M/I HOMES, INC.

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 172,900 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 174,800 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

We believe that there have been no significant changes to our critical accounting policies during the quarter ended June 30, 2026 as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Form 10-K.

Current wording

We believe that there have been no significant changes to our critical accounting policies or estimates during the quarter ended September 30, 2026 as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Form 10-K.

Previous wording

To support affordability and stimulate demand, we continued to offer targeted sales incentives, including mortgage interest rate buydowns, consistent with our approach in 2025. These incentives contributed to improved contract activity compared to the prior year and resulted in a record number of second quarter new contracts. Despite stronger sales activity, home closings declined compared to the second quarter of 2025. Overall profitability decreased from the prior year, primarily reflecting higher lot costs and mortgage rate buydown incentives that continue to be an important part of our sale strategy. Nevertheless, we remain encouraged by the underlying fundamentals of our business, as demand for attainable housing continues to be supported by a structural undersupply of homes. Additionally, housing affordability remains a key focus for federal policymakers, with continued attention on initiatives aimed at increasing housing availability and improving access to homeownership.

Current wording

Despite the current market conditions, we remain encouraged by the underlying fundamentals of our business and demand for housing, our well-located communities, and diverse product offerings. Additionally, housing affordability remains a key focus for federal policymakers, with continued attention on initiatives aimed at increasing housing availability and improving access to homeownership.

Previous wording

Our results during the second quarter and first half of 2026 in comparison to the second quarter and first half of 2025 were as follows:

Current wording

Our results during the third quarter and first nine months of 2026 in comparison to the third quarter and first nine months of 2025 were as follows:

Previous wording

•Number of homes delivered decreased 6% to 2,206 homes and decreased 5% to 4,120 homes, respectively

Current wording

•Number of homes delivered decreased 2% to 2,241 homes and decreased 4% to 6,361 homes, respectively

Previous wording

•Income before income taxes decreased 35% to $104.6 million and decreased 37% to $193.7 million, respectively

Current wording

•Income before income taxes decreased 38% to $86.9 million and decreased 37% to $280.6 million, respectively

Previous wording

•Gross margin decreased 260 basis points to 22.1% and decreased 310 basis points to 22.1%, respectively

Current wording

•Gross margin decreased 300 basis points to 20.9% and decreased 310 basis points to 21.7%, respectively

Previous wording

•Net income decreased 35% to $79.1 million and decreased 37% to $146.9 million, respectively

Current wording

•Net income decreased 38% to $66.6 million and decreased 37% to $213.5 million, respectively

Previous wording

•Shareholders’ equity of $3.2 billion, a 5% increase from a year ago, with book value per common share increasing to arecord high $128 per share

Current wording

•Shareholders’ equity of $3.3 billion, a 3% increase from a year ago, with book value per common share increasing to a record high $130 per share

Previous wording

Additionally, our financial services segment achieved itshighest revenue in a second quarter and improved capture rate to 96% from 92% in second quarter 2025.

Current wording

Additionally, our financial services segment achieved its second highest revenue in a third quarter and improved capture rate to 96% from 93% in the third quarter of 2025.

Previous wording

Our company-wide absorption pace of sales per community for the second quarter of 2026 was 3.4 per month compared to 3.0 for the prior year’s second quarter. We plan to open additional new communities during the remainder of 2026 and increase our average community count by about 5% from 2025.

Current wording

Our company-wide absorption pace of sales per community for the third quarter of 2026 was 2.6 per month compared to 2.7 for the prior year’s third quarter. We plan to open additional new communities during the remainder of 2026 and have our end of the year community count be about 5% higher than 2025.

Previous wording

Income before income taxes for the second quarter of 2026 decreased $55.5 million from $160.1 million in the second quarter of 2025 to $104.6 million in 2026. Net income was $79.1 million, or $3.02 per diluted share, in 2026's second quarter, compared to $121.2 million, or $4.42 per diluted share, in 2025's second quarter. Our effective tax rate was 24.4% and 24.3% in the second quarter of 2026 and 2025, respectively. For the first half of 2026, income before income taxes decreased $112.5 million from $306.2 million in the first half of 2025 to $193.7 million in 2026. We achieved net income of $146.9 million, or $5.57 per diluted share, during the first half of 2026 compared to net income of $232.5 million, or $8.40 per diluted share, in the six months ended June 30, 2025. Our effective tax rate was 24.2% in 2026's first half compared to 24.1% in the same period in 2025.

Current wording

Income before income taxes for the third quarter of 2026 decreased $52.9 million from $139.8 million in the third quarter of 2025 to $86.9 million in 2026. Net income was $66.6 million, or $2.56 per diluted share, in 2026's third quarter, compared to $106.5 million, or $3.92 per diluted share, in 2025's third quarter. Our effective tax rate was 23.4% and 23.8% in the third quarter of 2026 and 2025, respectively. For the nine months ended September 30, 2026, income before income taxes decreased $165.4 million from $446.0 million in the nine months ended September 30, 2025 to $280.6 million in 2026. We achieved net income of $213.5 million, or $8.14 per diluted share, during the nine months ended September 30, 2026 compared to net income of $339.0 million, or $12.32 per diluted share, in the nine months ended September 30, 2025. Our effective tax rate was 23.9% in 2026's first nine months compared to 24.0% in the same period in 2025.

