LGI Homes, Inc.
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
LGIH$45.57-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001580670-24-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP MeasuresCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0001580670-25-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP MeasuresThe 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 194 previous paragraphs and 170 current paragraphs.
113 unchanged; 45 reworded; 12 added; 28 removed; 8 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 8 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 (12)
Current report
Our results in the first quarter of 2025 were achieved against a challenging macroeconomic backdrop. Mortgage rates have remained persistently high, straining affordability and constraining demand. Against this backdrop, we continued to offer buyers attractive financial incentives to bridge the affordability gap and put homeownership within reach of as many customers as possible. During the three months ended March 31, 2025, we had 996 home closings, compared to 1,083 home closings during the three months ended March 31, 2024. As mortgage rates declined in February and March, both leads and home sales improved materially compared to January, and we ended the quarter with 1,040 homes in backlog.
Current report
In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of raw materials or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain. To date, we have not seen any impacts from tariffs on product availability or costs. We are working closely with our suppliers to mitigate any potential impacts as well as broadening our sourcing network. To date, we have not experienced any disruptions in our labor base related to immigration policies of the new administration in Washington D.C.
Current report
•Home sales revenues decreased 10.1% to $351.4 million from $390.9 million.
Current report
•Homes closed decreased 8.0% to 996 homes from 1,083 homes.
Current report
•Average sales price per home closed decreased 2.2% to $352,831 from $360,897.
Current report
•Gross margin as a percentage of home sales revenues decreased to 21.0% from 23.4%.
Current report
•Net income before income taxes decreased 75.2% to $5.7 million from $23.1 million.
Current report
•Net income decreased 76.6% to $4.0 million from $17.1 million.
Current report
•EBITDA (non-GAAP) as a percentage of home sales revenues decreased to 4.2% from 7.8%.
Current report
On November 21, 2023, we issued $400.0 million aggregate principal amount of the 2028 Senior Notes in an offering to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S. Interest on the 2028 Senior Notes accrues at a rate of 8.750% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The 2028 Senior Notes mature on December 15, 2028. The terms of the 2028 Senior Notes are governed by an Indenture, dated as of July 6, 2018, and Fourth Supplemental Indenture thereto, dated as of November 21, 2023, as may be supplemented from time to time, among us, our subsidiaries that guarantee our obligations under the Credit Agreement and Regions Bank, as trustee.
Current report
Net cash provided by investing activities was $2.0 million during the three months ended March 31, 2024, primarily due to proceeds from the sale of assets, offset by the purchase of property and equipment.
Current report
•disruptions in global trade, including as a result of tariffs, trade restrictions, retaliatory trade measures or the effect of such actions on trading relationships between the United States and other countries;
Removed paragraphs (28)
Previous report
The housing market remains healthy, with overall demand supported by strong fundamentals, including household formation and migration trends, the ongoing impact of years of underproduction, and a lock-in effect limiting the supply of existing homes available for sale. On top of these dynamics are a resilient employment market and our customers’ positive outlook on the stability of their jobs. On the other side of the demand equation is constrained affordability, which remains the main challenge for our customers. During the nine months ended September 30, 2024, we had 4,495 home closings, compared to 4,971 home closings during the nine months ended September 30, 2023.
Previous report
•Home sales revenues increased 5.6% to $651.9 million from $617.5 million.
Previous report
•Homes closed increased 0.3% to 1,757 homes from 1,751 homes.
Previous report
•Average sales price per home closed increased 5.2% to $371,004 from $352,678.
Previous report
•Gross margin as a percentage of home sales revenues decreased to 25.1% from 25.7%.
Previous report
•Adjusted gross margin (non-GAAP) as a percentage of home sales revenues was 27.2% in both comparable periods.
Previous report
•Net income before income taxes increased 2.7% to $91.9 million from $89.4 million.
Previous report
•Net income increased 3.8% to $69.6 million from $67.0 million.
Previous report
•EBITDA (non-GAAP) as a percentage of home sales revenues increased to 16.2% from 16.0%.
Previous report
•Home sales revenues decreased 6.0% to $1.6 billion from $1.8 billion.
Previous report
•Homes closed decreased 9.6% to 4,495 homes from 4,971 homes.
Previous report
•Average sales price per home closed increased 4.0% to $366,007 from $352,075.
Previous report
•Gross margin as a percentage of home sales revenues increased to 24.7% from 22.8%.
Previous report
•Net income before income taxes decreased 0.7% to $191.8 million from $193.2 million.
Previous report
•Net income decreased 1.3% to $145.2 million from $147.1 million.
Previous report
•EBITDA (non-GAAP) as a percentage of home sales revenues increased to 13.6% from 12.5%.
Previous report
•Home sales revenues in our Florida reportable segment decreased by $23.2 million, or 19.1%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to a 24.3% decrease in the number of homes closed, partially offset by a 6.9% increase in the average sales price per home closed. The decrease in home closings was the result of a lower absorption rate, partially offset by a higher average community count.
