Dream Finders Homes, Inc.
For the period ended Sep 30, 2025. Filed Oct 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.
Sep 30, 2025 · Filed Oct 30, 2025
DFH$12.40-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0001825088-25-000054
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001628280-25-047455
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 164 previous paragraphs and 162 current paragraphs.
81 unchanged; 65 reworded; 15 added; 12 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 20 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 (15)
Current report
The macroeconomic uncertainty has continued to impact the homebuilding industry over the last quarter. Homebuyers across our markets are still facing significant affordability challenges, especially in entry-level price points. Considering this backdrop, we remain focused on providing assistance through mortgage buydown commitments and compelling incentives, including flexible closing dollars. While we face intense competition, we are committed to our land-light strategy, our operational improvements and to building a high-quality, affordable product that meets our customers’ needs and differentiates us in our markets. Our long-term outlook remains positive; we are optimistic about future housing demand and encouraged by the recent improvement in mortgage interest rates. We recognize that the first nine months of 2025 have been challenging and expect these conditions will persist through year end.
Current report
Southwest Florida
Current report
Sales began in our southwest Florida division during the three months ended September 30, 2025, contributing to our organic growth in the Southeast segment.
Current report
Homebuilding Revenues. The decrease in homebuilding revenues was primarily attributable to the consolidated ASP of homes closed for the three months ended September 30, 2025, which decreased 8% when compared to the three months ended September 30, 2024. The decrease in ASP was mostly a result of changes in product mix and, to a lesser extent, the increased use of sales incentives of $7 million during the third quarter of 2025. The decrease in homebuilding revenues was partially offset by an increase in home closings of 26 homes for the three months ended September 30, 2025 to 1,915 from 1,889 home closings for the three months ended September 30, 2024. The Liberty Communities acquisition contributed 185 home closings with an ASP of $329,034.
Current report
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the three months ended September 30, 2025 were $242 million, a decrease of $42 million, or 15%, from $284 million for the three months ended September 30, 2024. This decline in revenue was driven by a decrease in ASP of $41,409, or 9%, and lower home closings of 33, or 5%. Homebuilding gross margin percentage was 17.1% for the three months ended September 30, 2025, representing a decrease of 320 bps, or 16%, when compared to the three months ended September 30, 2024. The decrease in homebuilding gross margin percentage was mostly the result of increased sales incentives, as well as higher financing and closing costs.
Current report
Contingent Consideration Revaluation. Contingent consideration revaluation expense, which only relates to the MHI acquisition for 2025, decreased by $4 million when comparing the three months ended September 30, 2025 and 2024. The earnout period for the MHI acquisition concluded as of the end of the third quarter of 2025 and the final payment is due in December 2025.
Current report
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Current report
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the nine months ended September 30, 2025 were $755 million, a decrease of $3 million, or less than 1%, from $758 million for the nine months ended September 30, 2024. This decline in revenue was primarily driven by a decrease in home closings of 13, or 1%, and ASP of $1,572, or less than 1%, for the nine months ended September 30, 2025 compared to the nine months September 30, 2024. Homebuilding gross margin percentage of 18.8% for the nine months ended September 30, 2025 remained relatively consistent when compared to the nine months ended September 30, 2024.
Current report
Net Sales, Closings and Backlog
Current report
(2)Excluding built-for-rent activity, starts in the Mid-Atlantic segment increased 31% during the quarter ended September 30, 2025 when compared to the quarter ended September 30, 2024. This increase was primarily due to starts from the January 2025 Liberty Communities acquisition.
Current report
(3)The lower net sales and starts in the Midwest segment were primarily the result of weakening demand in the Texas markets.
Current report
(2)The lower net sales and starts in the Midwest segment were primarily the result of weakening demand in the Texas markets.
Current report
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Current report
On August 21, 2025, we amended the Credit Agreement to, among other things, (i) increase the aggregate commitments under the Credit Agreement to $1.5 billion, subject to a borrowing base; (ii) extend the maturity date from June 4, 2027 to August 21, 2028 for certain new and existing lenders comprising $1.2 billion of the $1.5 billion of aggregate commitments under the Credit Agreement, and; (iii) update the minimum tangible net worth covenant, which resulted in an increase to the base component of such covenant to $981 million.
Current report
On September 5, 2025, we issued $300 million in aggregate principal amount of 6.875% senior unsecured notes due September 15, 2030 (the “2030 Notes”). Interest on the 2030 Notes is payable in arrears semiannually on each March 15 and September 15, beginning March 15, 2026. The net proceeds from the 2030 Notes were used to repay a portion of the then outstanding balance under the Credit Agreement.