Previous wording

During the quarter ended June 30, 2026, our total revenue was $1.06 billion, of which $1.03 billion was from homebuilding and $32.3 million was from our financial services operations. Revenue from homebuilding decreased 9% in 2026's second quarter compared to the same period in 2025 driven primarily by a 4% decrease in the average sales price of homes delivered ($20,000 per home delivered) and a 6% decrease in the number of homes delivered (142 units) offset in part by a $12.3 million increase in land sales. Our revenue and average sales price reflect a $63.2 million reduction for sales incentives and closing costs in the second quarter of 2026 compared to a $47.1 million reduction for sales incentives and closing costs in 2025's second quarter. Revenue from our financial services segment increased 3% to $32.3 million in the second quarter of 2026 as a result of slightly higher margins on loans sold and an improved capture rate, partially offset by a decrease in loans originated during the period compared to the second quarter of 2025. For the first half of 2026, werecorded year-to-date total revenue of $1.98 billion, of which $1.92 billion was from homes delivered and $63.6 million was from our financial services operations. Revenue from homebuilding decreased 8% in the first half of 2026 compared to the same period in 2025 driven primarily by decreases in the number of homes delivered (204 units) and the average sales price of homes delivered ($19,000 per home delivered). Our revenue and average sales price reflect a $115.9 million reduction for incentives and closing costs in 2026’s first six months compared to an $87.1 million reduction for incentives and closing costs in 2025’s first six months. Revenue from our financial services segment increased 1% to $63.6 million in the first half of 2026 compared to the first half of 2025 as a result of an increase in loans originated during the period and an improved capture rate, offset by a decrease in the average loan amount during the period.

Current wording

During the quarter ended September 30, 2026, our total revenue was $1.08 billion, of which $1.04 billion was from homebuilding and $32.7 million was from our financial services operations. Revenue from homebuilding decreased 5% in 2026's third quarter compared to the same period in 2025 driven primarily by a 4% decrease in the average sales price of homes delivered ($17,000 per home delivered) and a 2% decrease in the number of homes delivered (55 units) offset in part by a $10.2 million increase in land sales. Our revenue and average sales price reflect a $73.2 million reduction for sales incentives and closing costs in the third quarter of 2026 compared to a $53.5 million reduction for sales incentives and closing costs in 2025's third quarter. Revenue from our financial services segment decreased 5% to $32.7 million in the third quarter of 2026 as a result of a decrease in loans originated during the period and lower margins on loans sold, partially offset by an improved capture rate compared to the third quarter of 2025. For the nine months ended September 30, 2026, werecorded year-to-date total revenue of $3.06 billion, of which $2.96 billion was from homes delivered and land sales and $96.3 million was from our financial services operations. Revenue from homebuilding decreased 7% in the nine months ended September 30, 2026 compared to the same period in 2025 driven primarily by a 4% decrease in the number of homes delivered (259 units) and a 4% decrease in the average sales price of homes delivered ($18,000 per home delivered) offset in part by a $28.8 million increase in land sales. Our revenue and average sales price reflect a $189.1 million reduction for incentives and closing costs in 2026’s first nine months compared to a $140.6 million reduction for incentives and closing costs in 2025’s first nine months. Revenue from our financial services segment decreased 1% to $96.3 million in the first nine months of 2026 compared to the nine months ended September 30, 2025 as a result of a decrease in loans originated and a decrease in the average loan amount during the period, partially offset by an improved capture rate.

Previous wording

Total gross margin (total revenue less total land and housing costs) decreased $51.1 million in the second quarter of 2026 compared to the second quarter of 2025 as a result of a $52.0 million decline in the gross margin of our homebuilding operations, partially offset by a $0.9 million increase in the gross margin of our financial services operations. Our homebuilding gross margin percentage declined by 290 basis points to 19.7% in the second quarter of 2026 from 22.6% in the second quarter of 2025. The decline in homebuilding gross margin dollars primarily resulted from the decrease in average sales price of homes delivered, an $8.7 million increase in lot costs, a $22.0 million increase in mortgage interest rate buydowns offered, a 6% decrease in homes delivered and $4.2 million in inventory charges in 2026. 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, number of homes under construction and sales incentives. During the second quarter of 2026, homebuilding gross margin was compressed primarily due to mix of inventory homes delivered, incentives offered and increasedlot costs. The gross margin of our financial services operations increased $0.9 million in the second quarter of 2026 compared to the second quarter of 2025 as a result of higher margins on loans sold, an improved capture rate, partially offset by a decrease in the number of loan originations. Total gross margin decreased $101.3 million in the first half of 2026 compared to the same period in 2025 as a result of a $101.9 million decline in the gross margin of our homebuilding operations offset, in part, by a $0.6 million improvement in the gross margin of our financial services operations. This decline in the gross margin of our homebuilding operations is primarily due to a decrease in the number of homes delivered, a decrease in the average sales price of homes delivered ($19,000 per home delivered), a $14.5 million increasein lot costs, and $4.2 million in inventory charges. The gross margin of our financial services operations increased $0.6 million in the first half of 2026 compared to the same period in 2025 as a result of an increase in loans originated during the period and an improved capture rate, partially offset by a decrease in the average loan amount during the period.

