjustment in subsequent quarterly periods based on the Company’s then applicable leverage ratio), (5) decreased the commitment fee paid quarterly by the Company on the remaining available commitment amount by 5 basis points to 25 basis points (subject to adjustment in subsequent quarterly periods based on the Company’s then applicable leverage ratio) and (6) increased the borrowing base advance rates for certain categories of inventory used to calculate the available amount under the Credit Facility.
Current report
MIF Master Repurchase Agreement. M/I Financial entered into a new mortgage repurchase agreement (“MIF Master Repurchase Agreement”), which provides for an uncommitted maximum borrowing availability of $100 million and expires on October 20, 2026 or upon agent demand with a 30 day notice. The MIF Master Repurchase Agreement is used to finance eligible residential mortgage loans originated by M/I Financial. M/I Financial pays interest on each advance under the MIF Master Repurchase Agreement at a per annum rate based on Daily Simple SOFR plus a margin as defined in the repurchase agreement. The MIF Master Repurchase Agreement contains the same financial covenants as the MIF Mortgage Repurchase Facility, each of which is defined in the MIF Mortgage Repurchase Facility.
Current report
As of the date of this report, M/I Financial’s total combined maximum borrowing availability under the MIF Mortgage Repurchase Facility and MIF Master Repurchase Agreement was $300 million.
Removed paragraphs (6)
Previous report
During the first half of 2025, housing market conditions continued to experience headwinds from challenging macroeconomic conditions, including elevated mortgage interest rates, higher lot costs, limited availability of affordable housing and general economic uncertainty. Due to these uncertainties, we have experienced a decline in buyer urgency despite an increase in traffic. To address affordability and spur demand, we offered various sales incentives and mortgage interest rate buydowns to homebuyers which negatively impacted our profitability despite achieving a second quarter record for homes delivered. Against this backdrop, our performance in the second quarter and the first half of 2025 fell short of the record levels achieved in 2024 but remained generally in line with our expectations. Our results during the second quarter and first half of 2025 in comparison to the second quarter and first half of 2024 were as follows:
Previous report
Although we do not believe that tariffs announced by the U.S. and other countries in the first quarter affected our costs during the first half of 2025, we continue to closely monitor the potential impacts of tariffs on our supply chain. In addition, we did not experience any labor disruptions related to immigration enforcement during the first half of 2025. We believe the long-term fundamentals of the housing market remain strong, supported by favorable demographic trends, increasing household formations, and a continued undersupply of both new and resale homes.
Previous report
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Previous report
Selling, general and administrative expense increased $0.7 million, from $64.9 million for the six months ended June 30, 2024 to $65.6 million for the six months ended June 30, 2025, and declined 10 basis points as a percentage of revenue to 7.3% in 2025's second quarter from 7.4% in 2024's second quarter. The increase in selling, general and administrative expense was attributable to a $0.4 million increase in selling expense, primarily attributable to a $1.1 million increase in costs associated with our sales offices and models offset in part by a $0.7 million decrease in sales and realtor commissions. The increase in selling, general and administrative expense was also attributable to a $0.3 million increase in general and administrative expense, which was primarily related to computer related expenses and other miscellaneous expenses.
Previous report
As is typical for similar credit facilities in the mortgage origination industry, at closing, the expiration of the MIF Mortgage Repurchase Facility was set at approximately one year and is under consideration for extension annually by the participating lenders. We expect to extend the MIF Mortgage Repurchase Facility on or prior to the current expiration date of October 21, 2025, but we cannot provide any assurance that we will be able to obtain such an extension.
Previous report
Universal Shelf Registration. In June 2022, the Company filed a universal shelf registration statement with the SEC, which registration statement became effective upon filing and expired in June 2025.
Reworded paragraphs (71)
Previous wording
M/I Homes, Inc. and subsidiaries (the “Company” or “we”) is one of the nation’s leading builders of single-family homes having sold over 164,300 homes since commencing homebuilding activities in 1976. The Company’s homes are marketed and sold primarily under the M/I Homes brand. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Ft. Myers/Naples, Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and Nashville, Tennessee.
Current wording
M/I Homes, Inc. and subsidiaries (the “Company” or “we”) is one of the nation’s leading builders of single-family homes having sold over 166,200 homes since commencing homebuilding activities in 1976. The Company’s homes are marketed and sold primarily under the M/I Homes brand. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Ft. Myers/Naples, Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and Nashville, Tennessee.
Previous wording
•Revenue increased 5% to $1.16 billion (second quarter record) and decreased 1% to $2.14 billion, respectively
Current wording
•Revenue decreased 1% to $1.13 billion and decreased 1% to $3.27 billion, respectively
Previous wording
•Number of homes delivered increased 6% to 2,348 homes (second quarter record) and decreased 1% to 4,324 homes, respectively
Current wording
•Number of homes delivered increased 1% to 2,296 homes (third quarter record) and slightly decreased to 6,620 homes, respectively
Previous wording
•Income before income taxes decreased 18% to $160.1 million and decreased 18% to $306.2 million, respectively
Current wording
•Income before income taxes decreased 26% to $139.8 million and decreased 21% to $446.0 million, respectively
Previous wording
•Gross margins decreased 320 basis points to 24.7% and decreased 230 basis points to 25.2%, respectively
Current wording
•Gross margins decreased 320 basis points to 23.9% and decreased 250 basis points to 24.8%, respectively
Previous wording
•Net income decreased 17% to $121.2 million and decreased 18% to $232.5 million, respectively
Current wording
•Net income decreased 27% to $106.5 million and decreased 21% to $339.0 million, respectively
Previous wording
•New contracts decreased 8% to 2,078 from 2,255 and decreased 9% to 4,370 from 4,802, respectively
Current wording
•New contracts decreased 6% to 1,908 from 2,023 and decreased 8% to 6,278 from 6,825, respectively
Previous wording
•Shareholders’ equity of $3.1 billion (all time record), a 12% increase from a year ago, with book
Current wording
•Shareholders’ equity of $3.1 billion (all time record), an 11% increase from a year ago, with book
Previous wording
value per common share increasing to a record high $117 per share
Current wording
value per common share increasing to a record high $120 per share
Previous wording
In addition to the results described above, our financial services operations achieved a quarterly record for revenue and strong income before income taxes for the first half of 2025, benefiting from higher margins, improved capture rate and an increase in loans originated.