Previous report
Cost of Sales and Gross Margin (home sales revenues less cost of sales). Cost of sales increased for the three months ended September 30, 2024 to $488.4 million, an increase of $29.6 million, or 6.5%, from $458.7 million for the three months ended September 30, 2023, primarily due to an increase in lot costs and higher capitalized interest. Gross margin for the three months ended September 30, 2024 was $163.5 million, an increase of $4.7 million, or 3.0%, from $158.8 million for the three months ended September 30, 2023. Gross margin as a percentage of home sales revenues was 25.1% for the three months ended September 30, 2024 and 25.7% for the three months ended September 30, 2023. This decrease in gross margin as a percentage of home sales revenues was primarily due to the impact of increased sales incentives offered and a combination of an increase in lot costs and higher capitalized interest during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Previous report
Operating Income and Net Income before Income Taxes. Operating income for the three months ended September 30, 2024 was $80.3 million, a decrease of $2.0 million, or 2.4%, from $82.3 million for the three months ended September 30, 2023. The decrease in operating income was primarily attributed to lower gross margin and higher advertising and other costs associated with the increase in average community count. Net income before income taxes for the three months ended September 30, 2024 was $91.9 million, an increase of $2.4 million, or 2.7%, from $89.4 million for the three months ended September 30, 2023. The increase in net income before income taxes was primarily attributed to gains realized from the sale of residential lots during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Our reportable segments contributed to net income before income taxes during the three months ended September 30, 2024 as follows: Central - $21.8 million, or 23.8%; Southeast - $27.6 million, or 30.0%; Northwest - $12.3 million, or 13.4%; West - $21.0 million, or 22.8%; and Florida - $9.7 million, or 10.6%.
Previous report
Net Income. Net income for the three months ended September 30, 2024 was $69.6 million, an increase of $2.5 million, or 3.8%, from $67.0 million for the three months ended September 30, 2023. The increase in net income was primarily attributed to a higher average sales price per home closed and gains realized from the sale of residential lots during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
•Home sales revenues in our Central reportable segment decreased by $123.0 million, or 21.8%, during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to a 20.9% decrease in the number of homes closed as well as a slight decrease in the average sales price per home closed. The decrease in home closings was primarily the result of a lower absorption rate, partially offset by an increase in the average community count.
Previous report
•Home sales revenues in our Southeast reportable segment increased by $9.5 million, or 2.4%, during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to a 1.2% increase in the number of homes closed and a 1.1% increase in the average sales price per home closed. The increase in home closings was the result of an increase in the average community count, partially offset by a lower absorption rate.
Previous report
•Home sales revenues in our Northwest reportable segment decreased by $25.6 million, or 12.0%, during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to a 20.6% decrease in the number of homes closed, offset by a 10.7% increase in the average sales price per home closed. The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
Previous report
•Home sales revenues in our West reportable segment increased by $95.3 million, or 37.1%, during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to a 26.2% increase in the number of homes closed and an 8.7% increase in the average sales price per home closed. The increase in home closings was the result of an increase in the average community count, partially offset by a lower absorption rate.
Previous report
General and Administrative. General and administrative expenses for the nine months ended September 30, 2024 were $90.0 million, an increase of $5.7 million, or 6.7%, from $84.3 million for the nine months ended September 30, 2023. The increase in general and administrative expenses was primarily a result of increased indirect overhead expenses and professional fees, partially offset by a decrease in payroll related costs during the nine months ended September 30, 2024. General and administrative expenses as a percentage of home sales revenues were 5.5% and 4.8% for the nine months ended September 30, 2024 and 2023, respectively. The increase in general and administrative expenses as a percentage of home sales revenues was primarily due to leverage from community count growth during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous report
Income Taxes. Income tax provision for the nine months ended September 30, 2024 was $46.6 million, an increase of $0.6 million, or 1.2%, from income tax provision of $46.1 million for the nine months ended September 30, 2023. The increase in our effective tax rate to 24.3% for the nine months ended September 30, 2024 from 23.8% for the nine months ended September 30, 2023 was primarily a result of an increase in the compensation cost in excess of deductions for share-based payments, partially offset by the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended.
Previous report
Net cash used in investing activities was $7.6 million during the nine months ended September 30, 2023, primarily due to additional investment in unconsolidated entities.
Reworded paragraphs (45)
Previous wording
Our management team has been in the residential land development business since the mid-1990s. Since commencing home building operations in 2003, we have constructed and closed over 70,000 homes.
Current wording
Our management team has been in the residential land development business since the mid-1990s. Since commencing home building operations in 2003, we have constructed and closed over 75,000 homes.
Previous wording
We sell homes under the LGI Homes and Terrata Homes brands. Our 138 active communities at September 30, 2024 included 18 Terrata Homes communities. At September 30, 2023, we had 106 active communities, including 11 Terrata Homes communities.
Current wording
We sell homes under the LGI Homes and Terrata Homes brands. Our 146 active communities at March 31, 2025 included 17 Terrata Homes communities. At March 31, 2024, we had 120 active communities, including 16 Terrata Homes communities.
Previous wording
On October 9, 2024, we entered into the Fifth Amendment, which amended the 2023 Credit Agreement. The Fifth Amendment, among other things, (a) amended the negative covenant in the Credit Agreement relating to housing inventory and (b) extended the maturity of the commitments of certain lenders under the Credit Agreement to April 28, 2028. For additional information on the Credit Agreement (including defined terms used in this paragraph), see Note 4, “Notes Payable” to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
On April 28, 2025, we entered into the Sixth Amendment, which amended the 2024 Credit Agreement. The Sixth Amendment, among other things, (a) extended the maturity of the commitments of certain lenders under the Credit Agreement to April 28, 2029, (b) added certain financial institutions as issuers of letters of credit and (c) reset the tangible net worth financial covenant for the period from and after the date of the Sixth Amendment. For additional information on the Credit Agreement (including defined terms used in this paragraph), see Note 4, “Notes Payable” to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
•Adjusted gross margin (non-GAAP) as a percentage of home sales revenues increased to 26.7% from 24.5%.