Current wording

Total gross margin (total revenue less total land and housing costs and inventory charges) decreased $45.6 million in the third quarter of 2026 compared to the third quarter of 2025 as a result of a $43.7 million decline in the gross margin of our homebuilding operations and a $1.9 million decline in the gross margin of our financial services operations. Our homebuilding gross margin percentage declined by 310 basis points to 18.4% in the third quarter of 2026 from 21.5% in the third quarter of 2025. The decline in homebuilding gross margin dollars primarily resulted from the decrease in average sales price of homes delivered which included a $23.2 million increase in mortgage interest rate buydowns, a $6.0 million increase in lot costs, a 2% decrease in homes delivered and $1.7 million in unusual warranty charges offset in part by a $2.9 million decrease in inventory charges in 2026 compared to 2025. 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, number of homes under construction and sales incentives. During the third quarter of 2026, homebuilding gross margin was compressed primarily due to mix of inventory homes delivered, incentives offered and increased lot costs. The gross margin of our financial services operations decreased $1.9 million in the third quarter of 2026 compared to the third quarter of 2025 as a result of lower margins on loans sold and a decrease in the number of loan originations, partially offset by an improved capture rate. Total gross margin decreased $146.9 million in the nine months ended September 30, 2026 compared to the same period in 2025 as a result of a $145.6 million decline in the gross margin of our homebuilding operations and a $1.3 million decline in the gross margin of our financial services operations. This decline in the gross margin of our homebuilding operations is primarily due to a decrease in the number of homes delivered, a decrease in the average sales price of homes delivered ($18,000 per home delivered) which included a $58.6 million increase in mortgage interest rate buydowns, a $19.3 million increase in lot costs, and $1.3 million increase in inventory charges. The gross margin of our financial services operations decreased $1.3 million in the nine months ended September 30, 2026 compared to the same period in 2025 as a result of a decrease in loans originated and a decrease in the average loan amount during the period, partially offset by an improved capture rate.

Previous wording

We opened 49 new communities during the first half of 2026 and closed 47 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 76 new communities during the nine months ended September 30, 2026 and closed 62 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, 2026, selling, general and administrative expense increased $3.3 million, and increased as a percentage of revenue from 11.3% in the second quarter of 2025 to 12.6% in the second quarter of 2026. Selling expense increased $0.4 million from 2025's second quarter and increased as a percentage of revenue to 6.0% in 2026's second quarter from 5.5% for the same period in 2025. The dollar increase in selling expense is related to a $1.2 million increase in advertising expenses and a $2.1 million increase in expenses related to model homes and sales offices, including compensation related expenses, partially offset by a $2.9 million decrease in realtor and sales commissions in the second quarter of 2026. General and administrative expense increased $2.9 million in the second quarter of 2026 compared to the second quarter of 2025 and increased as a percentage of revenue to 6.6% in the second quarter 2026 from 5.8% in 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 due to increased head count, a $0.6 million increase in costs associated with information systems, a $0.2 million increase in land-related expenses and a $0.8 million increase in miscellaneous expenses. For the six months ended June 30, 2026, selling, general and administrative expense increased $8.0 million, and increased as a percentage of revenue from 11.4% in the six months ended June 30, 2025 to 12.6% in the first six months of 2026. Selling expense increased $2.9 million from the first half of 2025 and increased as a percentage of revenue to 6.0% in 2026's first half from 5.4% for the same period in 2025. The dollar increase in selling expense in the second quarter of 2026 related to a $4.8 million increase in costs associated with our sales offices, including compensation-related and advertising expenses, offset by a $1.9 million decrease in realtor and sales commissions. General and administrative expense increased $5.1 million compared to the first half of 2025 and increased as a percentage of revenue from 5.9% in the six months ended June 30, 2025 to 6.6% in the first six months of 2026. The increase in general and administrative expense was primarily due to a $2.0 million increase in compensation-related expenses due to higher average headcount and equity incentives offset in part by bonus expense, a $0.9 million increase in costs associated with information systems, a $0.8 million increase in land-related expenses, and a $1.4 million increase in various other expenses, including advertising expenses.