Removed paragraphs (12)
Previous report
The macroeconomic uncertainty of the homebuilding industry persists as homebuyers in our markets continue to confront home affordability challenges and we face intense competition. Despite sustained demand for housing, the affordability constraints, due in part to the high mortgage interest rates, have led to increased complexity and cost associated with actionable marketing and sales strategies. Additionally, the geopolitical uncertainty and potentially looming tariffs add to the pressure. Although our long-term outlook remains positive, the first half of 2025 has been marked by subdued market conditions that could persist through year-end.
Previous report
Phoenix, Arizona Sales
Previous report
In Q2 2025, we sold 7 homes and closed 4 homes in our Phoenix, Arizona division, expanding our presence within the Midwest segment.
Previous report
(1)Contingent consideration revaluation, which is comprised of amounts from the homebuilding segments (“contingent consideration”), excludes $0.3 million and $0.6 million of Corporate contingent consideration expenses for the three months ended June 30, 2025 and 2024, respectively. Corporate amounts represent contingent consideration relating to our homebuilding business that we do not charge to the segments.
Previous report
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the three months ended June 30, 2025 were $275 million, an increase of $11 million, or 4%, from $264 million for the three months ended June 30, 2024. This revenue growth was primarily driven by an increase in ASP of $10,630, or 2%. Homebuilding gross margin percentage was 17.9% for the three months ended June 30, 2025, representing a decrease of 30 bps, or 2%, when compared to the three months ended June 30, 2024. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs, as well as increased closing cost incentives.
Previous report
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Previous report
(1)Contingent consideration revaluation, which is comprised of amounts from the homebuilding segments and Corporate, includes $0.3 million and $0.9 million of Corporate contingent consideration for the six months ended June 30, 2025 and 2024, respectively. Corporate amounts are included as they relate to our homebuilding business.
Previous report
Excluding Liberty, homebuilding revenues in the Southeast segment decreased by 6% when comparing the six months ended June 30, 2025 and 2024 mostly due to a lower ASP of $454,748, a decrease of $37,572, or 8%, partially offset by 1,289, or 3%, higher home closings. Without Liberty, homebuilding gross margin percentage was 19.1% for the six months ended June 30, 2025, representing a decrease of 30 bps, or 2%, when compared to the six months ended June 30, 2024. The decline in this homebuilding gross margin percentage was primarily the result of higher land and financing costs and changes in product mix.
Previous report
Mid-Atlantic. Our Mid-Atlantic segment homebuilding revenues for the six months ended June 30, 2025 were $513 million, an increase of $39 million, or 8%, from $474 million for the six months ended June 30, 2024. This revenue growth was primarily driven by an increase in ASP and home closings of $19,474, or 5%, and 20, or 2%, respectively, for the six months ended June 30, 2025 compared to the six months June 30, 2024. Homebuilding gross margin percentage was 19.6% for the six months ended June 30, 2025, representing an increase of 150 bps, or 8%, when compared to the six months ended June 30, 2024. The increase in homebuilding gross margin percentage was mostly the result of direct cost reductions and changes in product mix, particularly from the Crescent operations, which had a gross margin of 23.1%, partially offset by higher land and financing costs.
Previous report
Net Sales, Backlog and Closings
Previous report
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Previous report
Mortgage Banking
Reworded paragraphs (65)
Previous wording
We design, build and sell homes primarily in high-growth markets using our asset-light lot acquisition strategy. Our primary focus is on constructing and selling single-family homes across entry-level, first-time move-up, second-time move-up, and active adult markets, as well as homes under built-for-rent contracts. To fully serve our homebuyers and capture ancillary business opportunities, we have financial services operations that offer mortgage banking solutions and title insurance—inclusive of agency and underwriting services. Additionally, we offer homeowners insurance and ancillary products to homebuyers.
Current wording
We design, build and sell homes primarily in high-growth markets using our asset-light lot acquisition strategy. Our primary focus is on constructing and selling single-family homes across entry-level, first-time move-up, second-time move-up and active adult markets, as well as homes under built-for-rent contracts. To fully serve our homebuyers and capture ancillary business opportunities, we have financial services operations that offer mortgage banking solutions and title insurance—inclusive of agency and underwriting services. Additionally, we offer homeowners insurance and adjacent products to homebuyers
Previous wording
The following table summarizes our results of operations and other financial data (in thousands, except per share amounts) for the periods indicated:
Current wording
The following table summarizes our results of operations and other financial data (in thousands, except per share amounts and percentages) for the periods indicated:
Previous wording
(2)Refer to Note 13, Earnings Per Share to the condensed consolidated financial statements for disclosures related to the calculation of EPS. Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the redeemable preferred stock and the associated preferred dividends.