Current wording
•Adjusted gross margin (non-GAAP) as a percentage of home sales revenues decreased to 23.6% from 25.3%.
Previous wording
We owned and controlled 68,564 lots at September 30, 2024 as compared to 69,904 lots at June 30, 2024 and 71,081 lots at December 31, 2023.
Current wording
We owned and controlled 67,792 lots at March 31, 2025 as compared to 70,899 lots at December 31, 2024.
Previous wording
The following table sets forth our results of operations for the three and nine months ended September 30, 2024 and 2023:
Current wording
The following table sets forth our results of operations for the three months ended March 31, 2025 and 2024:
Previous wording
Home sales revenues for the three months ended September 30, 2024 were $651.9 million, an increase of $34.3 million, or 5.6%, from $617.5 million for the three months ended September 30, 2023. The increase in home sales revenues was primarily due to an increase in the average sales price per home closed and a slight increase in homes closed during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The average sales price per home closed during the three months ended September 30, 2024 was $371,004, an increase of $18,326, or 5.2%, from the average sales price per home closed of $352,678 for the three months ended September 30, 2023. The increase in the average sales price per home closed was primarily due to geographic mix, largely in our Northwest and West segments, and a favorable pricing environment. The overall increase in home closings was a result of a higher average community count during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The overall increase in average community count relates to timing associated with new community openings, offset by the close out of some communities and transition between certain active communities during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The overall decrease in absorption rate generally relates to the impact of ongoing affordability constraints, new community openings, and the overall increase in community count.
Current wording
Home sales revenues for the three months ended March 31, 2025 were $351.4 million, a decrease of $39.4 million, or 10.1%, from $390.9 million for the three months ended March 31, 2024. The decrease in home sales revenues was primarily due to an 8.0% decrease in homes closed and a decrease in the average sales price per home closed during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The overall decrease in home closings was a result of a lower absorption rate, partially offset by a higher average community count, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The overall increase in average community count relates to timing associated with new community openings, offset by the close out of some communities and transition between certain active communities during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The average sales price per home closed during the three months ended March 31, 2025 was $352,831, a decrease of $8,065, or 2.2%, from the average sales price per home closed of $360,897 for the three months ended March 31, 2024. The decrease in the average sales price per home closed was primarily due to geographic mix and an increase in sales incentives. The overall decrease in absorption rate generally relates to the impact of ongoing affordability constraints, new community openings, and the overall increase in community count.
Previous wording
Included within our home sales revenues for the nine months ended September 30, 2024 was $113.7 million in wholesale revenues resulting from 379 home closings, representing 8.4% of the 4,495 total homes closed during the nine months ended September 30, 2024. Included within our home sales revenues for the nine months ended September 30, 2023 was $116.3 million in wholesale revenues resulting from 381 home closings, representing 7.7% of the 4,971 total homes closed during the nine months ended September 30, 2023. The increase in home closings as a percentage of revenues through our wholesale channel was primarily related to fewer retail home closings during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Current wording
Included within our home sales revenues for the three months ended March 31, 2025 was $54.5 million in wholesale revenues resulting from 179 home closings, representing 18.0% of the 996 total homes closed during the three months ended March 31, 2025. Included within our home sales revenues for the three months ended March 31, 2024 was $28.6 million in wholesale revenues resulting from 102 home closings, representing 9.4% of the 1,083 total homes closed during the three months ended March 31, 2024. The increase in home closings as a percentage of revenues through our wholesale channel was primarily related to higher demand from our wholesale channel customers during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
•Home sales revenues in our Central reportable segment decreased by $19.2 million, or 10.4%, during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to a 9.3% decrease in the number of homes closed and a 1.3% decrease in the average sales price per home closed. The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
Current wording
•Home sales revenues in our Central reportable segment decreased by $2.6 million, or 2.5%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a 5.7% decrease in the average sales price per home closed, partially offset by a 3.4% increase in home closings.
Previous wording
•Home sales revenues in our Southeast reportable segment increased by $5.6 million, or 3.8%, during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to a 3.1% increase in the number of homes closed and a 0.6% increase in the average sales price per home closed. The increase in home closings was the result of an increase in the average community count, partially offset by a lower absorption rate.
Current wording
•Home sales revenues in our Southeast reportable segment decreased by $14.8 million, or 12.7%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a 12.1% decrease in the number of homes closed and a decrease in the average sales price per home closed. The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
Previous wording
•Home sales revenues in our Northwest reportable segment increased by $15.4 million, or 22.8%, during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to a 14.5% increase in the number of homes closed and a 7.2% increase in the average sales price per home closed. The increase in home closings was the result of an increase in the average community count, partially offset by a lower absorption rate.
Current wording
•Home sales revenues in our Northwest reportable segment decreased by $1.8 million, or 5.1%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a 9.5% decrease in the average sales price per home closed, partially offset by a 4.8% increase in the number of homes closed.
Previous wording
•Home sales revenues in our West reportable segment increased by $55.7 million, or 58.7%, during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to a 45.0% increase in the number of homes closed and a 9.4% increase in the average sales price per home closed. The increase in home closings was the result of an increase in the average community count, partially offset by a lower absorption rate.