Current wording
Additionally, our financial services segment achieved a quarterly record for revenue and delivered strong income before taxes driven by higher margins, an improved capture rate and an increase in loan originations.
Previous wording
Our company-wide absorption pace of sales per community for the second quarter of 2025 declined to 3.0 per month compared to 3.5 per month for the prior year’s second quarter as a result of the macroeconomic conditions described above. We plan to open additional new communities during the remainder of 2025 and increase our average community count by about 5% from 2024.
Current wording
Our company-wide absorption pace of sales per community for the third quarter of 2025 declined to 2.7 per month compared to 3.2 per month for the prior year’s third quarter as a result of the macroeconomic conditions described above. We plan to open additional new communities during the remainder of 2025 and increase our average community count by about 5% from 2024.
Previous wording
Income before income taxes for the second quarter of 2025 decreased $34.0 million from $194.1 million in the second quarter of 2024 to $160.1 million in 2025. Net income was $121.2 million, or $4.42 per diluted share, in 2025's second quarter, compared to $146.7 million, or $5.12 per diluted share, in 2024's second quarter. Our effective tax rate was 24.3% in 2025’s second quarter compared to 24.4% in 2024. For the first half of 2025, income before income taxes decreased $68.2 million from $374.4 million in the first half of 2024 to $306.2 million in 2025. We achieved net income of $232.5 million, or $8.40 per diluted share, during the six months ended June 30, 2025 compared to net income of $284.8 million, or $9.90 per diluted share, in the six months ended June 30, 2024. Our effective tax rate was 24.1% in 2025's first half compared to 23.9% in the same period in 2024
Current wording
Income before income taxes for the third quarter of 2025 decreased $48.9 million from $188.7 million in the third quarter of 2024 to $139.8 million in 2025. Net income was $106.5 million, or $3.92 per diluted share, in 2025's third quarter, compared to $145.4 million, or $5.10 per diluted share, in 2024's third quarter. Our effective tax rate was 23.8% in 2025’s third quarter compared to 22.9% in 2024. For the nine months ended September 30, 2025, income before income taxes decreased $117.0 million from $563.1 million in the nine months ended September 30, 2024 to $446.0 million in 2025. We achieved net income of $339.0 million, or $12.32 per diluted share, during the nine months ended September 30, 2025 compared to net income of $430.3 million, or $14.99 per diluted share, in the nine months ended September 30, 2024. Our effective tax rate was 24.0% in 2025's first nine months compared to 23.6% in the same period in 2024
Previous wording
During the quarter ended June 30, 2025, our total revenue was $1.16 billion, of which $1.13 billion was from homebuilding and $31.5 million was from our financial services operations. Revenue from homebuilding increased 5% in 2025's second quarter compared to the same period in 2024 driven primarily by a 6% increase in the number of homes delivered (124 units) offset in part by a 1% decrease in the average sales price of homes delivered ($3,000 per home delivered). Our revenue and average sales price reflect a $47.1 million reduction for incentives and closing costs in 2025’s second quarter compared to a $30.9 million reduction for incentives and closing costs in 2024’s second quarter. Revenue from our financial services segment increased 2% to $31.5 million in the second quarter of 2025 as a result of higher margins on loans sold, improved capture rate and an increase in loans originated during the period compared to the second quarter of 2024. For the first half of 2025, we recorded year-to-date total revenue of $2.14 billion, of which $2.06 billion was from homes delivered and $63.0 million was from our financial services operations. Revenue from homes delivered decreased 1% in the first half of 2025 compared to the same period in 2024 driven primarily by a 1% decrease in the number of homes delivered (58 units) partially offset by a slight increase in the average sales price of homes delivered ($1,000 per home delivered). Our revenue and average sales price reflect an $87.1 million reduction for incentives and closing costs in 2025’s first half compared to a $57.6 million reduction for incentives and closing costs in 2024’s first half. Revenue from our financial services segment increased 9% to $63.0 million in the first half of 2025 compared to the first half of 2024 as a result of an increase in the average loan amount, improved capture rate, higher margins on loans sold during the period and an increase in loans sold during the period.
Current wording
During the quarter ended September 30, 2025, our total revenue was $1.13 billion, of which $1.10 billion was from homebuilding and $34.6 million was from our financial services operations. Revenue from homebuilding decreased 1% in 2025's third quarter compared to the same period in 2024 driven primarily by a 2% decrease in the average sales price of homes delivered ($12,000 per home delivered) offset in part by a 1% increase in the number of homes delivered (25 units). Our revenue and average sales price reflect a $53.5 million reduction for incentives and closing costs in 2025’s third quarter compared to a $39.6 million reduction for incentives and closing costs in 2024’s third quarter. Revenue from our financial services segment increased 16% to $34.6 million in the third quarter of 2025 as a result of higher margins on loans sold, improved capture rate and an increase in loans originated during the period compared to the third quarter of 2024. For the nine months ended September 30, 2025, we recorded year-to-date total revenue of $3.27 billion, of which $3.16 billion was from homes delivered and $97.6 million was from our financial services operations. Revenue from homes delivered decreased 1% in the nine months ended September 30, 2025 compared to the same period in 2024 driven primarily by decreases in the number of homes delivered (33 units) and the average sales price of homes delivered ($4,000 per home delivered). Our revenue and average sales price reflect an $140.6 million reduction for incentives and closing costs in 2025’s first nine months compared to a $90.6 million reduction for incentives and closing costs in 2024’s first nine months. Revenue from our financial services segment increased 11% to $97.6 million in the first nine months of 2025 compared to the nine months ended September 30, 2024 as a result of an increase in the average loan amount, improved capture rate, higher margins on loans sold during the period and an increase in loans sold during the period.