Current wording
(2)Refer to Note 13, Earnings Per Share to the condensed consolidated financial statements for disclosures related to the calculation of earnings per share (“EPS”). Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the redeemable preferred stock and the associated preferred dividends.
Previous wording
The following table sets forth our results of homebuilding operationsand other financial data (in thousands) for the periods indicated:
Current wording
The following table sets forth our results of homebuilding operations, other financial data (in thousands, except for percentages) and other operating data for the periods indicated:
Previous wording
(2)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.
Current wording
(1)Average sales price of homes closed is calculated based on homebuilding revenues, adjusted for the impact of percentage of completion revenues, and excluding deposit forfeitures and land sales, over homes closed.
Previous wording
(3)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.
Current wording
(2)Homebuilding gross margin is homebuilding revenues less homebuilding cost of sales.
Previous wording
(5)Adjusted homebuilding gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
Current wording
(4)Adjusted homebuilding gross margin and net homebuilding debt to net capitalization are non-GAAP financial measures. For definitions of these non-GAAP financial measures and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures.”
Previous wording
(6)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.
Current wording
(5)A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five homesites remaining to sell.
Previous wording
Homebuilding Cost of Sales and Homebuilding Gross Margin. The higher homebuilding cost of sales was primarily due to the increase in home closings for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. In addition to the lower ASP, the decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended June 30, 2025 and 2024 was primarily attributable to higher land and financing costs, partially offset by direct cost reductions and cycle-time improvements.
Current wording
Homebuilding Cost of Sales and Homebuilding Gross Margin. The lower homebuilding cost of sales was primarily due to the geographical changes in product mix, partially offset by the slight increase in home closings for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease in homebuilding gross margin as a percentage of homebuilding revenues when comparing the three months ended September 30, 2025 and 2024 was primarily attributable to the increased use of sales incentives, as well as higher land and financing costs.
Previous wording
Southeast. Our Southeast segment homebuilding revenues for the three months ended June 30, 2025 were $368 million, an increase of $27 million, or 8%, from $341 million for the three months ended June 30, 2024. This revenue growth was primarily driven by an increase in home closings of 174, or 26%, which was partially offset by a 14% decrease in the ASP of homes closed. Homebuilding gross margin percentage was 17.9% for the three months ended June 30, 2025, representing a decrease of 280 basis points (“bps”), or 14%, when compared to the three months ended June 30, 2024. The decrease in homebuilding gross margin percentage was mostly the result of lower ASP from increased sales incentives and changes in product mix, as well as higher land and financing costs. Liberty Communities contributed $56 million in homebuilding revenues and 150 home closings with an ASP of $370,858. Liberty Communities had a gross margin of 17.7% for the three months ended June 30, 2025.
Current wording
Southeast. Our Southeast segment homebuilding revenues for the three months ended September 30, 2025 were $317 million, an increase of $24 million, or 8%, from $293 million for the three months ended September 30, 2024. This revenue growth was primarily driven by an increase in home closings of 117, or 20%, which was partially offset by a 9% decrease in the ASP of homes closed. Homebuilding gross margin percentage was 18.8% for the three months ended September 30, 2025, representing a decrease of 80 basis points (“bps”), or 4%, when compared to the three months ended September 30, 2024. The decrease in homebuilding gross margin percentage was mostly the result of increased sales incentives, as well as higher land and financing costs, partially offset by direct cost reductions. The Liberty Communities operations in Atlanta (“Liberty Atlanta”) contributed $48 million in homebuilding revenues and 139 home closings with an ASP of $348,231. Liberty Atlanta had a gross margin percentage of 19.6% for the three months ended September 30, 2025.
Previous wording
Midwest. Our Midwest segment homebuilding revenues for the three months ended June 30, 2025 were $457 million, an increase of $10 million, or 2%, from $447 million for the three months ended June 30, 2024. This increase was primarily due to higher home closings of 37, or 5% and strategic lot sales within the segment, resulting in $13 million of additional homebuilding revenues, partially offset by a decrease of 5% in the ASP of homes closed. Homebuilding gross margin percentage was 14.6% for the three months ended June 30, 2025, representing a decrease of 350 bps, or 19%, when compared to the three months ended June 30, 2024. The decrease in homebuilding gross margin percentage was primarily due to lower ASP from a strategic change in product offerings and higher sales incentives, as well as an increase in land and financing costs.