Current wording
•Home sales revenues in our West reportable segment decreased by $6.1 million, or 8.4%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an 11.2% decrease in the number of homes closed, partially offset by a 3.1% increase in the average sales price per home closed. The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
Previous wording
•Home sales revenues in our Florida reportable segment decreased by $61.1 million, or 19.2%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to a 23.4% decrease in the number of homes closed, partially offset by a 5.5% increase in the average sales price per home closed. The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
Current wording
•Home sales revenues in our Florida reportable segment decreased by $14.1 million, or 23.0%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to a 22.6% decrease in the number of homes closed and a decrease in the average sales price per home closed. The decrease in home closings was the result of a lower absorption rate, partially offset by an increase in the average community count.
Previous wording
Cost of Sales and Gross Margin (home sales revenues less cost of sales). Cost of sales for the nine months ended September 30, 2024 was $1.2 billion, a decrease of $111.2 million, or 8.2%, from $1.4 billion for the nine months ended September 30, 2023. This decrease was primarily due to an increase in lot costs and higher capitalized interest. Gross margin for the nine months ended September 30, 2024 was $405.8 million, an increase of $6.2 million, or 1.6%, from $399.6 million for the nine months ended September 30, 2023. Gross margin as a percentage of home sales revenues was 24.7% for the nine months ended September 30, 2024 and 22.8% for the nine months ended September 30, 2023. The increase in gross margin as a percentage of home sales revenues during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was primarily due to a higher average sales price per home closed, partially offset by a combination of higher lot costs and higher capitalized interest as a percentage of revenue as well as the impact of sales incentives offered during the nine months ended September 30, 2024.
Current wording
Cost of Sales and Gross Margin (home sales revenues less cost of sales). Cost of sales for the three months ended March 31, 2025 was $277.7 million, a decrease of $21.7 million, or 7.3%, from $299.5 million for the three months ended March 31, 2024. This overall decrease was primarily due to an 8.0% decrease in homes closed. Gross margin for the three months ended March 31, 2025 was $73.7 million, a decrease of $17.7 million, or 19.4%, from $91.4 million for the three months ended March 31, 2024. Gross margin as a percentage of home sales revenues was 21.0% for the three months ended March 31, 2025 and 23.4% for the three months ended March 31, 2024. The decrease in gross margin as a percentage of home sales revenues during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was primarily due to a lower average sales price per home closed, a higher number of wholesale closings, higher lot costs and higher capitalized interest as a percentage of revenue as well as the impact of sales incentives offered during the three months ended March 31, 2025.
Previous wording
Selling Expenses. Selling expenses for the nine months ended September 30, 2024 were $149.2 million, an increase of $7.4 million, or 5.2%, from $141.8 million for the nine months ended September 30, 2023. The increase in selling expenses was primarily due to an increase in advertising expense and an increase in personnel costs as a result of an increase in communities for the nine months ended September 30, 2024 as compared to the three months ended September 30, 2023. Sales commissions decreased to $72.2 million during the nine months ended September 30, 2024 from $77.1 million for the nine months ended September 30, 2023, primarily due to a decrease in outside commissions and our in-house commissions. Selling expenses as a percentage of home sales revenues were 9.1% and 8.1% for the nine months ended September 30, 2024 and 2023, respectively. The increase in selling expenses as a percentage of home sales revenues was primarily due to higher advertising and other personnel expenses during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Current wording
Selling Expenses. Selling expenses for the three months ended March 31, 2025 were $42.3 million, an increase of $1.2 million, or 3.0%, from $41.1 million for the three months ended March 31, 2024. The increase in selling expenses was primarily due to an increase in advertising expense and an increase in personnel costs as a result of an increase in communities, partially offset by a decrease in sales commissions for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Sales commissions decreased to $14.0 million during the three months ended March 31, 2025 from $17.4 million for the three months ended March 31, 2024, primarily due to a decrease in outside commissions and our in-house commissions. Selling expenses as a percentage of home sales revenues were 12.0% and 10.5% for the three months ended March 31, 2025 and 2024, respectively. The increase in selling expenses as a percentage of home sales revenues was primarily due to higher advertising and other personnel expenses offset by commissions during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
General and Administrative. General and administrative expenses for the three months ended September 30, 2024 were $28.0 million, an increase of $1.2 million, or 4.6%, from $26.7 million for the three months ended September 30, 2023. The increase in general and administrative expenses was primarily a result of increased indirect overhead expenses and professional fees, partially offset by a decrease in payroll related costs during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. General and administrative expenses as a percentage of home sales revenues were 4.3% during each of the three months ended September 30, 2024 and 2023.
Current wording
General and Administrative. General and administrative expenses for the three months ended March 31, 2025 were $31.2 million, a decrease of $0.3 million, or 1.1%, from $31.5 million for the three months ended March 31, 2024. General and administrative expenses as a percentage of home sales revenues were 8.9% and 8.1% for the three months ended March 31, 2025 and 2024, respectively. The increase in general and administrative expenses as a percentage of home sales revenues was primarily due to lower home sales revenues during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
Other Income, Net. Other income, net of other expenses was $11.5 million for the three months ended September 30, 2024, an increase of $4.4 million from $7.2 million for the three months ended September 30, 2023. The increase in other income, net of other expenses, primarily reflects gains realized from the sale of residential lots and the increase in income associated with our investment in unconsolidated entities during the three months ended September 30, 2024.
Current wording
Other Income, Net. Other income, net of other expenses was $5.6 million for the three months ended March 31, 2025, an increase of $1.2 million from $4.4 million for the three months ended March 31, 2024. The increase in other income, net of other expenses, primarily reflects gains realized from the sale of residential lots not directly associated with our core homebuilding operations.