Current wording

For the three months ended September 30, 2026, selling, general and administrative expense increased $6.4 million, and increased as a percentage of revenue from 11.9% in the third quarter of 2025 to 13.1% in the third quarter of 2026. Selling expense increased $0.6 million from 2025's third quarter and increased as a percentage of revenue to 6.0% in 2026's third quarter from 5.7% for the same period in 2025. The dollar increase in selling expense related to a $1.3 million increase in advertising expenses and a $2.2 million increase in expenses related to model homes and sales offices as community counts increase, including compensation-related expenses, partially offset by a $2.9 million decrease in realtor and sales commissions in the third quarter of 2026. General and administrative expense increased $5.8 million in the third quarter of 2026 compared to the third quarter of 2025 and increased as a percentage of revenue to 7.1% in the third quarter of 2026 from 6.3% in the third quarter of 2025. The dollar increase in general and administrative expense was primarily due to a $1.9 million increase in compensation-related expenses due to increased head count, a $1.3 million increase in costs associated with information systems, a $0.8 million increase in land-related expenses, a $0.6 million increase in depreciation and a $1.2 million increase in miscellaneous expenses. For the nine months ended September 30, 2026, selling, general and administrative expense increased $14.4 million, and increased as a percentage of revenue from 11.5% in the nine months ended September 30, 2025 to 12.8% in the nine months ended September 30, 2026. Selling expense increased $3.5 million from the nine months ended September 30, 2025 and increased as a percentage of revenue to 6.0% in 2026's first nine months from 5.5% for the same period in 2025. The dollar increase in selling expense in the first nine months of 2026 related to a $5.4 million increase in costs associated with our sales offices and models, including compensation-related expenses and a $2.9 million increase in advertising expenses, offset by a $4.8 million decrease in realtor and sales commissions. General and administrative expense increased $10.9 million compared to the nine months ended September 30, 2025 and increased as a percentage of revenue from 6.0% in the nine months ended September 30, 2025 to 6.8% in the nine months ended September 30, 2026. The increase in general and administrative expense was primarily due to a $3.8 million increase in compensation-related expenses due to higher average headcount and equity incentives offset in part by decreased bonus expense, a $2.1 million increase in costs associated with information systems, a $1.5 million increase in land-related expenses, a $1.3 million increase in depreciation and a $2.2 million increase in various other expenses, including costs associated with financial services.

Previous wording

The housing market continues to face macroeconomic challenges, including elevated mortgage interest rates, affordability constraints, inflationary pressures, evolving trade and tariff policies, labor market uncertainty, recession concerns, and ongoing geopolitical volatility, which have continued to affect consumer confidence and homebuying activity. While we remain confident in the long-term prospects of our business, we believe these market conditions may persist through the remainder of 2026. In response, we remain focused on executing strategies designed to navigate this environment, including disciplined overhead management, prudent land acquisition and development spending, pricing discipline, and the selective use of sales incentives, including mortgage interest rate buydowns, to improve affordability, support demand, increase sales activity, and reduce contract cancellations.

Current wording

The housing market continues to face significant macroeconomic challenges, including rising mortgage interest rates, affordability constraints, inflationary pressures, evolving trade and tariff policies, labor market uncertainty, recession concerns, and ongoing geopolitical volatility, all of which have continued to impact consumer confidence and homebuying activity. Mortgage interest rates increased during the third quarter of 2026 and exceeded 7% as of quarter-end, further pressuring affordability and increasing the cost of homeownership for prospective buyers. While we remain confident in the long-term prospects of our business, we believe these market conditions, particularly the increasing mortgage interest rate environment, may persist through the remainder of 2026 and into 2027. In response, we remain focused on executing strategies designed to navigate this environment, including disciplined overhead management, prudent land acquisition and development spending, pricing discipline, and the selective use of sales incentives, including mortgage interest rate buydowns, to improve affordability, support demand, increase sales activity, and reduce contract cancellations.

Previous wording

Despite these challenges, we believe the long-term fundamentals supporting the housing market remain favorable. Demand continues to be driven by demographic trends, household formation, and an undersupply of both new and existing homes, particularly in the affordable housing segment. We also believe that any future moderation in mortgage interest rates could improve affordability and further support housing demand. However, the timing and magnitude of such changes remain uncertain and will depend on economic conditions, monetary policy, capital markets, and geopolitical developments. Additionally, housing affordability and supply remain important policy priorities at the federal level, with continued focus on initiatives intended to expand housing availability and improve access to homeownership.

Current wording

Despite these challenges, we believe the long-term fundamentals supporting the housing market remain favorable. Demand continues to be driven by demographic trends, household formation, and an undersupply of both new and existing homes, particularly in the affordable housing segment. While a future decline in mortgage interest rates could improve affordability and further support housing demand, rates increased in recent months, creating additional headwinds for prospective homebuyers. The timing and magnitude of any future improvement in mortgage interest rates remain uncertain and will depend on economic conditions, monetary policy, capital markets, and geopolitical developments. Additionally, housing affordability and supply remain important policy priorities at the federal level, with continued focus on initiatives intended to expand housing availability and improve access to homeownership.

Previous wording

We believe we are well positioned to operate successfully in the current environment. Although our backlog at the end of the second quarter of 2026 was lower than the prior-year period, it remained healthy, with an average sales price approximately 3% below the comparable prior-year level, reflecting our continued focus on affordability. Our strong balance sheet, liquidity, and disciplined capital allocation provide the financial flexibility to respond to changing market conditions and pursue opportunities as they arise. Nevertheless, the operating environment remains dynamic, and our future performance will depend on our ability to adapt to evolving economic and market conditions. Accordingly, there can be no assurance that our current strategies will fully offset the effects of continued market volatility and uncertainty.

Current wording

We believe our well-located communities and diverse product offerings position us to operate successfully in the current environment. Although our backlog at the end of the third quarter of 2026 was lower than the prior-year period, it remained healthy, with an average sales price approximately 3% below the comparable prior-year level, reflecting our continued focus on affordability. Our strong balance sheet, liquidity, and disciplined capital allocation provide the financial flexibility to respond to changing market conditions and pursue opportunities as they arise. Nevertheless, the operating environment remains dynamic, particularly as increasing mortgage interest rates and ongoing economic uncertainty continue to affect consumer behavior. Our future performance will depend on our ability to adapt to evolving market conditions. Accordingly, there can be no assurance that our current strategies will fully offset the effects of continued market volatility, rising borrowing costs, and broader economic uncertainty.