Current wording
Midwest. Our Midwest segment homebuilding revenues for the three months ended September 30, 2025 were $357 million, a decrease of $52 million, or 13%, from $409 million for the three months ended September 30, 2024. This decrease was primarily due to lower home closings of 58, or 8%, and a decrease of 5% in the ASP of homes closed. The reduction in ASP is mostly the result of a strategic change in product offerings. Homebuilding gross margin percentage was 16.7% for the three months ended September 30, 2025, representing a decrease of 140 bps, or 8%, when compared to the three months ended September 30, 2024. The decrease in homebuilding gross margin percentage was primarily due to changes in geographic product mix and higher sales incentives, as well as an increase in land costs, partially offset by direct cost reductions.
Previous wording
Selling, General and Administrative Expense. Selling, general and administrative expense for the homebuilding segments (“SG&A”) as a percentage of homebuilding revenues was 12.2% for the three months ended June 30, 2025, an increase of 300 bps from 9.2% for the three months ended June 30, 2024, which resulted in an increase of $37 million. The dollar and percentage increase in SG&A was primarily attributable to the $25 million increase in spend on forward mortgage commitment programs to allow our homebuyers to access lower mortgage interest rates on home loans during the three months ended June 30, 2025 compared to June 30, 2024. Additionally, for the three months ended June 30, 2025, SG&A included higher compensation costs of $9 million and marketing and other general expenses of $3 million, largely due to our continued growth, including the January 2025 acquisition of Liberty Communities, the May 2025 acquisition of Green River Builders and our operational expansions in Florida and Arizona. As a result of the Liberty acquisition, there was SG&A of $8 million in the second quarter of 2025 that was not included in the second quarter of 2024.
Current wording
Selling, General and Administrative Expense. Selling, general and administrative expense for the homebuilding segments (“SG&A”) as a percentage of homebuilding revenues was 11.7% for the three months ended September 30, 2025, an increase of 140 bps from 10.3% for the three months ended September 30, 2024, an increase of $6 million. The dollar and percentage increase in SG&A was primarily attributable to the $5 million increase in spend on forward mortgage commitment programs to allow our homebuyers to access lower mortgage interest rates on home loans during the three months ended September 30, 2025 compared to September 30, 2024.
Previous wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily attributable to the increases in SG&A, the reduction in homebuilding gross margin, and the increase in other expense, net, partially offset by higher home closings volume and, to a lesser extent, the income from contingent consideration revaluation, all of which are explained above.
Current wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily attributable to the reduction in homebuilding revenues and gross margin and, to a lesser extent, the increases in SG&A, all of which are explained above.
Previous wording
The following table sets forth our results of homebuilding operations and balance sheet data (in thousands) for the periods indicated:
Current wording
The following table sets forth our results of homebuilding operations, other financial data (in thousands, except for percentages) and other operating data for the periods indicated:
Previous wording
See notes (2) to (5) under results of homebuilding operations for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Current wording
See notes (1) to (4) under results of homebuilding operations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.
Previous wording
The following table summarizes home closings and ASP of homes closed by homebuilding segment for the six months ended June 30, 2025 and 2024:
Current wording
The following table summarizes home closings and ASP of homes closed by homebuilding segment for the nine months ended September 30, 2025 and 2024:
Previous wording
The following table presents income before taxes (in thousands) and homebuilding gross margin percentage by segment for the six months ended June 30, 2025 and 2024:
Current wording
The following table presents income before taxes (in thousands) and homebuilding gross margin percentage by segment for the nine months ended September 30, 2025 and 2024:
Previous wording
Homebuilding Revenues. The increase in homebuilding revenues was primarily attributable to 4,157 home closings for the six months ended June 30, 2025, an increase of 471 homes, or 13%, from the 3,686 home closings for the six months ended June 30, 2024. The increase was largely attributable to the Midwest segment, which had an increase of 168 closings with an ASP of $566,470, which was the highest ASP of our homebuilding segments. Additionally, 286 home closings with an ASP of $356,584 were contributed by the Liberty Communities acquisition, 240 of which were included in the Southeast segment, which had a total increase in home closings of 283. The consolidated ASP of homes closed decreased 3% when comparing the six months ended June 30, 2025 to the six months ended June 30, 2024, primarily a result of the increased use of sales incentives by $55 million and changes in product mix during the period.