Previous wording
Operating Income and Net Income before Income Taxes. Operating income for the nine months ended September 30, 2024 was $166.6 million, a decrease of $6.9 million, or 4.0%, from $173.4 million for the nine months ended September 30, 2023. The overall decreases in operating income and net income before income taxes were primarily due to overall lower home closings at a lower absorption rate and higher advertising and other costs associated with the increase in average community count during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. Net income before income taxes for the nine months ended September 30, 2024 was $191.8 million, a decrease of $1.4 million, or 0.7%, from $193.2 million for the nine months ended September 30, 2023. Our reportable segments contributed to net income before income taxes during the nine months ended September 30, 2024 as follows: Central - $47.0 million, or 24.5%; Southeast - $67.6 million, or 35.2%; Northwest - $19.6 million, or 10.2%; West - $40.9 million, or 21.3%; and Florida - $19.6 million, or 10.2%.
Current wording
Operating Income and Net Income before Income Taxes. Operating income for the three months ended March 31, 2025 was $0.2 million, a decrease of $18.6 million, or 99.1%, from $18.7 million for the three months ended March 31, 2024. Net income before income taxes for the three months ended March 31, 2025 was $5.7 million, a decrease of $17.4 million, or 75.2%, from $23.1 million for the three months ended March 31, 2024. The overall decreases in operating income and net income before income taxes were primarily due to overall lower home closings at a lower absorption rate, lower gross margin and higher advertising and other costs associated with the increase in average community count during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Our reportable segments contributed to net income before income taxes during the three months ended March 31, 2025 as follows: Central - $(3.1) million, or (54.1)%; Southeast - $8.1 million, or 141.8%; Northwest - $1.2 million, or 21.1%; West - $2.5 million, or 43.4%; and Florida - $(2.5) million, or (43.0)%.
Previous wording
Income Taxes. Income tax provision for the three months ended September 30, 2024 was $22.3 million, a decrease of $0.1 million, or 0.6%, from income tax provision of $22.4 million for the three months ended September 30, 2023. The decrease in our effective tax rate to 24.3% for the three months ended September 30, 2024 from 25.1% for the three months ended September 30, 2023 was primarily a result of a decrease in the rate for the compensation limitation under Section 162(m) of the Internal Revenue Code, as amended.
Current wording
Income Taxes. Income tax provision for the three months ended March 31, 2025 was $1.7 million, a decrease of $4.3 million, or 71.4%, from income tax provision of $6.0 million for the three months ended March 31, 2024. The decrease in our income tax provision is primarily due to the overall decrease in net income before income taxes. The increase in our effective tax rate to 30.2% for the three months ended March 31, 2025 from 26.2% for the three months ended March 31, 2024 was primarily a result of an increase in the rate for the compensation cost in excess of deductions for share-based payments.
Previous wording
Net Income. Net income for the nine months ended September 30, 2024 was $145.2 million, a decrease of $1.9 million, or 1.3%, from $147.1 million for the nine months ended September 30, 2023. The decrease in net income was primarily attributed to overall lower homes closed and lower home sales revenues, partially offset by a higher gross margin during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Current wording
Net Income. Net income for the three months ended March 31, 2025 was $4.0 million, a decrease of $13.1 million, or 76.6%, from $17.1 million for the three months ended March 31, 2024. The decrease in net income was primarily attributed to overall lower homes closed, home sales revenues and gross margin during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
Our net orders decreased for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The number of homes in our backlog at September 30, 2024 decreased 21.0% compared to September 30, 2023. The decreases generally relate to the impact of ongoing affordability constraints and our decision to limit the use of incentives to the level required to achieve predetermined closing targets during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Current wording
Our net orders decreased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the increase in new communities which typically open at a slower sales pace and overall lower demand. The number of homes in our backlog at March 31, 2025 decreased 22.1% compared to March 31, 2024. The decrease generally relates to the impact of ongoing affordability constraints and our decision to limit the use of incentives during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
(4)As of September 30, 2024, we had 212 units related to bulk sales agreements associated with our wholesale business.
Current wording
(4)As of March 31, 2025, we had 253 units related to bulk sales agreements associated with our wholesale business.
Previous wording
(5)As of September 30, 2023, we had 273 units related to bulk sales agreements associated with our wholesale business.
Current wording
(5)As of March 31, 2024, we had 178 units related to bulk sales agreements associated with our wholesale business.
Previous wording
We had 138 and 117 active communities as of September 30, 2024 and December 31, 2023, respectively. Generally, it takes us two to three years to turn raw or undeveloped land into an active community. To mitigate our exposure to real estate inventory risks, we have utilized, on a limited and strategic basis, land banking financing arrangements.
Current wording
We had 146 and 151 active communities as of March 31, 2025 and December 31, 2024, respectively. Generally, it takes us two to three years to turn raw or undeveloped land into an active community. To mitigate our exposure to real estate inventory risks, we have utilized, on a limited and strategic basis, land banking financing arrangements.
Previous wording
Our lot inventory decreased to 68,564 owned or controlled lots as of September 30, 2024 from 71,081 owned or controlled lots as of December 31, 2023, primarily related to our discipline in the evaluation and selective approval of new land deals.
Current wording
Our lot inventory decreased to 67,792 owned or controlled lots as of March 31, 2025 from 70,899 owned or controlled lots as of December 31, 2024, primarily related to our discipline in the evaluation and selective approval of new land deals.
Previous wording
The table below shows (i) home closings by reportable segment for the nine months ended September 30, 2024 and (ii) our owned or controlled lots by reportable segment as of September 30, 2024.
Current wording
The table below shows (i) home closings by reportable segment for the three months ended March 31, 2025 and (ii) our owned or controlled lots by reportable segment as of March 31, 2025.