Previous wording
Total gross margin (total revenue less total land and housing costs) decreased $22.7 million in the second quarter of 2025 compared to the second quarter of 2024 as a result of a $23.3 million decline in the gross margin of our homebuilding operations partially offset by a $0.7 million increase in the gross margin of our financial services operations. Our homebuilding gross margin percentage declined by 320 basis points to 22.6% in the second quarter of 2025 from 25.8% in the second quarter of 2025. The decline in gross margin dollars primarily resulted from the $16.7 million increase in lot costs and a $8.7 million increase in interest rate buydowns offered partially offset by a 6% increase in homes delivered in 2025 compared to 2024. Our homebuilding gross margin may fluctuate from quarter to quarter depending on the mix of communities delivering homes due to the variation in margin between different communities and incentives used to encourage demand due to market conditions. The gross margin of our financial services operations increased $0.7 million in the second quarter of 2025 compared to the second quarter of 2024 as a result of higher margins on loans sold, improved capture rate and an increase in the number of loan originations. Total gross margin decreased $53.2 million in the first half of 2025 compared to the same period in 2024 as a result of a $58.5 million decline in the gross margin of our homebuilding operations offset, in part, by a $5.3 million improvement in the gross margin of our financial services operations. This decrease in the gross margin of our homebuilding operations is primarily due to a 1% decrease in the number of homes delivered, a $33.6 million increase in lot costs and an $18.5 million increase in interest rate buydowns. The gross margin of our financial services operations increased $5.3 million in the first half of 2025 compared to the same period in 2024 as a result of higher margins on loans sold, an increased number of loans sold and an increase in the number of loan originations during the first half of 2025 compared to the first half of 2024.
Current wording
Total gross margin (total revenue less total land and housing costs) decreased $39.4 million in the third quarter of 2025 compared to the third quarter of 2024 as a result of a $44.0 million decline in the gross margin of our homebuilding operations partially offset by a $4.6 million increase in the gross margin of our financial services operations. Our homebuilding gross margin percentage declined by 360 basis points to 21.5% in the third quarter of 2025 from 25.1% in the third quarter of 2024. The decline in gross margin dollars primarily resulted from the decrease in average sales price of homes delivered, $18.7 million increase in lot costs and a $10.8 million increase in interest rate buydowns offered partially offset by a 1% increase in homes delivered in 2025 compared to 2024. Our homebuilding gross margin may fluctuate from quarter to quarter depending on the mix of communities delivering homes due to the variation in margin between different communities and incentives used to encourage demand due to market conditions. The gross margin of our financial services operations increased $4.6 million in the third quarter of 2025 compared to the third quarter of 2024 as a result of higher margins on loans sold, improved capture rate and an increase in the number of loan originations. Total gross margin decreased $92.6 million in the nine months ended September 30, 2025 compared to the same period in 2024 as a result of a $102.5 million decline in the gross margin of our homebuilding operations offset, in part, by a $9.9 million improvement in the gross margin of our financial services operations. This decrease in the gross margin of our homebuilding operations is primarily due to a decrease in the number of homes delivered, a $52.2 million increase in lot costs and a $35.9 million increase in interest rate buydowns. The gross margin of our financial services operations increased $9.9 million in the nine months ended September 30, 2025 compared to the same period in 2024 as a result of higher margins on loans sold, an increased number of loans sold and an increase in the number of loan originations during the first nine months of 2025 compared to the first nine months of 2024.
Previous wording
We opened 50 new communities during the first half of 2025 and closed 36 communities. We sell a variety of home types in various communities and markets, each of which yields a different gross margin. The timing of the openings of new replacement communities as well as underlying lot costs varies from year to year. The mix of communities delivering homes may cause fluctuations in our new contracts, absorption pace and housing gross margin from year to year.
Current wording
We opened 64 new communities during the nine months ended September 30, 2025 and closed 51 communities. We sell a variety of home types in various communities and markets, each of which yields a different gross margin. The timing of the openings of new replacement communities as well as underlying lot costs varies from year to year. The mix of communities delivering homes may cause fluctuations in our new contracts, absorption pace and housing gross margin from year to year.
Previous wording
For the three months ended June 30, 2025, selling, general and administrative expense increased $8.4 million, and increased as a percentage of revenue from 11.0% in the second quarter of 2024 to 11.3% in the second quarter of 2025. Selling expense increased $5.2 million from 2024's second quarter and increased as a percentage of revenue to 5.5% in 2025's second quarter from 5.3% for the same period in 2024. The dollar increase in selling expense related to a $4.2 million increase in sales and realtor commissions due to the increase in the homes delivered during the period compared to prior year and a $0.9 million increase in costs associated with our sales offices, including compensation-related expenses in the second quarter of 2025. General and administrative expense increased $3.3 million in the second quarter of 2025 compared to second quarter of 2024 and remained consistent as a percentage of revenue at 5.8% in both the second quarter of 2024 and the second quarter of 2025. The dollar increase in general and administrative expense was primarily due to a $1.3 million increase in compensation-related expenses, a $1.0 million increase in land related expenses, a $0.5 million increase in costs associated with information systems and a $0.5 million increase in miscellaneous expenses. For the six months ended June 30, 2025, selling, general and administrative expense increased $10.2 million, and increased as a percentage of revenue from 10.8% in the six months ended June 30, 2024 to 11.4% in the first six months of 2025. Selling expense increased $4.0 million from the first half of 2024 and increased as a percentage of revenue to 5.4% in 2025's first half from 5.2% for the same period in 2024. The dollar increase in selling expense in the second quarter of 2025 related to a $3.6 million increase in costs associated with our sales offices, including compensation-related and advertising expenses, and a $1.1 million increase in realtor commissions offset in part by a $0.7 million decrease in sales commissions. General and administrative expense increased $6.2 million compared to the first half of 2024 and increased as a percentage of revenue from 5.6% in the six months ended June 30, 2024 to 5.9% in the first six months of 2025. The increase in general and administrative expense was primarily due to a $3.5 million increase in compensation-related expenses due to higher average headcount and incentives, a $1.4 million increase in computer costs, a $1.2 million increase in land-related expenses, and a $0.1 million increase in various other expenses.