Current wording
Homebuilding Revenues. The increase in homebuilding revenues was primarily attributable to 6,072 home closings for the nine months ended September 30, 2025, an increase of 497 homes, or 9%, from the 5,575 home closings for the nine months ended September 30, 2024. The increase in homebuilding revenues was largely attributable to the additional 471 home closings with an ASP of $346,842 contributed by the Liberty Communities acquisition, 380 of which were included in the Southeast segment, which had a total increase in home closings of 400. Additionally, the Midwest segment had an increase of 110 closings with an ASP of $564,546, which was the highest ASP of our homebuilding segments. The higher homebuilding revenues were partially offset by the decrease in home closings and ASP from the Mid-Atlantic segment. The consolidated ASP of homes closed decreased 5% when comparing the nine months ended September 30, 2025 to the nine months ended September 30, 2024, primarily a result of the increased use of sales incentives by $62 million and changes in product mix during the period.
Previous wording
Homebuilding Cost of Sales and Homebuilding Gross Margin. The higher homebuilding cost of sales was primarily due to the increase in home closings for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. In addition to the lower ASP, the decrease in homebuilding gross margin as a percentage of homebuilding revenues, when comparing the six months ended June 30, 2025 and 2024, was primarily attributable to higher land and financing costs, partially offset by direct cost reductions. In addition, the Liberty Communities homebuilding gross margin for the six months ended June 30, 2025 included amortization of purchase accounting adjustments associated with home closings that negatively impacted the homebuilding gross margin percentage by approximately 11 bps.
Current wording
Homebuilding Cost of Sales and Homebuilding Gross Margin. The higher homebuilding cost of sales was primarily due to the increase in home closings for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. In addition to the lower ASP, the decrease in homebuilding gross margin as a percentage of homebuilding revenues, when comparing the nine months ended September 30, 2025 and 2024, was primarily attributable to higher land and financing costs, partially offset by direct cost reductions. In addition, the Liberty Communities homebuilding gross margin for the nine months ended September 30, 2025 included amortization of purchase accounting adjustments associated with home closings that negatively impacted the homebuilding gross margin percentage by approximately 6 bps.
Previous wording
Southeast. Our Southeast segment homebuilding revenues for the six months ended June 30, 2025 were $675 million, an increase of $54 million, or 9%, from $621 million for the six months ended June 30, 2024. This revenue growth was primarily driven by an increase in home closings of 283, or 23%, which was partially offset by a 10% decrease in the ASP of homes closed. Homebuilding gross margin percentage was 18.6% for the six months ended June 30, 2025, representing a decrease of 80 bps, or 4%, when compared to the six months ended June 30, 2024. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs and, to a lesser extent, a gross margin of 15.7% for the Liberty Communities operations. Liberty Communities contributed $89 million in homebuilding revenues and 240 home closings with an ASP of $370,734 for the six months ended June 30, 2025.
Current wording
Southeast. Our Southeast segment homebuilding revenues for the nine months ended September 30, 2025 were $992 million, an increase of $78 million, or 9%, from $914 million for the nine months ended September 30, 2024. This revenue growth was primarily driven by an increase in home closings of 400, or 22%, which was partially offset by a 10% decrease in the ASP of homes closed. Homebuilding gross margin percentage was 18.7% for the nine months ended September 30, 2025, representing a decrease of 80 bps, or 4%, when compared to the nine months ended September 30, 2024. The decrease in homebuilding gross margin percentage was mostly the result of higher land and financing costs and, to a lesser extent, a gross margin of 17.7% for the Liberty Communities operations, partially offset by direct cost reductions. Liberty Atlanta contributed $137 million in homebuilding revenues and 380 home closings with an ASP of $360,324 for the nine months ended September 30, 2025.
Previous wording
Midwest. Our Midwest segment homebuilding revenues for the six months ended June 30, 2025 were $882 million, an increase of $100 million, or 13%, from $782 million for the six months ended June 30, 2024. This increase was primarily due to higher home closings of 168, or 13%, partially offset by a decrease of 2% in the ASP of homes closed. Additionally, strategic lot sales within the segment, resulted in $18 million of additional homebuilding revenues during the six months ended June 30, 2025 as compared to the the previous period. Homebuilding gross margin percentage was 16.1% for the six months ended June 30, 2025, representing a decrease of 170 bps, or 10%, when compared to six months ended June 30, 2024. The reduction in homebuilding gross margin percentage was mainly due to an increase in land and financing costs, partially offset by direct cost reductions.