Previous wording
(1)Of the 54,029 owned lots as of September 30, 2024, 38,734 were raw/under development lots and 15,295 were finished lots.
Current wording
(1)Of the 53,761 owned lots as of March 31, 2025,37,064 were raw/under development lots and 16,697 were finished lots.
Previous wording
When entering a new community, we intend to build a sufficient number of move-in ready homes to meet our budgets. We base future home starts on home closings. As homes are closed, we start more homes to maintain our inventory. As of September 30, 2024, we had a total of 2,491 completed homes, including information centers, and 1,977 homes in progress.
Current wording
When entering a new community, we intend to build a sufficient number of move-in ready homes to meet our budgets. We base future home starts on home closings. As homes are closed, we start more homes to maintain our inventory. As of March 31, 2025, we had a total of 2,702 completed homes, including information centers, and 1,522 homes in progress.
Previous wording
As of September 30, 2024, we had $60.9 million of cash and cash equivalents. Cash flows for each of our active communities depend on the status of the development cycle and can differ substantially from reported earnings.
Current wording
As of March 31, 2025, we had $57.6 million of cash and cash equivalents. Cash flows for each of our active communities depend on the status of the development cycle and can differ substantially from reported earnings.
Previous wording
On October 9, 2024, we entered into a Fifth Amendment to Fifth Amended and Restated Credit Agreement with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (the “Fifth Amendment”), which amended the 2023 Credit Agreement (as so amended by the Fifth Amendment, the “Credit Agreement”). The Credit Agreement provides for a $1.205 billion revolving credit facility, which can be increased at the request of the Company by up to $95.0 million, subject to the terms and conditions of the Credit Agreement. The Credit Agreement matures on April 28, 2028 with respect to $1.085 billion, or 90.0%, of the $1.205 billion of commitments thereunder and on April 28, 2025 with respect to 10.0% of the commitments thereunder.
Current wording
On April 28, 2025, we entered into a Sixth Amendment to Fifth Amended and Restated Credit Agreement with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (the “Sixth Amendment”), which amended the 2024 Credit Agreement (as so amended by the Sixth Amendment, the “Credit Agreement”). The Credit Agreement provides for a $1.1825 billion revolving credit facility, which can be increased at the request of the Company by up to $95.0 million, subject to the terms and conditions of the Credit Agreement. The Credit Agreement matures on April 28, 2029 with respect to $972.5 million, or 82.2%, of the $1.1825 billion of commitments thereunder and on April 28, 2028 with respect to 17.8% of the commitments thereunder.
Previous wording
The borrowings and letters of credit outstanding under the Credit Agreement, together with the outstanding principal balance of our 4.000% Senior Notes due 2029 (the “2029 Senior Notes”) and our 8.750% Senior Notes due 2028 (the “2028 Senior Notes”), may not exceed the borrowing base under the Credit Agreement. The borrowing base primarily consists of a percentage of commercial land, land held for development, lots under development and finished lots held by the Company and its subsidiaries that guarantee the obligations under the Credit Agreement. As of September 30, 2024, the borrowing base under the 2023 Credit Agreement was $2.0 billion, of which the maximum available to borrow is $1.9 billion. As of September 30, 2024, borrowings under the 2023 Credit Agreement and the outstanding principal amount of the 2029 Senior Notes and the 2028 Senior Notes totaled approximately $1.6 billion, $26.1 million of letters of credit were outstanding and $314.5 million was available to borrow under the 2023 Credit Agreement.
Current wording
The borrowings and letters of credit outstanding under the Credit Agreement, together with the outstanding principal balance of our 8.750% Senior Notes due 2028 (the “2028 Senior Notes”), our 4.000% Senior Notes due 2029 (the “2029 Senior Notes”) and our 7.000% Senior Notes due 2032 (the “2032 Senior Notes”), may not exceed the borrowing base under the Credit Agreement. The borrowing base primarily consists of a percentage of commercial land, land held for development, lots under development and finished lots held by the Company and its subsidiaries that guarantee the obligations under the Credit Agreement. As of March 31, 2025, the borrowing base under the 2024 Credit Agreement was $2.0 billion, of which the maximum available to borrow was $2.0 billion. As of March 31, 2025, borrowings under the 2024 Credit Agreement and the outstanding principal amount of the 2028 Senior Notes, the 2029 Senior Notes and the 2032 Senior Notes totaled approximately $1.6 billion, $24.5 million of letters of credit were outstanding and $302.4 million was available to borrow under the 2024 Credit Agreement.
Previous wording
Borrowings under the Credit Agreement bear interest, payable monthly in arrears, at the Company’s option, at either (1) the Adjusted Term SOFR (defined as a term SOFR that is based on a fixed 1, 3 or 6 month interest period, as selected by the Company, plus a 10, 15 or 25 basis point adjustment, respectively), which rate is subject to a 50 basis point floor, plus an applicable margin ranging from 145 basis points to 210 basis points (the “Applicable Margin”) based on the Company’s leverage ratio as determined in accordance with a pricing grid, or (2) the Base Rate (defined as a term SOFR that is based on a daily variable 1 month interest period plus a 10 basis point adjustment), subject to a 50 basis point floor, plus the Applicable Margin. At September 30, 2024, the Applicable Margin was 1.85%, and SOFR was 4.85%, subject to the 0.50% SOFR floor as included in the 2023 Credit Agreement.
