HORTON D R INC /DE/
For the period ended Mar 31, 2026. Filed Apr 23, 2026.
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.
Mar 31, 2026 · Filed Apr 23, 2026
DHI$152.28-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-01-22.
0000882184-26-000014
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-23.
0000882184-26-000081
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe 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 248 previous paragraphs and 286 current paragraphs.
130 unchanged; 95 reworded; 56 added; 23 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 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 (56)
Current report
•Executing sales and marketing strategies to drive traffic, generate demand and optimize sales pace across our communities.
Current report
•Consolidated revenues decreased 2% to $7.6 billion compared to $7.7 billion.
Current report
•Consolidated pre-tax income decreased 19% to $867.4 million compared to $1.1 billion.
Current report
•Net income attributable to D.R. Horton decreased 20% to $647.9 million compared to $810.4 million.
Current report
•Net income per diluted share attributable to D.R. Horton decreased 13% to $2.24 compared to $2.58.
Current report
•Homes closed increased 1% to 19,486 homes, while the average closing price of those homes decreased 3% to $361,600.
Current report
•Net sales orders increased 11% to 24,992 homes, and the value of net sales orders increased 10% to $9.2 billion.
Current report
•Home sales gross margin was 20.1% compared to 21.8%.
Current report
•Homebuilding SG&A expense was 9.2% of homebuilding revenues compared to 8.9%.
Current report
•Homebuilding pre-tax income decreased 19% to $757.9 million compared to $935.0 million.
Current report
•Homebuilding pre-tax income was 10.7% of homebuilding revenues compared to 13.0%.
Current report
•Homebuilding debt was $3.4 billion compared to $3.2 billion and $3.1 billion at September 30, 2025 and March 31, 2025, respectively.
Current report
•Rental revenues were $211.8 million compared to $236.6 million.
Current report
•Multi-family rental units closed totaled 216 compared to 300.
Current report
•Rental pre-tax income was $12.3 million compared to $22.8 million.
Current report
•Forestar’s pre-tax income increased 8% to $43.9 million compared to $40.7 million.
Current report
•Forestar’s pre-tax income was 11.7% of revenues compared to 11.6%.
Current report
•Financial services revenues decreased 9% to $192.8 million compared to $212.9 million.
Current report
•Financial services pre-tax income decreased 29% to $51.7 million compared to $73.0 million.
Current report
•Financial services pre-tax income was 26.8% of financial services revenues compared to 34.3%.
Current report
Consolidated Results:
Current report
•Consolidated revenues decreased 6% to $14.4 billion compared to $15.3 billion.
Current report
•Consolidated pre-tax income decreased 24% to $1.7 billion compared to $2.2 billion.
Current report
•Consolidated pre-tax income was 11.5% of consolidated revenues compared to 14.2%.
Current report
•Income tax expense was $406.0 million compared to $506.0 million, and our effective tax rate was 24.4% compared to 23.2%.
Current report
•Net income attributable to D.R. Horton decreased 25% to $1.2 billion compared to $1.7 billion.
Current report
•Net income per diluted share attributable to D.R. Horton decreased 18% to $4.27 compared to $5.19.
Current report
•Net cash provided by operations was $441.5 million compared to $210.5 million.
Current report
Homebuilding:
Current report
•Homebuilding revenues decreased 5% to $13.6 billion compared to $14.4 billion.
Current report
•Net sales orders increased 7% to 43,292 homes, and the value of net sales orders increased 5% to $15.8 billion.
Current report
•Home sales gross margin was 20.3% compared to 22.3%.
Current report
•Homebuilding SG&A expense was 9.4% of homebuilding revenues compared to 8.9%.
Current report
•Homebuilding pre-tax income decreased 25% to $1.5 billion compared to $1.9 billion.
Current report
•Net cash provided by homebuilding operations was $618.8 million compared to $876.0 million.
Current report
Rental:
Current report
•Rental revenues were $321.3 million compared to $454.3 million.
Current report
•Single-family rental homes closed totaled 963 compared to 830.