Previous wording

During the first six months of 2026, we invested$210.3 million in land acquisitions and$259.1 million in land development compared to $247.7 million and $240.6 million, respectively, during the first six months of 2025. We invested infewer land acquisitions in the first half of 2026 compared to the first half of 2025 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.

Current wording

During the nine months ended September 30, 2026, we invested$345.5 million in land acquisitions and$413.5 million in land development compared to $363.1 million and $421.9 million, respectively, during the nine months ended September 30, 2025. We invested less in land acquisitions in the nine months ended September 30, 2026 compared to the first nine months of 2025 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 2026 with approximately 49,100 lots under control, which represents an approximately five-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 50,500 lots under control at the end of last year’s second quarter.

Current wording

We ended the third quarter of 2026 with approximately 48,900 lots under control, which represents an approximately five-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 50,600 lots under control at the end of last year’s third quarter.

Previous wording

We opened 49 communities and closed 47 communities in the first half of 2026, ending the second quarter with 234 active communities, the same as 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% in 2026 compared to 2025.

Current wording

We opened 76 communities and closed 62 communities in the nine months ended September 30, 2026, ending the third quarter with 246 active communities, compared to 233 in 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 year-emd community count by approximately 5% in 2026 compared to 2025.

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, 2026 and 2025:

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, 2026 and 2025:

Previous wording

(b)For the three and six months ended June 30, 2026, total cost of sales and operating income were impacted by $4.2 million in inventory charges taken during the period. $0.4 million and $3.8 million of these charges were attributable to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively. Additionally, total cost of sales and operating income in the Southern homebuilding operating segment were impacted by $4.0 million and $5.5 million, respectively, for warranty charges in two of our Florida communities primarily relating to attic ventilation issues (See Note 6).

Current wording

(b)For the three and nine months ended September 30, 2026, total cost of sales and operating income were impacted by $4.7 million and $8.9 million in inventory charges taken during the period, respectively. $0.6 million and $1.0 million of these charges were attributable to the Northern homebuilding operating segment and $4.1 million and $7.9 million were attributable to the Southern homebuilding operating segment, respectively. This compares to $7.6 million in inventory charges taken during the quarter ended September 30, 2025. $1.3 million and $6.3 million of those charges were attributed to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively. Additionally, for the three and nine months ended September 30, 2026, total cost of sales and operating income in the Southern homebuilding operating segment were impacted by $1.7 million and $7.2 million, respectively, for warranty charges in two of our Florida communities primarily relating to attic ventilation issues (See Note 6).

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, 2026 and 2025:

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, 2026 and 2025:

Previous wording

(b)Includes $4.2 million in inventory charges taken during the period. $0.4 million and $3.8 million of these charges were attributable to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively. Additionally, total cost of sales and operating income in the Southern homebuilding operating segment were impacted by $4.0 million and $5.5 million, respectively, for warranty charges in two of our Florida communities primarily relating to attic ventilation issues (See Note 6).

Current wording

(b)For the three and nine months ended September 30, 2026, total cost of sales and operating income were impacted by $4.7 million and $8.9 million in inventory charges taken during the period, respectively. $0.6 million and $1.0 million of these charges were attributable to the Northern homebuilding operating segment and $4.1 million and $7.9 million were attributable to the Southern homebuilding operating segment, respectively. This compares to $7.6 million in inventory charges taken during the quarter ended September 30, 2025. $1.3 million and $6.3 million of those charges were attributed to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively. Additionally, for the three and nine months ended September 30, 2026, total cost of sales and operating income in the Southern homebuilding operating segment were impacted by $1.7 million and $7.2 million, respectively, for warranty charges in two of our Florida communities primarily relating to attic ventilation issues (See Note 6).

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, 2026 and 2025:

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, 2026 and 2025:

Previous wording

Northern Region. During the three months ended June 30, 2026, revenue in our Northern region decreased $35.7 million, from $488.3 million in the second quarter of 2025 to $452.6 million in the second quarter of 2026. This decrease in revenue was primarily the result of an 8% decrease in the number of homes delivered, partially offset by a 1% increase in the average sales price of homes delivered. Operating income in our Northern region decreased $17.8 million from $76.0 million in the second quarter of 2025 to $58.2 million during the quarter ended June 30, 2026. This decrease in operating income was the result of a $15.5 million decline in our gross margin and a $2.3 million increase in selling, general and administrative expense. Our gross margin percentage declined 160 basis points to 21.2% from 22.8% in the prior year’s second quarter primarily due to an increase in homebuyer incentives and a $7.0 million increasein lot costs compared to prior year. The average sales price in 2026 reflects a reduction of $8,600 per home when compared to 2025 due to increased homebuyer incentive costs including mortgage interest rate buydowns.