Current wording
Borrowings under the Credit Agreement bear interest, payable monthly in arrears, at the Company’s option, at either (1) the Adjusted Term SOFR (defined as a term SOFR that is based on a fixed 1, 3 or 6 month interest period, as selected by the Company, plus a 10, 15 or 25 basis point adjustment, respectively), which rate is subject to a 50 basis point floor, plus an applicable margin ranging from 145 basis points to 210 basis points (the “Applicable Margin”) based on the Company’s leverage ratio as determined in accordance with a pricing grid, or (2) the Base Rate (defined as a term SOFR that is based on a daily variable 1 month interest period plus a 10 basis point adjustment), subject to a 50 basis point floor, plus the Applicable Margin. At March 31, 2025, the Applicable Margin was 1.85%, and SOFR was 4.32%, subject to the 0.50% SOFR floor as included in the 2024 Credit Agreement.
Previous wording
On November 21, 2023, we issued $400.0 million aggregate principal amount of the 2028 Senior Notes in an offering to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S (“Regulation S”) under the Securities Act. Interest on the 2028 Senior Notes accrues at a rate of 8.750% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The 2028 Senior Notes mature on December 15, 2028. The terms of the 2028 Senior Notes are governed by an Indenture, dated as of July 6, 2018, and
Current wording
On November 15, 2024, we issued $400.0 million aggregate principal amount of the 2032 Senior Notes in an offering to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S (“Regulation S”) under the Securities Act. Interest on the 2032 Senior Notes accrues at a rate of 7.000% per annum, payable semi-annually in arrears on May 15 and November 15 of each year. The 2032 Senior Notes mature on November 15, 2032. The terms of the 2032 Senior Notes are governed by an Indenture, dated as of July 6, 2018, and
Previous wording
Fourth Supplemental Indenture thereto, dated as of November 21, 2023, as may be supplemented from time to time, among us, our subsidiaries that guarantee our obligations under the Credit Agreement and Regions Bank, as trustee.
Current wording
Fifth Supplemental Indenture thereto, dated as of November 15, 2024, as may be supplemented from time to time, among us, our subsidiaries that guarantee our obligations under the Credit Agreement and Regions Bank, as trustee.
Previous wording
Under these letters of credit, surety bonds and financial guarantees, we are committed to perform certain development and construction activities and provide certain guarantees in the normal course of business. Outstanding letters of credit, surety bonds and financial guarantees under these arrangements totaled $376.3 million as of September 30, 2024. Although significant development and construction activities have been completed related to the improvements at these sites, the letters of credit and surety bonds are not generally released until all development and construction activities are completed. We do not believe that it is probable that any outstanding letters of credit, surety bonds or financial guarantees as of September 30, 2024 will be drawn upon.
Current wording
Under these letters of credit, surety bonds and financial guarantees, we are committed to perform certain development and construction activities and provide certain guarantees in the normal course of business. Outstanding letters of credit, surety bonds and financial guarantees under these arrangements totaled $427.2 million as of March 31, 2025. Although significant development and construction activities have been completed related to the improvements at these sites, the letters of credit and surety bonds are not generally released until all development and construction activities are completed. We do not believe that it is probable that any outstanding letters of credit, surety bonds or financial guarantees as of March 31, 2025 will be drawn upon.
Previous wording
In February 2022, our Board of Directors (the “Board”) approved a $200.0 million increase to our previously authorized stock repurchase program, pursuant to which we may purchase up to $550.0 million of shares of our common stock through open market transactions, privately negotiated transactions or otherwise in accordance with applicable laws. During the three months ended September 30, 2024, we did not repurchase any shares of our common stock. During the nine months ended September 30, 2024, we repurchased 172,990 shares of our common stock for $18.0 million to be held as treasury stock. During the three and nine months ended September 30, 2023, we did not repurchase any shares of our common stock. A total of 3,112,462 shares of our common stock has been repurchased since our stock repurchase program commenced. As of September 30, 2024, we may purchase up to $193.5 million of shares of our common stock under our stock repurchase program. The timing, amount and other terms and conditions of any repurchases of shares of our common stock under our stock repurchase program will be determined by our management at its discretion based on a variety of factors, including the market price of our common stock, corporate considerations, general market and economic conditions and legal requirements. Our stock repurchase program may be modified, discontinued or suspended at any time.
Current wording
In February 2022, our Board of Directors (the “Board”) approved a $200.0 million increase to our previously authorized stock repurchase program, pursuant to which we may purchase up to $550.0 million of shares of our common stock through open market transactions, privately negotiated transactions or otherwise in accordance with applicable laws. During the three months ended March 31, 2025 and 2024, we repurchased 41,685 shares of our common stock for $3.1 million to be held as treasury stock and 89,227 shares of our common stock for $10.0 million to be held as treasury stock, respectively. A total of 3,289,024 shares of our common stock has been repurchased since our stock repurchase program commenced. As of March 31, 2025, we may purchase up to $177.7 million of shares of our common stock under our stock repurchase program. The timing, amount and other terms and conditions of any repurchases of shares of our common stock under our stock repurchase program will be determined by our management at its discretion based on a variety of factors, including the market price of our common stock, corporate considerations, general market and economic conditions and legal requirements. Our stock repurchase program may be modified, discontinued or suspended at any time.
Previous wording
Net cash used in operating activities was $200.7 million during the nine months ended September 30, 2024. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development. Net cash used in operating activities during the nine months ended September 30, 2024 was primarily driven by cash outflow from the $390.9 million decrease in the net change in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity and partially offset by net income of 145.2 million.