Current report
•Multi-family rental units closed totaled 216 compared to 804.
Current report
•Rental pre-tax income was $12.5 million compared to $34.7 million.
Showing the first 40 of 56 passages. Open the source sections for the rest.
Removed paragraphs (23)
Previous report
•Consolidated revenues decreased 10% to $6.9 billion compared to $7.6 billion.
Previous report
•Consolidated pre-tax income decreased 28% to $798.1 million compared to $1.1 billion.
Previous report
•Net income attributable to D.R. Horton decreased 30% to $594.8 million compared to $844.9 million.
Previous report
•Net income attributable to D.R. Horton per diluted share decreased 22% to $2.03 compared to $2.61.
Previous report
•Net sales orders increased 3% to 18,300 homes, and the value of net sales orders was $6.7 billion in both periods.
Previous report
•Home sales gross margin was 20.4% compared to 22.7%.
Previous report
•Homebuilding SG&A expense was 9.7% of homebuilding revenues compared to 8.9%.
Previous report
•Homebuilding pre-tax income decreased 30% to $708.1 million compared to $1.0 billion.
Previous report
•Homebuilding debt was $3.2 billion at both December 31, 2025 and September 30, 2025 compared to $2.4 billion at December 31, 2024.
Previous report
•Rental revenues were $109.5 million compared to $217.8 million.
Previous report
•There were no multi-family rental units closed compared to 504.
Previous report
•Rental pre-tax income was $0.2 million compared to $11.9 million.
Previous report
•Forestar’s pre-tax income was $20.8 million compared to $21.9 million.
Previous report
•Forestar’s pre-tax income was 7.6% of revenues compared to 8.7%.
Previous report
•Financial services revenues increased 1% to $184.6 million compared to $182.3 million.
Previous report
•Financial services pre-tax income was $58.0 million compared to $48.6 million.
Previous report
•Financial services pre-tax income was 31.4% of financial services revenues compared to 26.7%.
Previous report
Homebuilding SG&A expense decreased 1% to $632.5 million in the three months ended December 31, 2025 from $636.6 million in the prior year period. As a percentage of homebuilding revenues, SG&A expense increased to 9.7% in the three months ended December 31, 2025 from 8.9% in the prior year period, due to the decrease in homebuilding revenues.
Previous report
North Region — Homebuilding revenues increased 5% in the three months ended December 31, 2025 compared to the prior year period, primarily due to an increase in the number of homes closed, particularly in our Pittsburgh market. The region generated pre-tax income of $119.9 million in the three months ended December 31, 2025 compared to $129.8 million in the prior year period. Home sales gross profit percentage decreased by 130 basis points in the three months ended December 31, 2025 compared to the prior year period, primarily due to the average cost of homes closed increasing, while the average selling price of those homes decreased slightly. As a percentage of homebuilding revenues, SG&A expenses increased by 10 basis points in the three months ended December 31, 2025 compared to the prior year period.
Previous report
Revenues from our rental operations decreased to $109.5 million during the three months ended December 31, 2025 from $217.8 million in the prior year period, and pre-tax income decreased to $0.2 million from $11.9 million. The decline in pre-tax income was due to a decrease in multi-family revenues in the current quarter due to no units closed.
Previous report
Total loan origination volume decreased 7% in the three months ended December 31, 2025, while revenues from our mortgage operations increased 3% to $143.7 million from $139.7 million in the prior year period. Revenues from our title operations decreased 4% to $40.9 million in the three months ended December 31, 2025 from $42.6 million in the prior year period, primarily due to a decrease in transactions closed through our title operations.
Previous report
Cash and Cash Equivalents — At December 31, 2025, cash and cash equivalents of our homebuilding segment totaled $1.9 billion.
Previous report
Cash provided by a decrease in construction in progress and finished home inventory was $398.8 million in the current year period, primarily reflecting a decrease in our completed homes in inventory in the current period. Cash used to increase residential land and lots was $489.1 million in the current year period compared to $1.2 billion in the prior year period.
