NVR INC
For the period ended Dec 31, 2025. Filed Feb 11, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 11, 2026
NVR$6,298.29-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-12.
0000906163-25-000011
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-11.
0000906163-26-000018
Item 7. 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 117 previous paragraphs and 117 current paragraphs.
69 unchanged; 37 reworded; 10 added; 10 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 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 (10)
Current report
Demand for new homes continues to be negatively impacted by affordability issues, high home inventory levels in certain markets, declining consumer confidence and economic volatility. As a result of this weak demand environment in the second half of 2025, we repositioned many communities to better compete for a reduced number of buyers. We expect these adjustments to have a materially negative impact on our gross margins during the first half of 2026 as the homes in our backlog settle. We also expect a significant decline in revenues in the first quarter of 2026 due to weak orders in the third quarter of 2025 and strong fourth quarter 2025 backlog turnover.
Current report
The number of New Orders decreased 10% in 2025 compared to 2024. New Orders were negatively impacted by an 11% lower sales absorption, due to weaker demand.
Current report
Selling, general and administrative ("SG&A") expenses in 2025 were relatively flat when compared to 2024. While overall SG&A expenses were relatively flat, sales and marketing, office, legal and insurance expenses were all modestly higher year over year. These increases were offset by a decrease of approximately $36,100 in incentive compensation costs year over year due to weaker company performance.
Current report
The Mid Atlantic segment had an approximate $93,700, or 11%, decrease in segment profit in 2025 compared to 2024. The decrease was due primarily to a decrease in gross profit margins to 23.3% in 2025 from 25.0% in 2024. Gross profit margins were negatively impacted by higher lot costs and pricing pressure due primarily to continued affordability challenges.
Current report
Segment New Orders decreased 13% and the average sales price of New Orders decreased 1% in 2025 compared to 2024. New Orders were lower primarily due to a 15% decrease in the average number of active communities year over year.
Current report
The Mid East segment had an approximate $23,800, or 8%, decrease in segment profit in 2025 compared to 2024, due primarily to a decrease in gross profit margins to 21.1% in 2025 from 22.3% in 2024. Gross profit margin was negatively impacted by higher lot costs and certain operating costs, as well as by pricing pressure due primarily to continued affordability challenges.
Current report
Segment New Orders decreased 13% while the average sales price of New Orders increased 5% in 2025 compared to 2024. New Orders were negatively impacted by a 9% lower sales absorption rate due to weaker demand and a 4% decrease in the average number of active communities year over year. The average sales price of New Orders was favorably impacted by a shift to higher priced communities in certain markets within the segments year over year.
Current report
The South East segment had an approximate $186,100, or 48%, decrease in segment profit in 2025 compared to 2024. The decrease in segment profit was primarily due to a decrease in the segment's gross profit margin percentage, a decrease in segment revenues and increases in SG&A expenses and the corporate capital allocation charge. The segment's gross profit margin percentage decreased to 18.3% in 2025 from 22.3% in 2024. Gross profit margins were negatively impacted primarily by higher lot costs, an increase in certain operating costs, and an increase in lot deposit impairment charges year over year. Segment revenues in 2025 decreased by approximately $196,200, or 7%, due primarily to a 6% decrease in the number of units settled year over year. The decrease in the number of units settled is primarily attributable to an 11% lower backlog unit balance entering 2025 compared to backlog entering 2024, offset partially by a higher backlog turnover rate year over year. SG&A expenses were 12% higher year over year, resulting primarily from higher personnel and marketing costs attributable to a 23% increase in the average number of active communities year over year.
Current report
(1)This increase in consolidation adjustments and other in 2025 was primarily attributable to the increase in the contract land deposit impairment allowance. See further discussion of contract land deposit impairment charges in Reportable Homebuilding Segments above.
Current report
Segment profit in 2025 decreased by approximately $3,000, or 2%, from 2024, which was primarily attributable to a decrease in fees from title services.
Removed paragraphs (10)
Previous report
New Orders and the average sales price of New Orders increased 4% and 2%, respectively, in 2024 when compared to 2023, despite the number of active communities remaining flat year over year. New Orders were higher year over year due to improved demand in the first three quarters of 2024 compared to the same period in 2023, attributable to a limited supply of homes in the resale market and stabilized mortgage interest rates. However, demand began to slow in the fourth quarter, primarily in our South East segment as affordability was negatively impacted in part by rising mortgage interest rates and by an increase in the supply of homes in the resale and new home markets within certain markets in our South East segment. The increase in the average sales price of New Orders is primarily attributable to a relative shift to higher priced markets and communities in certain of our reportable segments as discussed in the respective segments below.
Previous report
Selling, general and administrative ("SG&A") expenses in 2024 increased by approximately $9,200 compared to 2023, and as a percentage of revenue decreased to 5.8% in 2024 from 6.3% in 2023. The increase in SG&A expense was due primarily to an increase of approximately $21,000 in personnel costs attributable to an increase in headcount year over year. Additionally, sales and marketing expenses were approximately $9,600 higher year over year due to an increase in model home related expenses. These increases were partially offset by a $24,000 decrease in equity-based compensation year over year due primarily to the non-qualified stock options to purchase shares of NVR common stock ("Options") and restricted stock units ("RSUs") issued as part of the 2018 four-year block grant being fully vested as of December 31, 2023.