Current wording

Northern Region. During the three months ended September 30, 2026, revenue in our Northern region decreased $4.6 million, from $487.9 million in the third quarter of 2025 to $483.3 million in the third quarter of 2026. This decrease in revenue was primarily the result of a 2% decrease in the average sales price of homes delivered, partially offset by a 1% increase in the number of homes delivered. Operating income in our Northern region decreased $19.2 million from $77.4 million in the third quarter of 2025 to $58.2 million during the quarter ended September 30, 2026. This decrease in operating income was the result of a $15.2 million decline in our gross margin and a $4.0 million increase in selling, general and administrative expense. Our gross margin percentage declined 290 basis points to 20.1% from 23.0% in the prior year’s third quarter primarily due to an increase in homebuyer incentives and an $8.1 million increasein lot costs compared to prior year. The average sales price in the third quarter of 2026 reflects a reduction of $13,800 per home when compared to 2025 due to increased homebuyer incentive costs including mortgage interest rate buydowns.

Previous wording

Selling, general and administrative expense increased $2.3 million, from $35.3 million for the quarter ended June 30, 2025 to $37.6 million for the quarter ended June 30, 2026 and increased 110 basis points as a percentage of revenue to 8.3% in 2026's second quarter from 7.2% in 2025's second quarter. The increase in selling, general and administrative expense was attributable to a $0.9 million increase in general and administrative expense and a $1.4 million increase in selling expense. The increase in general and administrative expense was due to a $0.6 million increase in compensation-related expenses and a $0.3 million increase in miscellaneous expense, including costs associated with research, design and development. The increase in selling expense was due to a $0.5 million increase in advertising expense, a $0.4 million increase in expenses related to our model homes and a $0.5 million increase in costs associated with our sales offices, including compensation-related expenses.

Current wording

8.1% in 2026's third quarter from 7.2% in 2025's third quarter. The increase in selling, general and administrative expense was attributable to a $1.4 million increase in general and administrative expense and a $2.6 million increase in selling expense. The increase in general and administrative expense was due to a $0.9 million increase in compensation-related expenses and a $0.5 million increase in land related expenses. The increase in selling expense was due to a $1.1 million increase in sales and realtor commissions, a $0.4 million increase in advertising expense, a $0.6 million increase in expenses related to our model homes and related compensation expenses and a $0.5 million increase in employee training investments.

Previous wording

During the three months ended June 30, 2026, we experienced a 16% increase in new contracts in our Northern region from 873 in the second quarter of 2025 to 1,016 in the second quarter of 2026. Homes in backlog decreased 4% from 1,281 homes at June 30, 2025 to 1,234 homes at June 30, 2026 as a result ofmore inventory homes sold in the second quarter of 2026 compared to prior year. The average sales price in backlog increased approximately 1% to $567,000 at June 30, 2026 compared to $563,000 at June 30, 2025 primarily due to the mix of homes being sold. During the three months ended June 30, 2026, we opened twelve new communities in our Northern region compared to opening eight during 2025's second quarter. Our monthly absorption rate in our Northern region was 3.7 per community in the second quarter of 2026 compared to 3.0 in the second quarter of 2025 due to an increase in new contracts and a decrease in average community count.

Current wording

During the three months ended September 30, 2026, we experienced a 1% increase in new contracts in our Northern region from 742 in the third quarter of 2025 to 746 in the third quarter of 2026. Homes in backlog decreased 5% from 1,081 homes at September 30, 2025 to 1,031 homes at September 30, 2026 as a result ofmore inventory homes sold in the third quarter of 2026 compared to prior year. The average sales price in backlog increased approximately 2% to $577,000 at September 30, 2026 compared to $563,000 at September 30, 2025 primarily due to the mix of homes being sold. During the three months ended September 30, 2026, we opened fourteen new communities in our Northern region compared to opening four during 2025's third quarter. Our monthly absorption rate in our Northern region was 2.5 per community in both the third quarter of 2026 and in the third quarter of 2025.

Previous wording

Southern Region. During the three month period ended June 30, 2026, revenue in our Southern region decreased $64.6 million, from $642.9 million in the second quarter of 2025 to $578.3 million in the second quarter of 2026. This 10% decrease in revenue was the result of an 8% decrease in the average sales price of homes delivered ($37,000 per home delivered) and a 5% decrease in the number of homes delivered (67 units), offset in part by a $15.6 million increase in land sale revenue. Operating income in our Southern region decreased $34.4 million from $84.3 million in the second quarter of 2025 to $49.9 million in the second quarter of 2026. This decrease in operating income was the result of a $36.5 million decline in our gross margin, partially offset by a $2.1 million decrease in selling, general, and administrative expense. Our gross margin percentage declined 380 basis points from 22.4% in prior year’s second quarter to 18.6% in the second quarter of 2026. The decline in our homebuilding gross margin was primarily due to the decrease in the number of homes delivered, a decrease in the average sales price of homes delivered, and a $1.8 million increase in lot costs offset in part by increase in land sales. Increased homebuyer incentive costs, including mortgage interest rate buydowns, decreased the average sales price of homes delivered by $8,500 per home when compared to 2025.