Reworded paragraphs (95)
Previous wording
Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Homebuilding is our core business and primarily includes the construction and sale of single-family homes with sales prices generally ranging from $250,000 to more than $1,000,000, with an average closing price of $365,500 during the three months ended December 31, 2025. Approximately 84% of our home sales revenue in the three months ended December 31, 2025 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes and duplexes.
Current wording
Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Homebuilding is our core business and primarily includes the construction and sale of single-family homes with sales prices generally ranging from $200,000 to more than $1,000,000, with an average closing price of $363,500 during the six months ended March 31, 2026. Approximately 85% of our home sales revenue in the six months ended March 31, 2026 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes and duplexes.
Previous wording
During the three months ended December 31, 2025, our number of homes closed and our home sales revenues decreased 7% and 9%, respectively, compared to the prior year period, and our consolidated revenues decreased 10% to $6.9 billion compared to $7.6 billion. Our pre-tax income was $798.1 million in the three months ended December 31, 2025 compared to $1.1 billion in the prior year period, and our pre-tax operating margin was 11.6% compared to 14.6%. Net income was $601.4 million in the three months ended December 31, 2025 compared to $851.9 million in the prior year period, and our diluted earnings per share were $2.03 compared to $2.61.
Current wording
During the six months ended March 31, 2026, our number of homes closed and home sales revenues decreased 3% and 5%, respectively, compared to the prior year period, and consolidated revenues decreased 6% to $14.4 billion compared to $15.3 billion. Our pre-tax income was $1.7 billion in the six months ended March 31, 2026 compared to $2.2 billion in the prior year period, and pre-tax operating margin was 11.5% compared to 14.2%. Net income was $1.3 billion in the six months ended March 31, 2026 compared to $1.7 billion in the prior year period, and diluted earnings per share were $4.27 compared to $5.19.
Previous wording
In the trailing twelve months ended December 31, 2025, our return on equity (ROE) was 13.7% compared to 19.1% in the prior year period, and our return on assets (ROA) was 9.4% compared to 13.4%. ROE is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances for the trailing five quarters divided by five. ROA is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average consolidated assets, where average consolidated assets is the sum of total asset balances for the trailing five quarters divided by five.
Current wording
In the trailing twelve months ended March 31, 2026, our return on equity (ROE) was 13.2% compared to 17.4% in the prior year period, and return on assets (ROA) was 8.9% compared to 12.2%. ROE is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances for the trailing five quarters divided by five. ROA is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average consolidated assets, where average consolidated assets is the sum of total asset balances for the trailing five quarters divided by five.
Previous wording
During the first quarter, new home demand continued to be impacted by ongoing affordability constraints and cautious consumer sentiment. Compared to the prior year quarter, our net sales orders were up 3%, the value of net sales orders was essentially flat, and home sales revenues decreased by 9%. Home sales gross margin decreased to 20.4% in the first quarter from the prior year quarter as we increased sales incentives, such as buydowns of mortgage rates for our homebuyers. We strive to remain well positioned with affordable product offerings and a flexible lot supply and will continue to manage our home pricing, sales incentives and number of homes in inventory based on the level of demand in each of our local markets. We expect to maintain an elevated level of sales incentives to support demand and may increase them further, depending on market conditions and changes in mortgage interest rates.
Current wording
During the second quarter, new home demand continued to be impacted by affordability constraints and cautious consumer sentiment. Despite these conditions, our net sales orders increased 11% compared to the prior year quarter, and the value of net sales orders increased 10%, reflecting the focus of our operations on disciplined execution across our markets. Home sales revenues decreased 2% compared to the prior year quarter. Home sales gross margin was 20.1% for the second quarter, compared to 21.8% in the prior year quarter, reflecting the decline in our average sales price and higher sales incentives, including mortgage interest rate buydowns offered to support affordability for our homebuyers. We remain well positioned with our affordable product offerings and controlled lot supply, and we continue to manage home pricing, sales incentives and inventory levels based on demand within our local markets. We currently expect sales incentives to remain elevated and may adjust incentive levels further depending on changes in market conditions and mortgage interest rates.