Previous report
The Mid Atlantic segment had an approximate $70,900, or 10%, increase in segment profit in 2024 compared to 2023, driven by an increase in segment revenues of approximately $233,800, or 6%, coupled with an increase in gross profit margins. Segment revenues increased due to a 6% increase in the number of units settled which was primarily attributable to an 11% higher backlog unit balance entering 2024 compared to backlog entering 2023. The Mid Atlantic segment’s gross profit margin percentage increased to 25.0% in 2024 from 24.4% in 2023. Gross profit margins were favorably impacted primarily by the improved leveraging of certain operating costs attributable to the increase in settlement activity, offset partially by higher lot costs and closing cost assistance year over year.
Previous report
Segment New Orders increased 1% while the average sales price of New Orders increased 2% in 2024 compared to 2023. New Orders were slightly higher despite a 12% decrease in the average number of active communities year over year, due to a 14% higher sales absorption rate year over year. Sales demand remained favorable in certain markets within the segment due to a limited supply of homes in the resale market. The increase in the average sales price of New Orders was primarily attributable to a relative shift to higher priced communities in certain markets year over year.
Previous report
The Mid East segment had an approximate $33,000, or 13%, increase in segment profit in 2024 compared to 2023. The increase in segment profit was driven by an increase in segment revenues of approximately $138,200, or 8%, coupled with an increase in gross profit margins year over year. Segment revenues increased due to a 4% increase in settlements year over year, coupled with a 3% increase in the average settlement price. The increase in settlements resulted from a 7% higher backlog unit balance entering 2024 compared to backlog entering 2023, coupled with a higher backlog turnover rate year over year. The increase in the average settlement price is attributable to a 2% higher average price of units in backlog entering 2024 compared to backlog entering 2023, coupled with a 5% higher average price of New Orders for the first six months of 2024 compared to the same period of 2023. The segment’s gross profit margin percentage increased to 22.3% in 2024 from 21.6% in 2023. Gross profit margin was favorably impacted by the improved leveraging of certain operating costs as settlement activity increased, offset partially by higher lot costs and closing cost assistance year over year.
Previous report
Segment New Orders and the average sales price of New Orders each increased 3% in 2024 compared to 2023. Despite an 8% decrease in the average number of active communities year over year, New Orders were favorably impacted by 12% higher absorption rates year over year. Sales demand remained favorable in certain markets within the segment due to a limited supply of homes in the resale market. The increase in the average sales price of New Orders was primarily attributable to a relative shift to higher priced communities within certain markets year over year.
Previous report
The South East segment had an approximate $52,400, or 12%, decrease in segment profit in 2024 compared to 2023 due primarily to a decrease in gross profit margins to 22.3% in 2024 from 25.7% in 2023. Gross profit margins were negatively impacted primarily by higher lot costs and closing cost assistance. Segment revenues in 2024 were higher by approximately $388,200, or 16%, due to a 19% increase in the number of units settled, offset by a 3% decrease in the average price of units settled year over year. The increase in settlements was attributable primarily to a 15% higher backlog balance entering 2024 compared to the backlog entering 2023, coupled with a higher backlog turnover rate year over year. The decrease in the average settlement price was attributable primarily to a 7% lower average sales price of units in backlog entering 2024 compared to backlog entering 2023.
Previous report
(2)The decrease in equity-based compensation expense in 2024 was primarily attributable to the Options and RSUs issued as part of the 2018 four-year block grant being fully vested as of December 31, 2023. The increase in 2023 from 2022 was primarily attributable to a four year block grant of Options and RSUs in May 2022. See further discussion of equity-based compensation in Note 11 in the accompanying consolidated financial statements.
Previous report
Segment profit in 2024 increased by approximately $20,900, or 15%, from 2023, which was primarily attributable to an increase in mortgage banking fees, partially offset by an increase in general and administrative expenses. Mortgage banking fees increased by approximately $28,500, or 14%, due to higher gains on sales of loans. General and administrative expenses increased by $11,100, or 13%, which was the result of increased personnel costs.
Previous report
Mortgage Repurchase Reserve
Reworded paragraphs (37)
Previous wording
Demand for new homes weakened during the fourth quarter of 2024, due to rising mortgage interest rates and continued affordability issues attributable to high mortgage interest rates and home prices. New home demand continues to be favorably impacted by a limited, but increasing, supply of homes in the resale market; however, we expect that affordability issues, inflationary pressures, interest rate volatility and economic uncertainty may continue to weigh on future demand. We also expect to continue to face cost pressures related to building materials, labor and land costs which we expect will impact profit margins based on our ability to manage these costs while balancing sales pace and home prices. Although we are unable to predict the extent to which this will impact our operational and financial performance, we believe that we are well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of our balance sheet and our disciplined lot acquisition strategy.