Current wording
For the three months ended September 30, 2025, selling, general and administrative expense increased $7.4 million, and increased as a percentage of revenue from 11.2% in the third quarter of 2024 to 11.9% in the third quarter of 2025. Selling expense increased $4.9 million from 2024's third quarter and increased as a percentage of revenue to 5.7% in 2025's third quarter from 5.2% for the same period in 2024. The dollar increase in selling expense related to a $3.1 million increase in realtor commissions and a $0.8 million increase in bonuses and sales commissions due to the increase in the homes delivered during the period compared to prior year and a $1.0 million increase in costs associated with our sales offices, including compensation-related expenses in the third quarter of 2025. General and administrative expense increased $2.5 million in the third quarter of 2025 compared to third quarter of 2024 and increased as a percentage of revenue to 6.3% in the third quarter of 2025 from 6.0% in the third quarter of 2024. The dollar increase in general and administrative expense was primarily due to a $0.9 million increase in compensation-related expenses due to increased head count, a $0.9 million increase in costs associated with information systems, a $0.4 million increase in land related expenses and a $0.3 million increase in miscellaneous expenses. For the nine months ended September 30, 2025, selling, general and administrative expense increased $17.6 million, and increased as a percentage of revenue from 10.9% in the nine months ended September 30, 2024 to 11.5% in the nine months ended September 30, 2025. Selling expense increased $8.9 million from the nine months ended September 30, 2024 and increased as a percentage of revenue to 5.5% in 2025's first nine months from 5.2% for the same period in 2024. The dollar increase in selling expense in the third quarter of 2025 related to a $5.1 million increase in costs associated with our sales offices, including compensation-related and advertising expenses, and a $4.3 million increase in realtor commissions offset in part by a $0.5 million decrease in sales commissions. General and administrative expense increased $8.7 million compared to the nine months ended September 30, 2024 and increased as a percentage of revenue from 5.7% in the nine months ended September 30, 2024 to 6.0% in the nine months ended September 30, 2025. The increase in general and administrative expense was primarily due to a $4.5 million increase in compensation-related expenses due to higher average headcount and equity incentives offset in part by bonus expense, a $2.3 million increase in costs associated with information systems, a $0.9 million increase in land-related expenses, and a $1.0 million increase in various other expenses.
Previous wording
We anticipate that the softer market conditions in the housing market during the first half of 2025 will persist throughout the remainder of the year. We believe that these conditions have weighed on consumer confidence and extended the homebuying decision timeline compared to recent years. In response to these conditions, we are controlling overhead, managing land investments and development expenditures prudently, maintaining pricing discipline, and offering targeted incentives to support overall affordability to support demand, drive order activity, and reduce cancellations. However, the impact that current housing market conditions (including the macroeconomic challenges, tariffs and labor considerations discussed above) will ultimately have on our business remains uncertain and unpredictable. As such, past performance should not be viewed as a reliable indicator of future results in the current housing market environment.
Current wording
The housing market continues to face persistent macroeconomic challenges including elevated mortgage interest rates, affordability concerns and general economic uncertainties such as tariffs, inflation, job security and recession concerns. Despite these pressures, we remain optimistic about the long-term outlook for our business. We expect the softer market conditions observed in the first nine months of 2025 to continue through the remainder of the year. These conditions have contributed to reduced consumer confidence and extended homebuying decision timelines compared to recent years. In response, we are taking proactive measures, including controlling overhead, managing land investments and development expenditures prudently, maintaining pricing discipline, and offering targeted incentives including mortgage interest rate buydowns, to support affordability, stimulate demand, drive order activity, and reduce cancellations.
Previous wording
Despite these challenges, we believe we are well-positioned to navigate this period of uncertainty. Our backlog remains healthy—though lower than the prior year—with an average sales price 4% higher than at the end of the first half of 2024. We also believe that our strong balance sheet and ample liquidity provide us with the flexibility to respond effectively to evolving market conditions. Nevertheless, we recognize that continued success will require agility, and we cannot guarantee that our strategic objectives will remain effective as housing market conditions evolve.
Current wording
We believe we are well-positioned to navigate this period of uncertainty. Our backlog remains healthy—though lower than the prior year—with an average sales price 2% higher than at the end of the third quarter of 2024. We also believe our strong balance sheet and ample liquidity provide us with the flexibility to respond effectively to changing market conditions. Nonetheless, we recognize that continued success will require agility, and we cannot guarantee that our current strategies will remain effective as the housing market continues to evolve.
Previous wording
During the first six months of 2025, we invested $247.7 million in land acquisitions and $240.6 million in land development compared to $226.8 million and $263.9 million, respectively, during the first six months of 2024. We invested in more land acquisitions in the first half of 2025 compared to the first half of 2024 as a result of the land supply needs of our divisions. We continue to closely review our land acquisition and land development spending and monitor our ongoing pace of home sales and deliveries, and we will adjust our land and investment spend accordingly.
Current wording
During the nine months ended September 30, 2025, we invested$363.1 million in land acquisitions and$421.9 million in land development compared to $365.6 million and $444.7 million, respectively, during the nine months ended September 30, 2024. We invested in fewer land acquisitions in the nine months ended September 30, 2025 compared to the first nine months of 2024 as a result of the land supply needs of our divisions. We continue to closely review our land acquisition and land development spending and monitor our ongoing pace of home sales and deliveries, and we will adjust our land acquisition and development spend accordingly.
Previous wording
We ended the second quarter of 2025 with approximately 50,500 lots under control, which represents an approximately six-year supply of lots based on the past twelve months of homes delivered, including certain lots that we anticipate selling to third parties. This represents an 2% increase from our approximately 49,500 lots under control at the end of last year’s second quarter.
Current wording
We ended the third quarter of 2025 with approximately 50,600 lots under control, which represents an approximately six-year supply of lots based on the past twelve months of homes delivered, including certain lots that we anticipate selling to third parties. This represents a 3% decrease from our approximately 52,200 lots under control at the end of last year’s third quarter.
Previous wording
We opened 50 communities and closed 36 communities in the first half of 2025, ending the second quarter with 234 active communities, compared to 211 at the end of last year’s second quarter. Although the timing of opening new communities and closing existing communities is subject to substantial variation, we expect to grow our average community count by approximately 5% by the end of 2025.