Previous wording
We remain focused on our relationships with land developers across the country to maximize returns and capital efficiency. Within our homebuilding land and lot portfolio, lots controlled through purchase contracts represented 75% of the lots owned and controlled at both December 31, 2025 and September 30, 2025 and 76% at December 31, 2024. We continue to prioritize the purchase of finished lots from Forestar and other land developers when possible. During the three months ended December 31, 2025, 67% of the homes we closed were on lots developed by either Forestar or a third party compared to 65% in the prior year period.
Current wording
We remain focused on our relationships with land developers across the country to maximize returns and capital efficiency. Within our homebuilding land and lot portfolio, lots controlled through purchase contracts represented 77% of the lots owned and controlled at March 31, 2026 compared to 75% at both September 30, 2025 and March 31, 2025. We continue to prioritize the purchase of finished lots from Forestar and other land developers when possible. During the six months ended March 31, 2026, 67% of the homes we closed were on lots developed by either Forestar or a third party compared to 65% in the prior year period.
Previous wording
We believe our strong balance sheet and liquidity provide us with flexibility to operate effectively through changing economic conditions. We plan to generate strong cash flows from our operations and manage our product offerings, incentives, home pricing, sales pace and inventory levels to optimize the return on our inventory investments in each of our communities based on local housing market conditions.
Current wording
We believe our strong balance sheet and liquidity provide us with flexibility to operate effectively through changing economic conditions. We plan to continue to generate strong cash flows from our operations and manage our product offerings, incentives, home pricing, sales pace and inventory levels to optimize the return on our inventory investments in each of our communities based on local housing market conditions.
Previous wording
•Improving the efficiency of our land development, construction, sales and other key operational activities.
Current wording
•Improving the efficiency of our land development, construction and other key operational activities.
Previous wording
•Consolidated pre-tax income was 11.6% of consolidated revenues compared to 14.6%.
Current wording
•Consolidated pre-tax income was 11.5% of consolidated revenues compared to 13.8%.
Previous wording
•Income tax expense was $196.7 million compared to $258.0 million, and our effective tax rate was 24.6% compared to 23.2%.
Current wording
•Income tax expense was $209.4 million compared to $248.0 million, and our effective tax rate was 24.1% compared to 23.2%.
Previous wording
•Stockholders’ equity was $24.0 billion compared to $24.2 billion and $24.9 billion at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Stockholders’ equity was $23.6 billion compared to $24.2 billion and $24.3 billion at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Book value per share increased to $82.60 compared to $82.15 and $78.53 at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Book value per share increased to $82.91 compared to $82.15 and $78.82 at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Debt to total capital was 18.8% compared to 19.8% and 17.0% at September 30, 2025 and December 31, 2024, respectively. Net debt to total capital was 11.2% compared to 11.0% and 7.6% at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Debt to total capital was 21.7% compared to 19.8% and 21.1% at September 30, 2025 and March 31, 2025, respectively. Net debt to total capital was 16.4% compared to 11.0% and 14.3% at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Homebuilding revenues decreased 9% to $6.5 billion compared to $7.2 billion.
Current wording
•Homebuilding revenues decreased 2% to $7.1 billion compared to $7.2 billion.
Previous wording
•Sales order backlog increased 3% to 11,376 homes, and the value of sales order backlog was $4.3 billion in both periods.
Current wording
•Sales order backlog increased 19% to 16,882 homes, and the value of sales order backlog increased 17% to $6.4 billion.
Previous wording
•Homebuilding cash and cash equivalents totaled $1.9 billion compared to $2.2 billion and $2.5 billion at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Homebuilding cash and cash equivalents totaled $1.1 billion compared to $2.2 billion and $1.9 billion at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Homebuilding inventories totaled $20.2 billion compared to $20.3 billion and $20.7 billion at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Homebuilding inventories totaled $21.0 billion compared to $20.3 billion and $20.9 billion at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Homes in inventory totaled 30,400 compared to 29,600 and 36,200 at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Homes in inventory totaled 38,200 compared to 29,600 and 36,900 at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Owned lots totaled 145,500 compared to 147,000 and 154,400 at September 30, 2025 and December 31, 2024, respectively. Lots controlled through purchase contracts totaled 445,000 compared to 444,900 and 485,400 at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Owned lots totaled 134,100 compared to 147,000 and 150,600 at September 30, 2025 and March 31, 2025, respectively. Lots controlled through purchase contracts totaled 441,200 compared to 444,900 and 462,500 at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Single-family rental homes closed totaled 397 compared to 311.