Current wording
Net cash used in operating activities was $127.1 million during the three months ended March 31, 2025. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development. Net cash used in operating activities during the three months ended March 31, 2025 was primarily driven by cash outflow from the $186.6 million decrease in the net change in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity and a $27.9 million decrease in the net change in accrued expenses and other liabilities, partially offset by increases in the net changes of $43.8 million in other assets and $18.6 million in accounts payable.
Previous wording
Net cash used in operating activities was $22.7 million during the nine months ended September 30, 2023. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development. Net cash used in operating activities during the nine months ended September 30, 2023 was primarily driven by cash outflow from the $194.4 million increase in the net change in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity and partially offset by net income of $147.1 million.
Current wording
Net cash used in operating activities was $99.5 million during the three months ended March 31, 2024. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development. Net cash used in operating activities during the three months ended March 31, 2024 was primarily driven by cash outflow from the $139.6 million increase in the net change in real estate inventory, which was primarily related to our homes under construction and land acquisitions and development level of activity and the $16.6 million decrease in the net change in accrued expenses and other liabilities, partially offset by net income of $17.1 million as well as the $14.2 million increase in accounts receivable and the $14.5 million increase in the net change in accounts payable.
Previous wording
Net cash used in investing activities was $6.6 million during the nine months ended September 30, 2024, primarily due to additional investment in unconsolidated entities.
Current wording
Net cash used in investing activities was $0.2 million during the three months ended March 31, 2025, primarily due to an additional $1.5 million investment in unconsolidated entities, offset by $2.1 million in return of capital.
Previous wording
Net cash provided by financing activities was $219.3 million during the nine months ended September 30, 2024, primarily driven by $507.7 million of borrowings under our 2023 Credit Agreement, offset by $214.0 million of repayments on our 2023 Credit Agreement and payments of $60.3 million related to a financing arrangement with a third-party land banker. In addition, during the nine months ended September 30, 2024, we repurchased $18.0 million of shares of our common stock under our stock repurchase program to be held as treasury stock.
Current wording
Net cash provided by financing activities was $131.8 million during the three months ended March 31, 2025, primarily driven by $172.5 million of borrowings under our 2024 Credit Agreement, offset by $30.0 million of repayments on our 2024 Credit Agreement and payments of $8.6 million related to a financing arrangement with a third-party land banker. In addition, during the three months ended March 31, 2025, we repurchased $3.1 million of shares of our common stock under our stock repurchase program to be held as treasury stock.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report — wording carried elsewhere
Key financial results as of and for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, were as follows:
Previous report — wording carried elsewhere
For reconciliations of the non-GAAP financial measures of adjusted gross margin and EBITDA to the most directly comparable GAAP financial measures, please see “—Non-GAAP Measures.”
Previous report — wording carried elsewhere
Included within our home sales revenues for the three months ended September 30, 2024 was $49.5 million in wholesale revenues resulting from 160 home closings, representing 9.1% of the 1,757 total homes closed during the three months ended September 30, 2024. Included within our home sales revenues for the three months ended September 30, 2023 was $43.3 million in wholesale revenues resulting from 139 home closings, representing 7.9% of the 1,751 total homes closed during the three months ended September 30, 2023.
Previous report — wording carried elsewhere
Selling Expenses. Selling expenses for the three months ended September 30, 2024 were $55.2 million, an increase of $5.4 million, or 10.9%, from $49.8 million for the three months ended September 30, 2023. The increase in selling expenses was primarily due to an increase in advertising expense and an increase in personnel costs as a result of an increase in communities for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Sales commissions decreased to $27.6 million for the three months ended September 30, 2024 from $27.9 million for the three months ended September 30, 2023, primarily due to a decrease in outside commissions, partially offset by an increase in our in-house commissions due to an overall increase in revenues during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Selling expenses as a percentage of home sales revenues were 8.5% and 8.1% for the three months ended September 30, 2024 and 2023, respectively. The increase in selling expenses as a percentage of home sales revenues was primarily due to higher advertising and other personnel expenses incurred during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Previous report — wording carried elsewhere
Homes Sales. Our home sales revenues, home closings, average sales price per home closed (ASP), average community count and average monthly absorption rate by reportable segment for the nine months ended September 30, 2024 and 2023 were as follows (revenues in thousands):
Previous report — wording carried elsewhere
Home sales revenues for the nine months ended September 30, 2024 were $1.6 billion, a decrease of $105.0 million, or 6.0%, from $1.8 billion for the nine months ended September 30, 2023. The decrease in home sales revenues was primarily due to a 9.6% decrease in homes closed, offset by an increase in the average sales price per home closed during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The overall decrease in home closings was a result of a lower absorption rate, partially offset by a higher average community count, during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The overall increase in average community count relates to timing associated with new community openings, offset by the close out of some communities and transition between certain active communities during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The average sales price per home closed during the nine months ended September 30, 2024 was $366,007, an increase of $13,932, or 4.0%, from the average sales price per home closed of $352,075 for the nine months ended September 30, 2023. The increase in the average sales price per home closed was primarily due to geographic mix and a favorable pricing environment. The overall decrease in absorption rate generally relates to the impact of ongoing affordability constraints, new community openings, and the overall increase in community count.
Previous report — wording carried elsewhere
Other Income, Net. Other income, net of other expenses was $25.3 million for the nine months ended September 30, 2024, an increase of $5.5 million from $19.8 million for the nine months ended September 30, 2023. The increase in other income, net of other expenses, primarily reflects gains realized from the sale of residential lots and the increase in income associated with our investment in unconsolidated entities.