Current wording
We expect this weak demand environment may continue to weigh on home sales, home prices and gross margins during 2026. Although we are unable to predict the extent to which this will impact our operational and financial performance, we believe that we are well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of our balance sheet and our disciplined lot acquisition strategy.
Previous wording
Our primary business is the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are primarily constructed on a pre-sold basis. To fully serve customers of our homebuilding operations, we also operate a mortgage banking and title services business. We primarily conduct our operations in mature markets. Additionally, we generally grow our business through market share gains in our existing markets and by expanding into markets contiguous to our current active markets. Our four homebuilding reportable segments consist of the following regions:
Current wording
Our primary business is the construction and sale of single-family detached homes, townhomes and condominiums, all of which are primarily constructed on a pre-sold basis. To fully serve customers of our homebuilding operations, we also operate a mortgage banking and title services business. We primarily conduct our operations in mature markets. Additionally, we generally grow our business through market share gains in our existing markets and by expanding into markets contiguous to our current active markets. Our four homebuilding reportable segments consist of the following regions:
Previous wording
In limited specific strategic circumstances, we deviate from our historical lot acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for development. Once we acquire control of raw ground, we determine whether to sell the raw parcel to a developer and enter into an LPA with the developer to purchase the finished lots or to hire a developer to develop the land on our behalf. While joint venture arrangements and direct land development activity are not our preferred method of acquiring finished building lots, we may enter into additional transactions in the future on a limited basis where there exists a compelling strategic or prudent financial reason to do so. We expect, however, to continue to acquire substantially all of our finished lot inventory using LPAs with forfeitable deposits.
Current wording
In certain specific strategic circumstances, we deviate from our historical lot acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for development. Once we acquire raw ground, we determine whether to sell the raw parcel to a developer and enter into an LPA with the developer to purchase the finished lots or to hire a developer to develop the land on our behalf. While joint venture arrangements and direct land development activity are not our preferred method of acquiring finished building lots, we may enter into additional transactions in the future on a limited basis where there exists a compelling strategic or prudent financial reason to do so. We expect, however, to continue to acquire substantially all of our finished lot inventory using LPAs with forfeitable deposits.
Previous wording
As of December 31, 2024, we controlled approximately 162,400 lots as discussed below.
Current wording
As of December 31, 2025, we controlled approximately 180,100 lots as described below.
Previous wording
We controlled approximately 155,000 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $764,900 and $8,700, respectively. Included in the number of controlled lots are approximately 10,700 lots for which we have recorded a contract land deposit impairment allowance of approximately $58,600 as of December 31, 2024.
Current wording
We controlled approximately 169,250 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $920,100 and $4,600, respectively. Included in the number of controlled lots are approximately 18,200 lots for which we have recorded a contract land deposit impairment allowance of approximately $111,000 as of December 31, 2025.
Previous wording
We had an aggregate investment totaling approximately $29,300 in three JVs, expected to produce approximately 5,150 lots. Of the lots to be produced by the JVs, approximately 4,800 lots were controlled by us and approximately 350 lots were either under contract with unrelated parties or currently not under contract. We had additional funding commitments totaling approximately $8,400 to one of the JVs as of December 31, 2024.
Current wording
We had an aggregate investment totaling approximately $78,100 in five JVs, expected to produce approximately 8,900 lots. Of the lots to be produced by the JVs, approximately 8,550 lots were controlled by us and approximately 350 lots were either under contract with unrelated parties or currently not under contract. We had additional funding commitments totaling approximately $34,100 to three of the JVs as of December 31, 2025.
Previous wording
We owned land with a carrying value of approximately $65,400 that we expect to be developed into approximately 2,600 finished lots.
Current wording
We owned land with a carrying value of approximately $39,300 that we expect to be developed into approximately 2,300 finished lots.
Previous wording
In addition to the lots we currently control as discussed above, we have certain properties under contract with land owners that are expected to yield approximately 35,900 lots. Some of these properties may require rezoning or other approvals to achieve the expected yield. These properties are controlled with cash deposits totaling approximately $20,400 as of December 31, 2024, of which approximately $8,400 is refundable if we do not perform under the contract. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.
Current wording
In addition to the lots we currently control as discussed above, we have certain properties under contract with land owners that are expected to yield approximately 38,200 lots. Some of these properties may require rezoning or other approvals to achieve the expected yield. These properties are controlled with cash deposits totaling approximately $42,300 as of December 31, 2025, of which approximately $9,000 is refundable if we do not perform under the contract. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.
Previous wording
Our consolidated revenues for the year ended December 31, 2024 totaled $10,524,479, an increase of 11% from $9,518,202 in 2023. Our net income for 2024 was $1,681,928, or $506.69 per diluted share, increases of 6% and 9% compared to 2023 net income and diluted earnings per share, respectively. Our homebuilding gross profit margin percentage was 23.7% in 2024 compared to 24.3% in 2023. Settlements for the year ended December 31, 2024 totaled 22,836 units, an increase of 11% from 2023. New orders, net of cancellations (“New Orders”) during 2024 were 22,560, an increase of 4% from 2023 while our average New Order sales price increased 2% to $457.7 in 2024. Our backlog of homes sold but not yet settled with the customer as of December 31, 2024 decreased on a unit basis by 3% to 9,953 units and increased on a dollar basis by 1% to $4,791,870 when compared to December 31, 2023. Income before tax from our mortgage banking segment totaled $154,935 in 2024, an increase of 17% when compared to $132,793 in 2023.