Current wording
•Single-family rental homes closed totaled 566 compared to 519.
Previous wording
•Rental inventory totaled $2.9 billion compared to $2.7 billion and $3.0 billion at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Rental inventory totaled $3.0 billion compared to $2.7 billion and $3.1 billion at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Forestar’s revenues increased 9% to $273.0 million compared to $250.4 million. Revenues in the current and prior year quarters included $183.7 million and $218.6 million, respectively, of revenue from land and lot sales to our homebuilding segment.
Current wording
•Forestar’s revenues increased 7% to $374.3 million compared to $351.0 million. Revenues in the current and prior year quarters included $295.9 million and $267.8 million, respectively, of revenue from land and lot sales to our homebuilding segment.
Previous wording
•Forestar’s lots sold decreased 17% to 1,944 compared to 2,333. Lots sold to D.R. Horton totaled 1,627 compared to 2,112.
Current wording
•Forestar’s lots sold decreased 14% to 2,938 compared to 3,411. Lots sold to D.R. Horton totaled 2,450 compared to 2,501.
Previous wording
•Forestar’s revenue from tract acres sold was $29.3 million compared to no tract acres sold in the prior year quarter.
Current wording
•Forestar’s revenue from tract acres sold was $35.6 million compared to no tract acres sold in the prior year quarter.
Previous wording
•Forestar’s cash and cash equivalents totaled $211.7 million compared to $379.2 million and $132.0 million at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Forestar’s cash and cash equivalents totaled $362.2 million compared to $379.2 million and $174.3 million at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Forestar’s inventories totaled $2.9 billion compared to $2.6 billion and $2.7 billion at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Forestar’s inventories totaled $2.7 billion compared to $2.6 billion and $2.8 billion at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Forestar’s owned and controlled lots totaled 101,000 compared to 99,800 and 106,000 at September 30, 2025 and December 31, 2024, respectively. Of these lots, 40,700 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 40,400 and 43,800 at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Forestar’s owned and controlled lots totaled 94,400 compared to 99,800 and 105,900 at September 30, 2025 and March 31, 2025, respectively. Of these lots, 41,000 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 40,400 and 43,900 at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Forestar’s debt was $793.2 million compared to $802.8 million and $806.8 million at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Forestar’s debt was $793.5 million compared to $802.8 million and $872.5 million at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Forestar’s debt to total capital was 30.8% compared to 31.2% and 33.3% at September 30, 2025 and December 31, 2024, respectively. Forestar’s net debt to total capital was 24.6% compared to 19.3% and 29.5% at September 30, 2025 and December 31, 2024, respectively.
Current wording
•Forestar’s debt to total capital was 30.4% compared to 31.2% and 34.7% at September 30, 2025 and March 31, 2025, respectively. Forestar’s net debt to total capital was 19.2% compared to 19.3% and 29.8% at September 30, 2025 and March 31, 2025, respectively.
Previous wording
•Homes closed decreased 7% to 17,818 homes, and the average closing price of those homes decreased 3% to $365,500.
Current wording
•Homes closed decreased 3% to 37,304 homes, and the average closing price of those homes decreased 3% to $363,500.
Previous wording
•Homebuilding pre-tax income was 10.8% of homebuilding revenues compared to 14.1%.
Current wording
•Homebuilding pre-tax income was 10.8% of homebuilding revenues compared to 13.6%.
Previous wording
The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the three months ended December 31, 2025 and 2024.
Current wording
The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the three and six months ended March 31, 2026 and 2025.