Current wording
Midwest. Our Midwest segment homebuilding revenues for the nine months ended September 30, 2025 were $1,239 million, an increase of $48 million, or 4%, from $1,191 million for the nine months ended September 30, 2024. This increase was primarily due to higher home closings of 110, or 5%, partially offset by a decrease of 3% in the ASP of homes closed. Additionally, strategic lot sales within the segment, resulted in $16 million of additional homebuilding revenues during the nine months ended September 30, 2025 as compared to the previous period. Homebuilding gross margin percentage was 16.3% for the nine months ended September 30, 2025, representing a decrease of 160 bps, or 9%, when compared to nine months ended September 30, 2024. The reduction in homebuilding gross margin percentage was mainly due to an increase in land and financing costs, partially offset by direct cost reductions.
Previous wording
Selling, General and Administrative Expense. Selling, general and administrative expense for the homebuilding segments (“SG&A”) as a percentage of homebuilding revenues was 12.1% for the six months ended June 30, 2025, an increase of 270 bps from 9.4% for the six months ended June 30, 2024, which resulted in an increase of $74 million. The dollar and percentage increase in SG&A was primarily attributable to higher compensation costs of $21 million, largely due to our continued growth, including the February 2024 acquisition of Crescent, the January 2025 acquisition of Liberty Communities, the May 2025 acquisition of Green River Builders, as well as our operational expansions in Florida and Arizona. Additionally, for the six months ended June 30, 2025, SG&A included $52 million of spend on forward mortgage commitment programs to allow our homebuyers to access lower mortgage interest rates on home loans, representing a $36 million increase when compared to the six months ended June 30, 2024. As a result of the Liberty acquisition described above, there was SG&A of $13 million in the six months ended June 30, 2025 that was not included in the six months ended June 30, 2024.
Current wording
Selling, General and Administrative Expense. Selling, general and administrative expense for the homebuilding segments (“SG&A”) as a percentage of homebuilding revenues was 12.0% for the nine months ended September 30, 2025, an increase of 230 bps from 9.7% for the nine months ended September 30, 2024, an increase of $79 million. The dollar and percentage increase in SG&A was primarily attributable to $72 million of spend on forward mortgage commitment programs to allow our homebuyers to access lower mortgage interest rates on home loans, representing a $41 million increase when compared to the nine months ended September 30, 2024. Additionally, for the nine months ended September 30, 2025, SG&A included higher compensation costs of $16 million, largely due to our continued growth, including acquisitions and operational expansions, as well as increased marketing and model home related expenses of $7 million due to increased active community count. As a result of the Liberty acquisition described above, there was SG&A of $18 million in the nine months ended September 30, 2025 that was not included in the nine months ended September 30, 2024.
Previous wording
Contingent Consideration Revaluation.$18 million of the change from contingent consideration expense to income for the six months ended June 30, 2025 was attributable to lower actual results achieved during the second quarter of 2025 when compared to expectations and revised pre-tax income forecasts related to the MHI acquisition for the third quarter of 2025, which is the final quarter of the earnout period for the MHI acquisition. Additionally, the earnout period related to the 2020 acquisition of H&H Constructors of Fayetteville, LLC concluded in the third quarter of 2024.
Current wording
Contingent Consideration Revaluation.$23 million of the change from contingent consideration expense to income for the nine months ended September 30, 2025 was attributable to lower actual results achieved during the nine months ended September 30, 2025 when compared to pre-tax income forecasts for the same period with regard to the MHI acquisition. The earnout period for the MHI acquisition concluded as of the end of the third quarter of 2025 and the final payment is due in December 2025. The earnout period related to the 2020 acquisition of H&H Constructors of Fayetteville, LLC concluded in the third quarter of 2024.
Previous wording
Other Expense (Income), Net. The increase in other expense, net for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to $7 million of purchase price adjustments related to the Crescent acquisition, which were recognized outside of the measurement period during the first quarter of 2025. Refer to Note 2, Acquisitions to the condensed consolidated financial statements for additional information.
Current wording
Other Expense (Income), Net. The increase in other expense, net for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 was primarily due to $7 million of purchase price adjustments related to the Crescent acquisition, which were recognized outside of the measurement period during the first quarter of 2025. Refer to Note 2, Acquisitions to the condensed consolidated financial statements for additional information.
Previous wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily attributable to the increases in SG&A and the reduction in homebuilding gross margin, partially offset by higher home closings volume and the contingent consideration income for the period, all of which are explained above.