Current wording
Our consolidated revenues for the year ended December 31, 2025 totaled $10,323,959, a decrease of 2% from $10,524,479 in 2024. Our net income for 2025 was $1,339,816, or $436.55 per diluted share, decreases of 20% and 14% compared to 2024 net income and diluted earnings per share, respectively. Our homebuilding gross profit margin percentage was 21.2% in 2025 compared to 23.7% in 2024. Settlements for the year ended December 31, 2025 totaled 21,915 units, a decrease of 4% from 2024. New orders, net of cancellations (“New Orders”) during 2025 totaled 20,410 units, a decrease of 10% from 2024 while our average New Order sales price remained relatively flat year over year. Our backlog of homes sold but not yet settled with the customer as of December 31, 2025 decreased on a unit basis by 15% to 8,448 units and decreased on a dollar basis by 16% to $4,008,043 when compared to December 31, 2024. Income before tax from our mortgage banking segment totaled $152,049 in 2025, a decrease of 2% when compared to $154,935 in 2024.
Previous wording
Homebuilding revenues increased 11% in 2024 compared to 2023, as a result of an 11% increase in the number of units settled. The increase in the number of units settled was primarily attributable to a 12% higher backlog unit balance entering 2024 compared to the same period in 2023, coupled with a higher backlog turnover rate. The gross profit margin percentage in 2024 decreased to 23.7% from 24.3% in 2023. Gross profit margins were negatively impacted by higher lot costs and closing cost assistance.
Current wording
Homebuilding revenues decreased 2% in 2025 compared to 2024, as a result of a 4% decrease in the number of units settled. The decrease in the number of units settled was primarily attributable to a 3% lower backlog unit balance entering 2025 compared to the same period in 2024, coupled with an 11% decrease in new orders in the first six months of 2025 compared to the same period in 2024. Gross profit margin percentage in 2025 decreased to 21.2% from 23.7% in 2024. Gross profit margins were negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges and contract land deposit impairments totaling approximately $75,900 in 2025.
Previous wording
Our backlog represents homes sold but not yet settled with our customers. As of December 31, 2024, our backlog decreased on a unit basis by 3% to 9,953 units, but increased on a dollar basis by 1% to $4,791,870 when compared to 10,229 units and $4,756,926, respectively, as of December 31, 2023. The decrease in backlog units was attributable to a higher backlog turnover rate year over year as the number of units settled exceeded New Orders year over year. Backlog dollars were higher primarily due to a 4% increase in the average price of units in backlog year over year, primarily attributable to a relative shift to higher priced markets and communities in certain of our reportable segments.
Current wording
Our backlog represents homes sold but not yet settled with our customers. As of December 31, 2025, our backlog decreased on a unit basis by 15% to 8,448 units, and decreased on a dollar basis by 16% to $4,008,043 when compared to 9,953 units and $4,791,870, respectively, as of December 31, 2024. The decrease in backlog units was attributable to a 10% decrease in New Orders year over year, coupled with a higher backlog turnover rate in 2025. Backlog dollars were lower primarily due to the decrease in backlog units in 2025.
Previous wording
Our backlog may be impacted by customer cancellations for various reasons that are beyond our control, such as failure to obtain mortgage financing, inability to sell an existing home, job loss, or a variety of other reasons. In any period, a portion of the cancellations that we experience are related to new sales that occurred during the same period, and a portion are related to sales that occurred in prior periods and therefore appeared in the beginning backlog for the current period. Calculated as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 14%, 13% and 14% in 2024, 2023, and 2022, respectively. During the four quarters of each of 2024, 2023 and 2022, approximately 5% in 2024, 4% in 2023 and 4% in 2022, of a reporting quarter’s opening backlog cancelled during the quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur in future years. Other than those units that are cancelled, we expect to settle substantially all of our December 31, 2024 backlog during 2025. See “Risk Factors” in Item 1A of this Form 10-K.
Current wording
Our backlog may be impacted by customer cancellations for various reasons that are beyond our control, such as failure to obtain mortgage financing, inability to sell an existing home, job loss, or a variety of other reasons. In any period, a portion of the cancellations that we experience are related to new sales that occurred during the same period, and a portion are related to sales that occurred in prior periods and therefore appeared in the opening backlog for the current period. Our cancellation rate was approximately 17%, 14% and 13% in 2025, 2024, and 2023, respectively, calculated as the total of all cancellations during the period as a percentage of gross sales during the same period. During the four quarters of each of 2025, 2024, and 2023, approximately 6%, 5% and 4% of a reporting quarter’s opening backlog, respectively, cancelled during the quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur in future years. Other than units that are cancelled, we expect to settle substantially all of our December 31, 2025 backlog during 2026. See “Risk Factors” in Item 1A of this Form 10-K.