Current wording
We opened 64 communities and closed 51 communities in the nine months ended September 30, 2025, ending the third quarter with 233 active communities, compared to 217 at the end of last year’s third quarter. Although the timing of opening new communities and closing existing communities is subject to substantial variation, we expect to grow our average community count by approximately 5% in 2025 compared to 2024.
Previous wording
The following table shows, by segment: revenue; cost of sales; selling, general and administrative expense; operating income; and interest (income) expense - net for the three and six months ended June 30, 2025 and 2024:
Current wording
The following table shows, by segment: revenue; cost of sales; selling, general and administrative expense; operating income; and interest (income) expense - net for the three and nine months ended September 30, 2025 and 2024:
Previous wording
The following table presents, by reportable segment, selected operating and financial information as of and for the three and six months ended June 30, 2025 and 2024:
Current wording
The following table presents, by reportable segment, selected operating and financial information as of and for the three and nine months ended September 30, 2025 and 2024:
Previous wording
The following table sets forth the cancellation rates for each of our homebuilding segments for the three and six months ended June 30, 2025 and 2024:
Current wording
The following table sets forth the cancellation rates for each of our homebuilding segments for the three and nine months ended September 30, 2025 and 2024:
Previous wording
Typically, our homebuilding operations experience significant seasonality and quarter-to-quarter variability in homebuilding activity levels. In general, homes delivered increase in the second half of the year compared to the first half of the year. We believe that this seasonality reflects the tendency of homebuyers to shop for a new home in the spring with the goal of closing in the fall or winter, as well as the scheduling of construction to accommodate seasonal weather conditions. Our financial services operations also experience seasonality because loan originations correspond with the delivery of homes in our homebuilding operations.
Current wording
Typically, our homebuilding operations experience significant seasonality and quarter-to-quarter variability in homebuilding activity levels. In general, homes delivered increase in the second half of the year compared to the first half of the year. We believe that this seasonality reflects the tendency of homebuyers to shop for a new home in the spring with the goal of closing in the fall or winter, as well as the scheduling of construction to accommodate seasonal weather conditions. Our financial services operations also experience seasonality because loan originations correspond with the delivery of homes in our homebuilding operations. Additionally, seasonality may, from time to time, be affected by short-term volatility in the homebuilding industry and in the overall economy.
Previous wording
Northern Region. During the three months ended June 30, 2025, revenue in our Northern region increased $23.5 million, from $464.8 million in the second quarter of 2024 to $488.3 million in the second quarter of 2025. This increase in revenue was primarily the result of a 3% increase in the average sales price of homes being delivered and a 2% increase in number of homes delivered. Operating income in our Northern region increased $3.2 million from $72.8 million in the second quarter of 2024 to $76.0 million during the quarter ended June 30, 2025. This increase in operating income was the result of a $4.3 million improvement in our gross margin, offset in part by a $1.1 million increase in selling, general and administrative expense. Our gross margin improved $4.3 million to $111.3 million in the second quarter of 2025 from $107.0 million in the second quarter of 2024. Our gross margin percentage declined 20 basis points to 22.8% from 23.0% in the prior year’s second quarter primarily due to the $2.5 million increase in lot costs and $2.9 million increase in incentives offered on homes delivered compared to prior year.
Current wording
Northern Region. During the three months ended September 30, 2025, revenue in our Northern region decreased $10.6 million, from $498.5 million in the third quarter of 2024 to $487.9 million in the third quarter of 2025. This decrease in revenue was primarily the result of a 7% decrease in number of homes delivered, partially offset by a 6% increase in the average sales price of homes being delivered. Operating income in our Northern region increased $1.9 million from $75.5 million in the third quarter of 2024 to $77.4 million during the quarter ended September 30, 2025. This increase in operating income was the result of a $1.6 million improvement in our gross margin and a $0.3 million decrease in selling, general and administrative expense. Our gross margin improved $1.6 million to $112.4 million in the third quarter of 2025 from $110.8 million in the third quarter of 2024. Our gross margin percentage improved 80 basis points to 23.0% from 22.2% in the prior year’s third quarter primarily due to a 6% increase in the average sales price of homes being delivered offset in part by a 7% decrease in number of homes delivered and a $6.4 million increase in lot costs compared to prior year.
Previous wording
Selling, general and administrative expense increased $1.1 million, from $34.1 million for the quarter ended June 30, 2024 to $35.2 million for the quarter ended June 30, 2025 and declined 10 basis points as a percentage of revenue to 7.2% in 2025's second quarter from 7.3% in 2024's second quarter. The increase in selling, general and administrative expense was attributable to a $0.7 million increase in general and administrative expense primarily related to land-related expenses and a$0.4 million increase in selling expense. The increase in selling expense was due to a $0.1 million increase in sales and realtor commissions produced by the higher number of homes delivered and a $0.3 million increase in costs associated with our sales offices, including compensation.
Current wording
Selling, general and administrative expense decreased $0.3 million, from $35.3 million for the quarter ended September 30, 2024 to $35.0 million for the quarter ended September 30, 2025 and increased 10 basis points as a percentage of revenue to 7.2% in 2025's third quarter from 7.1% in 2024's third quarter. The decrease in selling, general and administrative expense was attributable to a$0.3 million decrease in selling expense. The decrease in selling expense was due to a $0.5 million decrease in sales and realtor commissions produced by the lower number of homes delivered offset in part by a $0.2 million increase in costs associated with our sales offices, including compensation and advertising.
Previous wording
During the three months ended June 30, 2025, we experienced an 13% decrease in new contracts in our Northern region from 1,002 in the second quarter of 2024 to 873 in the second quarter of 2025. Homes in backlog decreased 21% from 1,618 homes at June 30, 2024 to 1,281 homes at June 30, 2025. The decreases in new contracts and backlog were primarily a result of weakened market demand compared to prior year. Average sales price in backlog increased approximately 7% to $563,000 at June 30, 2025 compared to $527,000 at June 30, 2024 primarily due to the mix of homes being sold. During the three months ended June 30, 2025, we opened 8 new communities in our Northern region compared to opening three during 2024's second quarter. Our monthly absorption rate in our Northern region was 3.0 per community in the second quarter of 2025 compared to 3.5 in the second quarter of 2024 due to a decrease in new contracts.