Current wording

Southern Region. During the three months ended September 30, 2026, revenue in our Southern region decreased $49.2 million, from $609.2 million in the third quarter of 2025 to $560.0 million in the third quarter of 2026. This 8% decrease in revenue was the result of a 5% decrease in the average sales price of homes delivered ($24,000 per home delivered) and a 5% decrease in the number of homes delivered (62 units), offset in part by a $10.4 million increase in land sale revenue. Operating income in our Southern region decreased $26.8 million from $62.9 million in the third quarter of 2025 to $36.1 million in the third quarter of 2026. This decrease in operating income was the result of a $28.5 million decline in our gross margin, partially offset by a $1.7 million decrease in selling, general, and administrative expense. Our gross margin percentage declined 330 basis points from 20.2% in prior year’s third quarter to 16.9% in the third quarter of 2026. The decline in our homebuilding gross margin was primarily due to the decrease in the number of homes delivered, and a decrease in the average sales price of homes delivered, offset in part by a $2.1 million decrease in lot costs and an increase in land sales. Increased homebuyer incentive costs, including mortgage interest rate buydowns, decreased the average sales price of homes delivered by $6,300 per home when compared to 2025.

Previous wording

Selling, general and administrative expense decreased $2.1 million from $59.6 million in the second quarter of 2025 to $57.5 million in the second quarter of 2026 but increased 60 basis points as a percentage of revenue to 9.9% in the second quarter of 2026 from 9.3% in the second quarter of 2025. The decrease in selling, general and administrative expense was attributable to a $1.2 million decrease in selling expense and a $0.9 million decrease in general administrative expense. The decrease in selling expense was due to a $2.9 million decrease in realtor and sales commissions, partially offset by a $1.7 million increase in costs related to our sales office, including compensation and advertising expenses. The decrease in general and administrative expense was due to a $0.6 million decrease in compensation-related expenses, and a $0.3 million decrease of miscellaneous expenses.

Current wording

Selling, general and administrative expense decreased $1.7 million from $60.2 million in the third quarter of 2025 to $58.5 million in the third quarter of 2026 but increased 50 basis points as a percentage of revenue to 10.4% in the third quarter of 2026 from 9.9% in the third quarter of 2025. The decrease in selling, general and administrative expense was attributable to a $2.1 million decrease in selling expense, partially offset by a $0.4 million increase in general and administrative expense. The decrease in selling expense was due to a $4.0 million decrease in realtor and sales commissions, partially offset by a $1.9 million increase in costs related to our sales offices, including compensation and advertising expenses. The increase in general and administrative expense was due to a $0.4 million increase in land-related expenses.

Previous wording

During the three months ended June 30, 2026, our new contracts in our Southern region increased 14% from 1,205 in the second quarter of 2025 to 1,371 in the second quarter of 2026. Homes in backlog decreased by 8% from 1,296 homes at June 30, 2025 to 1,192 homes at June 30, 2026, primarily as a result of a shift in demand to inventory homes which offer incentives compared to last year offset in part by improved sales in current quarter. Average sales price in backlog decreased to $508,000 at June 30, 2026 from $543,000 at June 30, 2025 primarily due to the mix of homes being sold, including an increase in inventory homes. During the three months ended June 30, 2026, we opened 15 new communities in our Southern region compared to opening 15 communities during 2025's second quarter. Our monthly absorption rate in our Southern region improved to 3.3 per community in the second quarter of 2026 from 3.1 in the second quarter of 2025.

Current wording

During the three months ended September 30, 2026, our new contracts in our Southern region decreased 4% from 1,166 in the third quarter of 2025 to 1,115 in the third quarter of 2026. Homes in backlog decreased by 8% from 1,108 homes at September 30, 2025 to 1,015 homes at September 30, 2026, primarily as a result of a shift in demand to inventory homes which offer incentives compared to last year. Average sales price in backlog decreased to $501,000 at September 30, 2026 from $544,000 at September 30, 2025 primarily due to the mix of homes being sold. During the three months ended September 30, 2026, we opened 13 new communities in our Southern region compared to opening 10 communities during 2025's third quarter. Our monthly absorption rate in our Southern region declined to 2.6 per community in the third quarter of 2026 from 2.9 in the third quarter of 2025 due to the decrease in homes sold and increase in communities.

Previous wording

Financial Services. Revenue from our mortgage and title operations increased 3% to $32.3 million in the second quarter of 2026 from $31.5 million in the second quarter of 2025 due to higher margins on loans sold, an increase in the average loan amount from $403,000 in the quarter ended June 30, 2025 to $405,000 in the quarter ended June 30, 2026 and ahigher capture rate during the period compared to prior year’s second quarter, partially offset by a 3% decrease in the number of loan originations from 1,865 in 2025's second quarter to 1,817 in the second quarter of 2026.

Current wording

Financial Services. Revenue from our mortgage and title operations decreased 5% to $32.7 million in the third quarter of 2026 from $34.6 million in the third quarter of 2025 due to lower margins on loans sold, a decrease in the average loan amount from $406,000 in the quarter ended September 30, 2025 to $403,000 in the quarter ended September 30, 2026, and a 1% decrease in the number of loan originations from 1,848 in 2025's third quarter to 1,835 in the third quarter of 2026, offset in part by a higher capture rate during the period compared to prior year’s third quarter.