Current wording
Income Before Taxes of Homebuilding Operations. The decrease in income before taxes of homebuilding operations during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 was primarily attributable to the increases in SG&A as well as the reduction in ASP and homebuilding gross margin, partially offset by higher home closings volume and the change in contingent consideration from expense to income, all of which are explained above.
Previous wording
As of June 30, 2025 and December 31, 2024, our lot deposits for finished lot option and land bank option contracts were $531 million and $458 million, respectively. As of June 30, 2025 and December 31, 2024, we controlled 63,180 and 54,698 lots, respectively, under finished lot option and land bank option contracts.
Current wording
As of September 30, 2025 and December 31, 2024, our lot deposits for finished lot option and land bank option contracts were $551 million and $458 million, respectively. As of September 30, 2025 and December 31, 2024, we controlled 64,341 and 54,698 lots, respectively, under finished lot option and land bank option contracts.
Previous wording
(2)As of June 30, 2025 and December 31, 2024, we had 734 and 603 controlled lots under built-for-rent contracts, respectively.
Current wording
(2)As of September 30, 2025 and December 31, 2024, we had 820 and 603 controlled lots under built-for-rent contracts, respectively.
Previous wording
A community becomes active once the model is completed or the community has its fifth net new order. A community becomes inactive when it has fewer than five units remaining to sell. Active community count is an important metric to forecast future net new orders for our business. As of June 30, 2025, we had 271 active communities, an increase of 49 communities, or 22%, as compared to 222 active communities as of June 30, 2024.
Current wording
A community becomes active once the model is completed or the community has its fifth net sale. A community becomes inactive when it has fewer than five units remaining to sell. Active community count is an important metric to forecast future net sales for our business. As of September 30, 2025, we had 283 active communities, an increase of 48 communities, or 20%, as compared to 235 active communities as of September 30, 2024.
Previous wording
Our active community count excludes communities under the built-for-rent contracts, as all sales to third-party investors occur at one point in time and these communities would have no homesites remaining to sell. As of June 30, 2025, we had 7 communities delivering closings under built-for-rent contracts, as compared to 16 communities as of June 30, 2024.
Current wording
Our active community count excludes communities under the built-for-rent contracts, as all sales to third-party investors occur at one point in time and these communities would have no homesites remaining to sell. As of September 30, 2025, we had 12 communities delivering closings under built-for-rent contracts, as compared to 13 communities as of September 30, 2024.
Previous wording
A new order (“new sale”) is reported when a customer has received preliminary mortgage approval and the sales contract has been signed by the customer, approved by us and secured by a deposit. These deposits are typically nonrefundable, but each customer situation is evaluated individually. Sales to third-party investors that intend to lease the homes (“built-for-rent contracts”) are reported when we have received a nonrefundable deposit.
Current wording
A sale is reported when a customer has received preliminary mortgage approval and the sales contract has been signed by the customer, approved by us and secured by a deposit. These deposits are typically nonrefundable, but each customer situation is evaluated individually. Sales to third-party investors that intend to lease the homes (“built-for-rent contracts”) are reported when we have received a nonrefundable deposit.
Previous wording
Net new orders (or “net sales”) are sales of homes during the period less cancellations of existing sales contracts during the period. Our cancellation rate for a given period is calculated as the total number of sales contracts cancelled during the period, divided by the total number of new sales contracts entered into during the period. When a cancellation occurs, we generally retain the customer deposit and resell the home to a new customer. Cancellations can occur for various reasons outside of our control, including customer credit issues or changes in other personal circumstances.
Current wording
Net sales are sales of homes during the period less cancellations of existing sales contracts during the period. Our cancellation rate for a given period is calculated as the total number of sales contracts cancelled during the period, divided by the total number of new sales contracts entered into during the period. Cancellations can occur for various reasons outside of our control, including customer credit issues or changes in other personal circumstances.
Previous wording
The following table presents information concerning our net sales, starts and closings in each of our homebuilding segments for the three and six months ended June 30, 2025 and 2024:
Current wording
The following table presents information concerning our net sales, starts and closings in each of our homebuilding segments for the three and nine months ended September 30, 2025 and 2024:
Previous wording
(1)Excluding built-for-rent activity, net sales in the Southeast segment increased 38% during the quarter ended June 30, 2025 when compared to the quarter ended June 30, 2024. 31% of the increase was due to net sales from the Liberty Communities acquisition on January 23, 2025.
Current wording
(1)Excluding built-for-rent activity, net sales in the Southeast segment increased 25% during the quarter ended September 30, 2025 when compared to the quarter ended September 30, 2024. This increase was due to net sales from the January 2025 Liberty Communities acquisition.