Current wording
During the three months ended September 30, 2025, we experienced an 17% decrease in new contracts in our Northern region from 890 in the third quarter of 2024 to 742 in the third quarter of 2025. Homes in backlog decreased 28% from 1,493 homes at September 30, 2024 to 1,081 homes at September 30, 2025. The decreases in new contracts and backlog were primarily a result of weakened market demand and buyer urgency compared to prior year. Average sales price in backlog increased approximately 5% to $563,000 at September 30, 2025 compared to $538,000 at September 30, 2024 primarily due to the mix of homes being sold. During the three months ended September 30, 2025, we opened four new communities in our Northern region compared to opening seven during 2024's third quarter. Our monthly absorption rate in our Northern region was 2.5 per community in the third quarter of 2025 compared to 3.3 in the third quarter of 2024 due to a decrease in new contracts.
Previous wording
Southern Region. During the three month period ended June 30, 2025, revenue in our Southern region increased $28.7 million, from $614.2 million in the second quarter of 2024 to $642.9 million in the second quarter of 2025. This 5% increase in revenue was the result of an 8% increase in the number of homes delivered (108 units) offset, in part by a 3% decrease in the average sales price of homes delivered (14,000 per home delivered). Operating income in our Southern region decreased $35.5 million from $119.8 million in the second quarter of 2024 to $84.3 million in the first quarter of 2025. This decrease in operating income was the result of a $27.7 million decline in our gross margin and a $7.8 million increase in selling, general, and administrative expense. Our gross margin declined $27.7 million, due primarily to the decrease in average sales price for homes delivered as a result of increased incentives offered partially offset by an increase in the number of homes delivered compared to prior year. Our gross margin percentage declined 550 basis points from 27.9% in prior year’s second quarter to 22.4% in the second quarter of 2025, primarily due to the mix of homes being delivered, $14.2 million increase in lot costs and $5.5 million increase in incentives offered on homes delivered.
Current wording
Southern Region. During the three month period ended September 30, 2025, revenue in our Southern region decreased $5.2 million, from $614.4 million in the third quarter of 2024 to $609.2 million in the third quarter of 2025. This 1% decrease in revenue was the result of an 8% decrease in the average sales price of homes delivered ($40,000 per home delivered), offset in part by an 8% increase in the number of homes delivered (98 units). Operating income in our Southern region decreased $51.2 million from $114.1 million in the third quarter of 2024 to $62.9 million in the third quarter of 2025. This decrease in operating income was the result of a $45.6 million decline in our gross margin and a $5.7 million increase in selling, general, and administrative expense. Our gross margin declined $45.6 million due primarily to the decrease in average sales price for homes delivered which included a $6.7 million increase in incentives offered, increased closing costs of $10.8 million and a $12.3 million increase in lot costs partially offset by an increase in the number of homes delivered compared to prior year. Our gross margin percentage declined 730 basis points from 27.5% in prior year’s third quarter to 20.2% in the third quarter of 2025, primarily due to the mix of homes being delivered, $12.3 million increase in lot costs and $6.7 million increase in incentives offered on homes delivered.
Previous wording
Selling, general and administrative expense increased $7.8 million from $51.8 million in the second quarter of 2024 to $59.6 million in the second quarter of 2025 and increased 90 basis points as a percentage of revenue to 9.3% in the second quarter of 2025 from 8.4% in the second quarter of 2024. General and administrative expense increased $3.0 million due to a $1.0 million increase in compensation-related expenses, a $1.2 million increase in land-related expenses, and a $0.8 million increase in miscellaneous expenses. Selling expense increased $4.8 million due to a $4.1 million increase in realtor and sales commissions and a $0.7 million increase in costs related to our sales office, including compensation.
Current wording
Selling, general and administrative expense increased $5.7 million from $54.5 million in the third quarter of 2024 to $60.2 million in the third quarter of 2025 and increased 100 basis points as a percentage of revenue to 9.9% in the third quarter of 2025 from 8.9% in the third quarter of 2024. General and administrative expense increased $0.5 million due to a $1.0 million increase in land-related expenses and a $0.2 million increase in miscellaneous expenses, partially offset by a $0.7 million decrease in compensation-related expenses. Selling expense increased $5.2 million due to a $4.4 million increase in realtor and sales commissions and a $0.8 million increase in costs related to our sales office, including compensation.
Previous wording
During the three months ended June 30, 2025, our new contracts decreased in our Southern region from 1,253 in the second quarter of 2024 to 1,205 in the second quarter of 2025, which was primarily due to weakened market demand. Homes in backlog decreased by 28% from 1,804 homes at June 30, 2024 to 1,296 homes at June 30, 2025, primarily as a result of weakened demand and a shift in demand to inventory homes which offer incentives compared to last year. Average sales price in backlog increased to $543,000 at June 30, 2025 from $538,000 at June 30, 2024 primarily due to the mix of homes being sold. During the three months ended June 30, 2025, we opened 15 new communities in our Southern region compared to opening 14 communities during 2024's second quarter. Our monthly absorption rate in our Southern region declined to 3.1 per community in the second quarter of 2025 compared to 3.5 per community in the second quarter of 2024 as a result of a decrease in new contracts.
Current wording
During the three months ended September 30, 2025, our new contracts increased in our Southern region from 1,133 in the third quarter of 2024 to 1,166 in the third quarter of 2025, which was primarily due to new communities. Homes in backlog decreased by 34% from 1,681 homes at September 30, 2024 to 1,108 homes at September 30, 2025, primarily as a result of weakened demand and a shift in demand to inventory homes which offer incentives compared to last year. Average sales price in backlog decreased to $544,000 at September 30, 2025 from $549,000 at September 30, 2024 primarily due to the mix of homes being sold. During the three months ended September 30, 2025, we opened 10 new communities in our Southern region compared to opening 12 communities during 2024's third quarter. Our monthly absorption rate in our Southern region declined to 2.9 per community in the third quarter of 2025 compared to 3.1 per community in the third quarter of 2024 as a result of an increase in new communities.