Previous wording
We record impairment charges on contract land deposits when we determine that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit. We evaluate our entire net contract land deposit portfolio for impairment each quarter. For presentation purposes below, the contract land deposit impairment allowance as of December 31, 2024 and 2023 has been allocated to the reportable segments for the respective years to show contract land deposits on a net basis. The net contract land deposit balances below also include approximately $8,700 and $7,700 as of December 31, 2024 and 2023, respectively, of letters of credit issued as deposits in lieu of cash.
Current wording
We record charges on contract land deposits when we determine that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit. We evaluate our entire net contract land deposit portfolio for impairment each quarter. For presentation purposes below, the contract land deposit impairment allowance as of December 31, 2025 and 2024 has been allocated to the reportable segments for the respective years to show contract land deposits on a net basis. The net contract land deposit balances below also include approximately $4,600 and $8,700 as of December 31, 2025 and 2024, respectively, of letters of credit issued as deposits in lieu of cash.
Previous wording
The North East segment had an approximate $48,200, or 29%, increase in segment profit in 2024 compared to 2023. Segment profits were favorably impacted by an increase in segment revenue of approximately $217,600, or 23%. Segment revenues were favorably impacted by a 13% increase in the number of units settled and an 8% increase in the average settlement price year over year. The increase in settlements was primarily attributable to a 16% higher backlog unit balance entering 2024 compared to backlog entering 2023. The increase in the average settlement price was primarily attributable to a 9% higher average sales price of units in backlog entering 2024 compared to backlog entering 2023. The segment’s gross profit margin percentage remained relatively flat.
Current wording
The North East segment had an approximate $3,700, or 2%, decrease in segment profit in 2025 compared to 2024, despite a 3% increase in segment revenues year over year. Segment profit was negatively impacted by a decrease in the segment's gross profit margin percentage to 25.5% in 2025 from 26.0% in 2024 due primarily to an increase in certain material costs. Segment revenues were favorably impacted by a 9% increase in the average settlement price year over year, offset by a 5% decrease in the number of units settled. The increase in the average settlement price was primarily attributable to a 9% higher average sales price of units in backlog entering 2025 compared to backlog entering 2024, coupled with a 9% increase in the average sales price of New Orders in the first six months of 2025 compared to the same period in 2024. The decrease in the number of units settled was primarily attributable to a decrease in the number of New Orders in the first six months of 2025 compared to the same period in 2024.
Previous wording
Segment New Orders and the average sales price of New Orders increased 6% and 9%, respectively, in 2024 compared to 2023. Despite a 13% decrease in the average number of active communities year over year, New Orders were favorably impacted by a 22% higher sales absorption rate year over year. Sales demand remained favorable in certain markets within the segment due to a limited supply of homes in the resale market. The increase in the average sales price of New Orders was primarily attributable to a relative shift to higher priced communities in certain markets year over year.
Current wording
Segment New Orders decreased 11% while the average sales price of New Orders increased 3%, respectively, in 2025 compared to 2024. New Orders were lower primarily due to a 6% decrease in the average number of active communities, coupled with a 5% lower sales absorption rate year over year due to weaker demand. The increase in the average sales price of New Orders was primarily attributable to a relative shift to higher priced communities in certain markets year over year.
Previous wording
Segment New Orders increased 7% while the average sales price of New Orders remained flat year over year. The increase in New Orders was primarily attributable to a 28% increase in the average number of active communities year over year, offset partially by a 16% lower absorption rate within the segment year over year. As noted in the Consolidated Homebuilding section above, sales demand remained favorable through the first three quarters of 2024 compared to the same period in 2023, due to a limited supply of homes in the resale market and stabilized mortgage interest rates. However, demand began to slow in the fourth quarter as affordability was negatively impacted in part by rising mortgage interest rates and by an increase in the supply of homes in the resale and new home markets within certain markets in the segment.
Current wording
Segment New Orders decreased 3% while the average sales price of New Orders remained flat year over year. The decrease in New Orders was primarily attributable to a 21% lower absorption rate due to weaker demand, offset partially by the aforementioned increase in the average number of active communities within the segment year over year. Absorption rates continue to be negatively impacted by rising resale and new home inventory in several of the markets within the segment.
Previous wording
In addition to the corporate capital allocation and contract land deposit impairments discussed above, the other reconciling items between homebuilding segment profit and homebuilding consolidated profit before tax include unallocated corporate overhead (which includes all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense. Our overhead functions, such as accounting, treasury and human resources, are centrally performed and the costs are not allocated to our operating segments. Consolidation adjustments consist of such items to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes, and are not allocated to our operating segments. External corporate interest expense is primarily comprised of interest charges on our 3.00% Senior Notes due 2030, and is not charged to the operating segments because the charges are included in the corporate capital allocation discussed above.