Previous wording
The value of net sales orders was $6.66 billion (18,300 homes) for the three months ended December 31, 2025 compared to $6.65 billion (17,837 homes) in the prior year period. The slight increase in value was attributable to a 3% increase in sales order volume, offset by a 2% decrease in the average selling price.
Current wording
The value of net sales orders was $9.2 billion (24,992 homes) and $15.8 billion (43,292 homes) for the three and six months ended March 31, 2026, respectively, compared to $8.4 billion (22,437 homes) and $15.0 billion (40,274 homes) in the prior year periods. The increase in value in the three and six month periods was attributable to increases in sales order volume of 11% and 7%, respectively, while the average selling price decreased 2% in both periods.
Previous wording
In regions where sales order volume increased, the markets contributing most to the increase were the Fort Worth and Houston markets in the South Central, the Myrtle Beach market in the East and the Pittsburgh and Richmond markets in the North. In regions where sales order volume decreased, the markets contributing most to the decrease were the Seattle and Salt Lake City markets in the Northwest, the Las Vegas market in the Southwest and the Florida markets (particularly Jacksonville) in the Southeast.
Current wording
In regions where sales order volume increased, the markets contributing most to the increase were the Northern California and Phoenix markets in the Southwest, the Fort Worth, Houston and San Antonio markets in the South Central, the Tampa and Alabama markets in the Southeast, the Myrtle Beach and Atlanta markets in the East and the Pittsburgh and Ohio markets in the North. In the Northwest, the Seattle and Salt Lake City markets contributed most to the decrease in sales order volume.
Previous wording
During the first quarter, new home demand continued to be impacted by ongoing affordability constraints and cautious consumer sentiment. We remain well positioned with affordable product offerings and a flexible lot supply and will continue to manage our home pricing, sales incentives and number of homes in inventory based on the level of new home demand in each of our local markets.
Current wording
During the second quarter, new home demand continued to be impacted by affordability constraints and cautious consumer sentiment. We remain well positioned with our affordable product offerings and controlled lot supply, and we continue to manage home pricing, sales incentives and inventory levels based on demand within our local markets.
Previous wording
Revenues from home sales were $6.5 billion (17,818 homes closed) for the three months ended December 31, 2025 compared to $7.1 billion (19,059 homes closed) in the prior year period. The decrease in revenues was attributable to a 7% decrease in closings volume, along with a 3% decrease in the average selling price.
Current wording
Revenues from home sales were $7.0 billion (19,486 homes closed) and $13.6 billion (37,304 homes closed) for the three and six months ended March 31, 2026, respectively, compared to $7.2 billion (19,276 homes closed) and $14.3 billion (38,335 homes closed) in the prior year periods. The decrease in revenues in both periods was attributable to a 3% decrease in the average selling price, along with a 3% decrease in closings volume in the six month period.
Previous wording
In regions where homes closed decreased, the markets contributing most to the decrease were the Salt Lake City market in the Northwest, the Las Vegas and California markets in the Southwest, the Houston market in the South Central, the Florida markets (particularly Jacksonville and Tampa) in the Southeast and the Knoxville and Myrtle Beach markets in the East. The Pittsburgh market contributed most to the increase in the North.
Current wording
The number of homes closed increased 1% and decreased 3% in the three and six months ended March 31, 2026, respectively, compared to the prior year periods. In regions and periods where homes closed decreased, the markets contributing most to the decrease were the Seattle and Salt Lake City markets in the Northwest, the Las Vegas and Southern California markets in the Southwest and the Jacksonville and Tampa markets in the Southeast. The Pittsburgh and Southern Virginia markets contributed most to the increase in the North.
Previous wording
Gross profit from home sales decreased to $1.3 billion in the three months ended December 31, 2025 from $1.6 billion in the prior year period and decreased 230 basis points to 20.4% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 280 basis points due to the average cost of our homes closed increasing along with a decrease in the average selling price of those homes and 10 basis points due to an increase in the amortization of capitalized interest. These decreases were partially offset by an increase of 60 basis points due to the recovery of prior period warranty costs, as well as a decrease in warranty and construction defect costs incurred.