Previous wording

Our financial services segment experienced a $0.5 million decrease in operating income in the second quarter of 2026 compared to 2025's second quarter, which was primarily due to a $1.4 million increase in general and administrative expense, which was primarily the result of a $0.9 million increase in compensation-related expenses, and a $0.5 million increase in miscellaneous expenses relating to information systems compared to the second quarter of 2025.

Current wording

Our financial services segment experienced a $3.9 million decrease in operating income in the third quarter of 2026 compared to 2025's third quarter, which was primarily due to lower revenue and a $2.0 million increase in general and administrative expense, which was primarily the result of a $0.7 million increase in compensation-related expenses, and a $1.3 million increase in miscellaneous expenses relating to information systems and costs for financial services compared to the third quarter of 2025.

Previous wording

At June 30, 2026, M/I Financial provided financing services in all of our markets. Approximately 96% of our homes delivered during the second quarter of 2026 were financed through M/I Financial, compared to approximately 92% in the second quarter of 2025. 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, 2026, M/I Financial provided financing services in all of our markets. Approximately 96% of our homebuyers who obtained mortgage financing for homes delivered during the third quarter of 2026 financed their purchases through M/I Financial, compared to approximately 93% in the third quarter of 2025. 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 increased $1.7 million from $22.1 million for the second quarter of 2025 to $23.8 million for the second quarter of 2026. This increase resulted from a $0.3 million increase in compensation-related expenses, a $0.3 million increase in depreciation, a $0.3 million increase in computer related expense, a $0.3 million increase in advertising expenses and a $0.5 million increase in miscellaneous expenses.

Current wording

Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense increased $2.0 million from $25.0 million for the third quarter of 2025 to $27.0 million for the third quarter of 2026. This increase resulted from a $0.3 million increase in compensation-related expenses, a $0.6 million increase in depreciation, a $0.7 million increase in computer related expense, a $0.2 million increase in advertising expenses and a $0.2 million increase in miscellaneous expenses.

Previous wording

Interest Income, net of Interest Expense. The Company earned $3.3 million of interest income - net for the three months ended June 30, 2026 compared to $4.4 million for the three months ended June 30, 2025. This decrease was primarily due to alower average cash balance on hand compared to prior year.

Current wording

Interest Income, net of Interest Expense. The Company earned $3.6 million of interest income - net for the three months ended September 30, 2026 compared to $4.5 million for the three months ended September 30, 2025. This decrease was primarily due to alower average cash balance on hand compared to prior year.

Previous wording

Income Taxes. Our overall effective tax rate was 24.2% for the six months ended June 30, 2026 and 24.1% for the six months ended June 30, 2025. The increase in the effective rate from the six months ended June 30, 2025 was primarily attributable to a $1.0 million decrease in tax benefit from equity compensation in 2026.

Current wording

Income Taxes. Our overall effective tax rate was 23.4% for the three months ended September 30, 2026 and 23.8% for the three months ended September 30, 2025. The decrease in the effective rate from the three months ended September 30, 2025 was primarily attributable to a $0.7 million increase in tax benefit from equity compensation in 2026.

Previous wording

Northern Region. During the first half of 2026, homebuilding revenue in our Northern region decreased $69.1 million, from $898.6 million in the first six months of 2025 to $829.5 million in the first six months of 2026. This 8% decrease in revenue was primarily the result of a $2.3 million decrease in land sale revenue and an 8% decrease in the number of homes delivered, partially offset by an increase in the average sales price of homes delivered ($5,000 per home delivered). Operating income in our Northern region decreased $35.5 million, from $136.6 million during the first half of 2025 to $101.1 million during the six months ended June 30, 2026. The decrease in operating income was primarily the result of a $33.0 million decrease in our gross margin and a $2.5 million increase in selling, general and administrative expense. Our gross margin declined $33.0 million, and our gross margin percentage declined 210 basis points from 22.5% in the first six months of 2025 to 20.4% for the same period in 2026, primarily due to a decrease in the number of homes delivered, a $9.1 million increase in lot costs and a decrease in land sales. The average sales price in 2026 reflects a reduction of $8,600 per home when compared to 2025 due to increased homebuyer incentive costs including mortgage interest rate buydowns.

Current wording

Northern Region. During the nine months ended September 30, 2026, homebuilding revenue in our Northern region decreased $73.7 million, from $1.39 billion in the nine months ended September 30, 2025 to $1.31 billion in the nine months ended September 30, 2026. This 5% decrease in revenue was primarily the result of a $2.4 million decrease in land sale revenue and a 5% decrease in the number of homes delivered. Operating income in our Northern region decreased $54.7 million, from $214.0 million during the nine months ended September 30, 2025 to $159.3 million during the nine months ended September 30, 2026. The decrease in operating income was primarily the result of a $48.2 million decrease in our gross margin and a $6.5 million increase in selling, general and administrative expense. Our gross margin declined $48.2 million, and our gross margin percentage declined 240 basis points from 22.7% in the nine months ended September 30, 2025 to 20.3% for the same period in 2026, primarily due to a decrease in the number of homes delivered, a $17.1 million increase in lot costs and a decrease in land sales. The average sales price in 2026 reflects a reduction of $10,600 per home when compared to 2025 due to increased homebuyer incentive costs including mortgage interest rate buydowns.