Current wording
In addition to the corporate capital allocation and contract land deposit impairments discussed in Reportable Homebuilding Segments above, the other reconciling items between homebuilding segment profit and homebuilding consolidated profit before tax include unallocated corporate overhead (which includes all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense. Our overhead functions, such as accounting, treasury and human resources, are centrally performed and the costs are not allocated to our operating segments. Consolidation adjustments consist of such items to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes, and are not allocated to our operating segments. External corporate interest expense is primarily comprised of interest charges on our Senior Notes, and is not charged to the operating segments because the charges are included in the corporate capital allocation discussed above.
Previous wording
(1)This item represents changes to the contract land deposit impairment allowance, which are not allocated to our reportable segments. See further discussion of contract land deposit impairment charges in Note 3 in the accompanying consolidated financial statements.
Current wording
(2)This item represents changes to the contract land deposit impairment allowance, which are not allocated to our reportable segments. See further discussion of contract land deposit impairment charges in Note 3 in the accompanying consolidated financial statements.
Previous wording
(3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance and is as follows for the years presented:
Current wording
(3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance and was as follows for the years presented:
Previous wording
Loan closing volume in 2024 increased by approximately $523,900, or 9%, from 2023. The increase was primarily attributable to a 9% increase in the number of loans closed, resulting from an 11% increase in the homebuilding segment’s number of homes settled in 2024 as compared to 2023.
Current wording
Loan closing volume in 2025 decreased by approximately $220,800, or 4%, from 2024. The decrease was primarily attributable to a 5% decrease in the number of loans closed, resulting from a 4% decrease in the homebuilding segment’s number of homes settled in 2025 as compared to 2024.
Previous wording
We maintain a reserve for losses on mortgage loans originated that reflects our judgment of the present loss exposure from the loans that we have originated and sold. As of December 31, 2024 and 2023, we had repurchase reserves of approximately $18,700 and $18,600, respectively.
Current wording
We maintain a reserve for losses on mortgage loans originated that reflects our judgment of the present loss exposure from the loans that we have originated and sold. As of December 31, 2025 and 2024, we had repurchase reserves of approximately $18,900 and $18,700, respectively.
Previous wording
Our consolidated effective tax rates in 2024 and 2023 were 20.50% and 17.46%, respectively. The increase in the effective tax rate is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled approximately $95,100 and $153,600 for 2024 and 2023, respectively.
Current wording
Our consolidated effective tax rates in 2025 and 2024 were 23.96% and 20.50%, respectively. The increase in the effective tax rate is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled approximately $28,300 and $95,100 for 2025 and 2024, respectively.
Previous wording
We fund our operations primarily from our current cash holdings and cash flows generated by operating activities. In addition, we have available a short-term unsecured working capital revolving credit facility and revolving mortgage repurchase facility, as further described below. As of December 31, 2024, we had a strong liquidity position with approximately $2,500,000 in cash and cash equivalents, approximately $285,000 in unused committed capacity under our revolving credit facility and $150,000 in unused committed capacity under our revolving mortgage repurchase facility. We believe that our current cash holdings and our anticipated cash flows generated by operating activities, together with the amounts under our revolving credit facility and revolving mortgage repurchase facility will be sufficient to fund our anticipated operations for at least the next twelve months and beyond.
Current wording
We fund our operations primarily from our current cash holdings and cash flows generated by operating activities. In addition, we have available a short-term unsecured working capital revolving credit facility and revolving mortgage repurchase facility, as further described below. As of December 31, 2025, we had a strong liquidity position with approximately $1,800,000 in cash and cash equivalents, approximately $290,000 in unused committed capacity under our revolving credit facility and $150,000 in unused committed capacity under our revolving mortgage repurchase facility. We believe that our current cash holdings and our anticipated cash flows generated by operating activities, together with the amounts under our revolving credit facility and revolving mortgage repurchase facility will be sufficient to fund our anticipated operations for at least the next twelve months and beyond.
Previous wording
(i) Payments due to service our debt and interest on that debt. Our current outstanding Senior Notes total $900,000 and mature in May 2030. Future interest payments on our current outstanding Senior Notes total approximately $145,050, with $27,000 due within the next twelve months.
Current wording
(i) Payments due to service our debt and interest on that debt. Our current outstanding Senior Notes total $900,000 and mature in May 2030. Future interest payments on our current outstanding Senior Notes total approximately $118,050, with $27,000 due within the next twelve months.
Previous wording
(ii) Payment obligations totaling approximately $584,500 under existing LPAs for deposits to be paid to land developers, assuming that contractual development milestones are met by the developers and we exercise our option to acquire finished lots under those LPAs. We expect to make the majority of these payments within the next three years.
Current wording
(ii) Payment obligations totaling approximately $733,900 under existing LPAs for deposits to be paid to land developers, assuming that contractual development milestones are met by the developers and we exercise our option to acquire finished lots under those LPAs. We expect to make the majority of these payments within the next three years.
Previous wording
(iii) Obligations under operating and finance leases related primarily to office space and our production facilities. See Note 12 of this Form 10-K for additional discussion of our leases.
Current wording
(iii) Obligations under operating and finance leases related primarily to corporate and division offices, production facilities, model homes, and certain office and production equipment. See Note 11 of this Form 10-K for additional discussion of our leases.