Previous wording
Financial Services. Revenue from our mortgage and title operations increased 2% to $31.5 million (a second quarter record) in the second quarter of 2025 from $30.8 million in the second quarter of 2024 due to higher margins on loans sold and capture rate during the period compared to prior year’s second quarter, a 15% increase in the number of loan originations from 1,618 in 2024's second quarter to 1,865 in the second quarter of 2025, and an increase in the average loan amount from $395,000 in the quarter ended June 30, 2024 to $403,000 in the quarter ended June 30, 2025.
Current wording
Financial Services. Revenue from our mortgage and title operations increased 16% to $34.6 million (a third quarter record) in the third quarter of 2025 from $30.0 million in the third quarter of 2024 due to higher margins on loans sold and capture rate during the period compared to prior year’s third quarter, a 9% increase in the number of loan originations from 1,695 in 2024's third quarter to 1,848 in the third quarter of 2025, and an increase in the average loan amount from $403,000 in the quarter ended September 30, 2024 to $406,000 in the quarter ended September 30, 2025.
Previous wording
Our financial services segment experienced a $0.3 million decrease in operating income in the second quarter of 2025 compared to 2024's second quarter, which was primarily due to a $1.0 million increase in selling, general and administrative expense compared to the second quarter of 2024, which was primarily the result of an increase in compensation-related expenses offset in part by the increase in revenue.
Current wording
Our financial services segment experienced a $3.4 million increase in operating income in the third quarter of 2025 compared to 2024's third quarter, which was primarily due to an increase in revenue offset in part by a $1.3 million increase in selling, general and administrative expense compared to the third quarter of 2024, which was primarily the result of an increase in compensation-related expenses.
Previous wording
At June 30, 2025, M/I Financial provided financing services in all of our markets. Approximately 92% of our homes delivered during the second quarter of 2025 were financed through M/I Financial, compared to approximately 87% in the second quarter of 2024. Capture rate is influenced by financing availability and competition in the mortgage market and can fluctuate from quarter to quarter.
Current wording
At September 30, 2025, M/I Financial provided financing services in all of our markets. Approximately 93% of our homes delivered during the third quarter of 2025 were financed through M/I Financial, compared to approximately 89% in the third quarter of 2024. Capture rate is influenced by financing availability and competition in the mortgage market and can fluctuate from quarter to quarter.
Previous wording
Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense decreased $1.6 million from $23.7 million for the second quarter of 2024 to $22.1 million for the second quarter of 2025. This decrease resulted from a $1.7 million decrease in compensation-related expenses offset in part by miscellaneous expenses.
Current wording
Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense increased $0.8 million from $24.2 million for the third quarter of 2024 to $25.0 million for the third quarter of 2025. This increase resulted from a $0.5 million increase in compensation-related expenses and a $0.3 million increase in costs associated with information systems.
Previous wording
Interest Income, net of Interest Expense. The Company earned $4.4 million of interest income - net for the three months ended June 30, 2025 compared to $7.3 million for the three months ended June 30, 2024. This decrease was primarily due to a lower average cash balance on hand compared to prior year.
Current wording
Interest Income, net of Interest Expense. The Company earned $4.5 million of interest income - net for the three months ended September 30, 2025 compared to $6.7 million for the three months ended September 30, 2024. This decrease was primarily due to a lower average cash balance on hand compared to prior year.
Previous wording
Northern Region. During the first half of 2025, homebuilding revenue in our Northern region increased $25.3 million, from $873.3 million in the first six months of 2024 to $898.6 million in the first six months of 2025. This 3% increase in revenue was primarily the result of a $4.5 million increase in land sale revenue and an increase in the average sales price of homes delivered ($12,000 per home delivered). Operating income in our Northern region increased $5.7 million, from $130.9 million during the first half of 2024 to $136.6 million during the six months ended June 30, 2025. The increase in operating income was primarily the result of a $6.4 million increase in our gross margin offset partially by a $0.7 million increase in selling, general and administrative expense. Our gross margin improved $6.4 million, and our gross margin percentage improved 10 basis points from 22.4% in the first six months of 2024 to 22.5% for the same period in 2025, primarily due to the mix of homes being delivered and the increase in land sales offset, in part, by a $6.7 million increase in incentives offered and $4.9 million increase in lot costs.
Current wording
Northern Region. During the nine months ended September 30, 2025, homebuilding revenue in our Northern region increased $14.8 million, from $1.37 billion in the nine months ended September 30, 2024 to $1.39 billion in the nine months ended September 30, 2025. This 1% increase in revenue was primarily the result of a $3.6 million increase in land sale revenue and an increase in the average sales price of homes delivered ($18,000 per home delivered) offset in part by a 3% decrease of homes delivered. Operating income in our Northern region increased $7.6 million, from $206.4 million during the nine months ended September 30, 2024 to $214.0 million during the nine months ended September 30, 2025. The increase in operating income was primarily the result of an $8.0 million increase in our gross margin offset partially by a $0.4 million increase in selling, general and administrative expense. Our gross margin improved $8.0 million, and our gross margin percentage improved 40 basis points from 22.3% in the nine months ended September 30, 2024 to 22.7% for the same period in 2025, primarily due to the mix of homes being delivered which resulted in an average sales price 4% higher than prior year and the increase in land sales offset, in part, by an $11.4 million increase in lot costs.
Previous wording
During the six months ended June 30, 2025, we experienced a 10% decrease in new contracts in our Northern region, from 2,164 in the six months ended June 30, 2024 to 1,938 in the first half of 2025. Homes in backlog decreased 21% from 1,618 at June 30, 2024 to 1,281 homes at June 30, 2025. The decrease in new contracts and homes in backlog was primarily due to decline in buyer urgency. Average sales price in backlog increased to $563,000 at June 30, 2025 compared to $527,000 at June 30, 2024 primarily due to the mix of homes being sold. During the six months ended June 30, 2025, we opened 24 new communities in our Northern region compared to 10 new communities opened during the first half of 2024. Our monthly absorption rate in our Northern region declined to 3.4 per community in the six months ended June 30, 2025 from 3.7 per community in the same period in 2024 as a result of increased community count.