Current wording
Gross profit from home sales decreased to $1.4 billion in the three months ended March 31, 2026 from $1.6 billion in the prior year period and decreased 170 basis points to 20.1% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 200 basis points due to the average cost of our homes closed increasing along with a decrease in the average selling price of those homes and 10 basis points due to an increase in the amortization of capitalized interest. These decreases were partially offset by an increase of 40 basis points due to a favorable litigation outcome and lower warranty costs.
Previous wording
Land/lot sales and other revenues from our homebuilding operations were $16.2 million and $21.2 million in the three months ended December 31, 2025 and 2024, respectively. We continually evaluate our land and lot supply, and fluctuations in revenues and profitability from land sales occur based on how we manage our inventory levels in various markets. We generally purchase land and lots with the intent to build and sell homes on them. However, some of the land that we purchase includes commercially zoned parcels that we may sell to commercial developers. We may also sell residential lots or land parcels to manage our supply or for other strategic reasons. As of December 31, 2025, our homebuilding operations had $26.4 million of land held for sale that we expect to sell in the next twelve months.
Current wording
We continually evaluate our land and lot supply, and fluctuations in revenues and profitability from land sales occur based on how we manage our inventory levels in various markets. We generally purchase land and lots with the intent to build and sell homes on them. However, some of the land that we purchase includes commercially zoned parcels that we may sell to commercial developers. We may also sell residential lots or land parcels to manage our supply or for other strategic reasons. As of March 31, 2026, our homebuilding operations had $39.1 million of land held for sale that we expect to sell in the next twelve months.
Previous wording
At the end of each quarter, we review the performance and outlook for all of our communities and land inventories for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary. As a result of this review, there were no impairments recorded in our homebuilding segment during the three months ended December 31, 2025 compared to $2.0 million in the prior year quarter.
Current wording
At the end of each quarter, we review the performance and outlook for all of our communities and land inventories for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary. As a result of this review, there were $3.0 million of impairment charges recorded in our homebuilding segment during the three and six months ended March 31, 2026 compared to $5.4 million and $7.4 million in the respective prior year periods.
Previous wording
During the three months ended December 31, 2025, earnest money and pre-acquisition cost write-offs related to our homebuilding segment’s land purchase contracts that we have terminated or expect to terminate were $10.2 million compared to $9.8 million in the prior year period.
Current wording
During the three and six months ended March 31, 2026, earnest money and pre-acquisition cost write-offs related to our homebuilding segment’s land purchase contracts that we have terminated or expect to terminate were $22.5 million and $32.7 million, respectively, compared to $24.0 million and $33.9 million in the prior year periods.
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Current report — wording carried from elsewhere
Key financial results for the six months ended March 31, 2026, as compared to the same period of 2025, were as follows:
Current report — wording carried from elsewhere
•Forestar’s revenues increased 8% to $647.3 million compared to $601.3 million. Revenues in the current and prior year periods included $479.7 million and $486.4 million, respectively, of revenue from land and lot sales to our homebuilding segment.
Current report — wording carried from elsewhere
•Forestar’s revenue from tract acres sold was $64.9 million compared to no tract acres sold in the prior year period.
Current report — wording carried from elsewhere
Gross profit from home sales decreased to $2.7 billion in the six months ended March 31, 2026 from $3.2 billion in the prior year period and decreased 200 basis points to 20.3% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 240 basis points due to the average cost of our homes closed increasing along with a decrease in the average selling price of those homes and 10 basis points due to an increase in the amortization of capitalized interest. These decreases were partially offset by an increase of 50 basis points due to a favorable litigation outcome and lower warranty costs.
Current report — wording carried from elsewhere
During each of the first two quarters of fiscal 2026, our Board of Directors approved a quarterly cash dividend of $0.45 per share, the most recent of which was paid on February 12, 2026 to stockholders of record on February 5, 2026. Cash dividends declared and paid in the three and six months ended March 31, 2026 totaled $129.7 million and $261.2 million, respectively. Cash dividends of $0.40 per share were approved and paid in each quarter of fiscal 2025.