Previous wording
In addition to funding growth in our homebuilding and mortgage banking operations, we historically have used a substantial portion of our excess liquidity to repurchase outstanding shares of our common stock in open market and privately negotiated transactions. This ongoing repurchase program assists us in accomplishing our primary objective, creating increases in shareholder value. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Item 5 of this Form 10-K for disclosure of amounts repurchased during the fourth quarter of 2024. For the year ended December 31, 2024, we repurchased 256,871 shares of our common stock at an aggregate purchase price of $2,057,677. As of December 31, 2024, we had approximately $868,200 available under Board approved repurchase authorizations.
Current wording
In addition to funding growth in our homebuilding and mortgage banking operations, we historically have used a substantial portion of our excess liquidity to repurchase outstanding shares of our common stock in open market and privately negotiated transactions. This ongoing repurchase program assists us in accomplishing our primary objective, creating increases in shareholder value. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Item 5 of this Form 10-K for disclosure of amounts repurchased during the fourth quarter of 2025. For the year ended December 31, 2025, we repurchased 243,082 shares of our common stock at an aggregate purchase price of $1,818,595. As of December 31, 2025, we had approximately $549,600 available under Board approved repurchase authorizations.
Previous wording
As of December 31, 2024, we had a total of $900,000 in outstanding Senior Notes which mature in May 2030. The Senior Notes are senior unsecured obligations and rank equally in right of payment with any of our existing and future unsecured senior indebtedness, will rank senior in right of payment to any of our future indebtedness that is by its terms expressly subordinated to the Senior Notes and will be effectively subordinated to any of our existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness. The indenture governing the Senior Notes does not contain any financial covenants; however, it does contain, among other items, and subject to certain exceptions, covenants that restrict our ability to create, incur, assume or guarantee secured debt, enter into sale and leaseback transactions and conditions related to mergers and/or the sale of assets. We were in compliance with all covenants under the Senior Notes as of December 31, 2024.
Current wording
As of December 31, 2025, we had a total of $900,000 in outstanding Senior Notes which mature in May 2030.
Previous wording
We have an unsecured revolving credit agreement (the "Credit Agreement") with a group of lenders which may be used for working capital and general corporate purposes. The Credit Agreement provides for aggregate revolving loan commitments of $300,000 (the "Facility"). Under the Credit Agreement, we may request increases of up to $300,000 to the Facility in the form of revolving loan commitments or term loans to the extent that new or existing lenders agree to provide additional revolving loan or term loan commitments. In addition, the Credit Agreement provides for a $100,000 sublimit for the issuance of letters of credit of which there was approximately $14,600 outstanding as of December 31, 2024. The Credit Agreement termination date is February 12, 2026. There were no borrowings outstanding under the Credit Agreement as of December 31, 2024.
Current wording
We have an unsecured revolving credit agreement (the "Credit Agreement") which provides for aggregate revolving loan commitments of $300,000, and a $100,000 sublimit for the issuance of letters of credit of which there was approximately $9,700 outstanding as of December 31, 2025. There were no borrowings outstanding under the Credit Agreement as of December 31, 2025.
Previous wording
Our mortgage banking subsidiary, NVRM, has an unsecured revolving mortgage repurchase agreement (the "Repurchase Agreement") which is non-recourse to NVR. The purpose of the Repurchase Agreement is to finance the origination of mortgage loans by NVRM. The Repurchase Agreement provides borrowing capacity up to $150,000, subject to certain sublimits. The Repurchase Agreement expires on July 14, 2025. As of December 31, 2024, there was no debt outstanding under the Repurchase Agreement and there were no borrowing base limitations.
Current wording
Our mortgage banking subsidiary, NVRM, has an unsecured revolving mortgage repurchase facility (the "Repurchase Agreement") which provides for aggregate borrowing up to $150,000. As of December 31, 2025, there were no borrowings outstanding under the Repurchase Agreement.
Previous wording
See Note 8 of this Form 10-K for additional disclosures regarding our Senior Notes, Credit Agreement and Repurchase Agreement.
Current wording
See Note 7 of this Form 10-K for additional information regarding our Senior Notes, Credit Agreement and Repurchase Agreement.
Previous wording
For the year ended December 31, 2023, cash, restricted cash and cash equivalents increased by $640,926. Net cash provided by operating activities was $1,497,993, due primarily to cash provided by earnings in 2023 and net cash proceeds of $46,136 from mortgage loan activity. Cash was primarily used to fund the increase in inventory of $161,875 attributable to an increase in units under construction as of December 31, 2023 compared to December 31, 2022.
Current wording
For the year ended December 31, 2025, cash, restricted cash and cash equivalents decreased by $707,786. Net cash provided by operating activities was $1,121,320, due primarily to cash provided by earnings in 2025, and a decrease in inventory of $335,147 attributable to a decrease in units under construction year over year. Cash was primarily used to fund the increase in contract land deposits of $200,657 attributable to an increase in the number of lots under control as of December 31, 2025 compared to December 31, 2024, and net mortgage loan activity of $238,260.
Previous wording
Net cash used in investing activities in 2023 was $24,100. Cash was used primarily for purchases of property, plant and equipment of $24,877.