Current wording
During the nine months ended September 30, 2025, we experienced a 12% decrease in new contracts in our Northern region, from 3,054 in the nine months ended September 30, 2024 to 2,680 in the first nine months of 2025. Homes in backlog decreased 28% from 1,493 at September 30, 2024 to 1,081 homes at September 30, 2025. The decrease in new contracts and homes in backlog was primarily due to weakened demand and decline in buyer urgency. Average sales price in backlog increased to $563,000 at September 30, 2025 compared to $538,000 at September 30, 2024 primarily due to the mix of homes being sold. During the nine months ended September 30, 2025, we opened 28 new communities in our Northern region compared to 17 new communities opened during the nine months ended September 30, 2024. Our monthly absorption rate in our Northern region declined to 3.1 per community in the nine months ended September 30, 2025 from 3.5 per community in the same period in 2024 as a result of increased community count.
Previous wording
Southern Region. During the six months ended June 30, 2025, homebuilding revenue in our Southern region decreased $48.4 million from $1.23 billion in the first half of 2024 to $1.18 billion in the first half of 2025. This 4% decrease in homebuilding revenue was the result of a 2% decrease in the average sales price of homes delivered ($7,000 per home delivered) primarily due to the mix of homes delivered and a 2% decrease in the number of homes delivered (57 units). Operating income in our Southern region decreased 31% from $237.6 million in the first half of 2024 to $164.7 million during the six months ended June 30, 2025. This decrease in operating income was the result of a $64.9 million decline in our gross margin and a $8.0 million increase in selling, general, and administrative expense. Our gross margin percentage declined 440 basis points from 27.7% in the six months ended June 30, 2024 to 23.3% in the same period in 2025 primarily due to a decrease in the number of homes delivered that were impacted by a $28.7 million increase in lot costs and an $11.7 increase in incentives offered.
Current wording
Southern Region. During the nine months ended September 30, 2025, homebuilding revenue in our Southern region decreased $53.6 million from $1.84 billion in the nine months ended September 30, 2024 to $1.79 billion in the nine months ended September 30, 2025. This 3% decrease in homebuilding revenue was the result of a 4% decrease in the average sales price of homes delivered ($18,000 per home delivered) primarily due to the mix of homes delivered and incentives, partially offset by a 1% increase in the number of homes delivered (41 units). Operating income in our Southern region decreased 35% from $351.7 million in the nine months ended September 30, 2024 to $227.6 million during the nine months ended September 30, 2025. This decrease in operating income was the result of a $110.5 million decline in our gross margin and a $13.6 million increase in selling, general, and administrative expense. Our gross margin percentage declined 540 basis points from 27.6% in the nine months ended September 30, 2024 to 22.2% in the same period in 2025 primarily due to the decrease in average sales price for homes delivered including a $25.2 million increase in incentives offered, a $40.8 million increase in lot costs, and $6.3 million in inventory impairment charges and deposit write-offs, offset in part by an increase in the number of homes delivered.
Previous wording
Selling, general and administrative expense increased $8.0 million from $101.6 million in the first half of 2024 to $109.6 million in the first half of 2025 and increased as a percentage of revenue to 9.3% compared to 8.3% in the first half of 2024. The increase in selling, general and administrative expense was also attributable to a $4.2 million increase in general and administrative expense, which was primarily related to a $1.3 million increase in compensation-related expenses due to our increased headcount, a $1.7 million increase in land-related expenses, and a $1.2 million increase in other miscellaneous expenses. The increase in selling, general and administrative expense was attributable to a $3.8 million increase in selling expense primarily due to a $2.1 million increase related to costs associated with our sales offices, including advertising and compensation and a $1.7 million increase in realtor commissions.
Current wording
Selling, general and administrative expense increased $13.6 million from $156.1 million in the nine months ended September 30, 2024 to $169.7 million in the nine months ended September 30, 2025 and increased as a percentage of revenue to 9.5% compared to 8.5% in the first nine months of 2024. The increase in selling, general and administrative expense was attributable to a $4.6 million increase in general and administrative expense, which primarily related to a $1.1 million increase in compensation-related expenses due to our increased headcount, a $2.7 million increase in land-related expenses, and a $0.8 million increase in other miscellaneous expenses. The increase in selling, general and administrative expense was attributable to a $8.9 million increase in selling expense primarily due to a $2.9 million increase related to costs associated with our sales offices, including advertising and compensation and a $6.0 million increase in realtor and sales commissions.
Showing the first 40 of 71 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Income Taxes. Our overall effective tax rate was 23.8% for the three months ended September 30, 2025 and 22.9% for the three months ended September 30, 2024. The increase in the effective rate from the three months ended September 30, 2024 was primarily attributable to a $1.0 million decrease in tax benefits from equity compensation in 2025.
Current report — wording carried from elsewhere
“MIF Mortgage Repurchase Facility”), with M/I Financial as borrower; and (3) a $100 million mortgage repurchase agreement dated October 21, 2025 (the “MIF Master Repurchase Agreement”),with M/I Financial as borrower.
Current report — wording carried from elsewhere
Financing Cash Flow Activities. During the nine months ended September 30, 2025, we used $202.8 million of cash in financing activities, compared to using $43.2 million of cash in financing activities during the nine months ended September 30, 2024. The cash used in financing activities in 2025 was primarily due to the repurchase of $150.4 million of our outstanding common shares during the nine months ended September 30, 2025, and repayments (net of borrowings) under our MIF
Current report — wording carried from elsewhere
The amount borrowed will also be impacted by other cash receipts and payments, any capital markets transactions or other additional financings by the Company, any repayments or redemptions of outstanding debt, any additional share repurchases under the 2025 Share Repurchase Program and any other extraordinary events or transactions. The Company may also experience significant variation in cash and Credit Facility balances from week to week due to the timing of such receipts and payments.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The housing market continues to be challenged by persistent macroeconomic challenges including elevated mortgage interest rates, affordability concerns and general economic uncertainties such as tariffs, inflation, job security and recession concerns. Despite these headwinds, we remain optimistic about our business.
Previous report — wording carried elsewhere
Income Taxes. Our overall effective tax rate was 24.3% for the three months ended June 30, 2025 and 24.4% for the three months ended June 30, 2024.