Current wording
Net cash used in investing activities in 2025 was $71,208. Cash was used primarily to fund investments in unconsolidated joint ventures totaling $47,614 and purchases of property, plant and equipment of $24,508.
Previous wording
Net cash used by financing activities in 2023 was $832,967. Cash was used primarily to repurchase 181,499 shares of our common stock at an aggregate purchase price of $1,081,815 under our ongoing common stock repurchase program, discussed above. Cash was provided from stock option exercise proceeds totaling $250,509.
Current wording
Net cash used by financing activities in 2025 was $1,757,898. Cash was used primarily to repurchase 243,082 shares of our common stock at an aggregate purchase price of $1,833,316 under our ongoing common stock repurchase program, discussed above (which includes the associated excise tax payments). Cash was provided from stock option exercise proceeds totaling $80,146.
Previous wording
For the year ended December 31, 2024, cash, restricted cash and cash equivalents decreased by $550,777. Net cash provided by operating activities was $1,374,462, due primarily to cash provided by earnings in 2024. Cash was primarily used to fund the increase in contract land deposits of $157,291 attributable to an increase in the number of lots under control as of December 31, 2024 compared to December 31, 2023, and net mortgage loan activity of $105,790. Additional cash was used to fund the increase in inventory of $108,557 attributable to an increase in units under construction year over year.
Current wording
For the year ended December 31, 2024, cash, restricted cash and cash equivalents decreased by $550,777. Net cash provided by operating activities was $1,374,462, due primarily to cash provided by earnings in 2024. Cash was primarily used to fund the increase in contract land deposits of $157,291 attributable to an increase in the number of lots under control as of December 31, 2024 compared to December 31, 2023, and net mortgage loan activity of $105,790. Additionally, cash was used to fund the increase in inventory of $108,557 attributable to an increase in units under construction year over year.
Previous wording
As of December 31, 2024 and 2023, restricted cash totaled $53,692 and $52,550, respectively. Restricted cash was attributable to customer deposits for certain home sales and cash collected from customers for loans in process and closed mortgage loans held for sale.
Current wording
As of December 31, 2025 and 2024, restricted cash totaled $40,395 and $53,692, respectively. Restricted cash was attributable to customer deposits for certain home sales and cash collected from customers for loans in process and closed mortgage loans held for sale.
Previous wording
We recognize equity-based compensation expense within our income statement for all share-based payment arrangements, which include Options and RSUs. Compensation expense is based on the grant-date fair value of the Options and RSUs granted, and is recognized on a straight-line basis over the requisite service period for the entire award (from the date of grant through the period of the last separately vesting portion of the grant). Options and RSUs which are subject to a performance condition are treated as a separate award from the “service-only” Options and RSUs, and compensation expense is recognized when it becomes probable that the stated performance target will be achieved. We calculate the fair value of our Options, which are not publicly traded, using the Black-Scholes option-pricing model. The grant date fair value of the RSUs is the closing price of our common stock on the day immediately preceding the date of grant. The reversal of compensation expense previously recognized for grants forfeited is recorded in the period in which the forfeiture occurs.
Current wording
We recognize equity-based compensation expense within our income statement for all share-based payment arrangements, which include Options and RSUs. Compensation expense is based on the grant-date fair value of the Options and RSUs granted, and is recognized on a straight-line basis over the requisite service period for the entire award (from the date of grant through the period of the last separately vesting portion of the grant). Options and RSUs which are subject to a performance condition are treated as a separate award from the “service-only” Options and RSUs, and compensation expense is recognized when it becomes probable that the stated performance target will be achieved. We calculate the fair value of our Options, which are not publicly traded, using the
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Black-Scholes option-pricing model. The grant date fair value of the RSUs is the closing price of our common stock on the day immediately preceding the date of grant. The reversal of compensation expense previously recognized for grants forfeited is recorded in the period in which the forfeiture occurs.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We originate several different loan products for our customers to finance the purchase of their home. We sell all of the loans we originate into the secondary mortgage market, typically on a servicing released basis and within 30 days from closing. All of the loans that we originate are underwritten to the standards and specifications of the ultimate investor. Those underwriting standards are typically equal to or more stringent than the underwriting standards required by FNMA, GNMA, FHLMC, VA and FHA. To the extent we underwrite our originated loans to those standards, we bear no increased concentration of credit risk from the issuance of loans, except in certain limited instances where repurchases or early payment defaults occur. We employ a quality control department to ensure that our underwriting controls are effectively operating, and further assess the underwriting function as part of our assessment of internal controls over financial reporting. We maintain a reserve for losses on mortgage loans originated that reflects our judgment of the present loss exposure in the loans that we have originated and sold. The reserve is calculated based on an analysis of historical experience and exposure. Although we consider the mortgage repurchase reserve reflected on the December 31, 2024 consolidated balance sheet to be adequate (see Note 15 to the accompanying consolidated financial statements included herein), there can be no assurance that this reserve will prove to be adequate over time to cover losses due to unanticipated changes to the assumptions used to estimate the mortgage repurchase reserve.