Previous wording
(1)Excluding built-for-rent activity, net sales in the Southeast segment increased 37% during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. 27% of the increase was due to net sales from the Liberty Communities acquisition on January 23, 2025.
Current wording
(1)Excluding built-for-rent activity, net sales in the Southeast segment increased 32% during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024. This increase was mostly due to net sales from the January 2025 Liberty Communities acquisition.
Previous wording
Backlog of sold homes as of June 30, 2025 was 2,513 homes valued at approximately $1.2 billion based on ASP, a decrease of 1,692 homes and $0.9 billion in value, or 40% and 43%, respectively, from 4,205 homes valued at approximately $2.1 billion as of June 30, 2024. The overall decrease in backlog was mostly reflective of a continued trend toward move-in ready spec homes relative to pre-order sales and, to a lesser extent, a reduction in built-for-rent contracts in backlog. Spec homes typically result in quicker closings and turnover of the backlog within the same reporting period. Approximately 516 of the homes in our backlog are expected to be delivered in 2026 and beyond.
Current wording
Backlog of sold homes as of September 30, 2025 was 2,619 homes valued at approximately $1.2 billion based on ASP, a decrease of 1,377 homes and $0.8 billion in value, or 34% and 42%, respectively, from 3,996 homes valued at approximately $2.0 billion as of September 30, 2024. The overall decrease in backlog was reflective of a constrained sales environment as well as a continued trend toward move-in ready spec homes relative to pre-order sales and, to a lesser extent, fewer built-for-rent contracts in backlog. Spec homes typically result in quicker closings and turnover of the backlog within the same reporting period. Approximately 1,179 of the homes in our backlog are expected to be delivered in 2026 and beyond.
Previous wording
Southeast. Backlog for the Southeast segment as of June 30, 2025 was 998 homes, a decrease of 725 from 1,723 homes as of June 30, 2024. The decrease from prior year was primarily attributable to a continued trend toward more sales of move-in-ready spec homes relative to pre-order sales and, to a lesser extent, a reduction in built-for-rent contracts in backlog.
Current wording
Southeast. Backlog for the Southeast segment as of September 30, 2025 was 1,143 homes, a decrease of 502 from 1,645 homes as of September 30, 2024. The decrease from prior year was primarily attributable to a continued trend toward more sales of move-in-ready spec homes relative to pre-order sales and, to a lesser extent, fewer built-for-rent contracts in ending backlog.
Previous wording
Mid-Atlantic. Backlog for the Mid-Atlantic segment as of June 30, 2025 was 812 homes, a decrease of 390 from 1,202 homes as of June 30, 2024. The decrease in backlog from prior year was primarily attributable to the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales. The decline in backlog value was also due to an increase in built-for-rent contracts in backlog this period, which have lower ASPs relative to retail sales contracts in backlog.
Current wording
Mid-Atlantic. Backlog for the Mid-Atlantic segment as of September 30, 2025 was 898 homes, a decrease of 211 from 1,109 homes as of September 30, 2024. The decrease in backlog from prior year was primarily attributable to the constrained sales environment and the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales. The decline in backlog value was also due to an increase in built-for-rent contracts in backlog this period, which have lower ASPs relative to retail sales contracts in backlog.
Previous wording
Midwest. Backlog for the Midwest segment as of June 30, 2025 was 703 homes, a decrease of 577 from 1,280 homes as of June 30, 2024. The decrease from prior year was mostly a result of higher closings relative to net sales, as well as the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales.
Current wording
Midwest. Backlog for the Midwest segment as of September 30, 2025 was 578 homes, a decrease of 664 from 1,242 homes as of September 30, 2024. The decrease from prior year was mostly a result of higher closings relative to net sales, as well as the continued trend toward more sales of move-in-ready spec homes relative to pre-order sales. Lower net sales in the Midwest segment were primarily the result of weakening Dallas and Austin, Texas markets.
Previous wording
Our cancellation rate for the three months ended June 30, 2025 was 14.0%, an increase of 80 bps when compared to the 13.2% cancellation rate for the three months ended June 30, 2024. Our cancellation rate for the six months ended June 30, 2025 was 12.8% , an improvement when compared to the 16.8% for the six months ended June 30, 2024. In the first quarter of 2024, we had one built-for-rent contract of 229 units that was terminated based on a strategic decision to convert the controlled lots into future retail sales. This termination contributed to the elevated cancellation rate in the Southeast segment for the six months ended June 30, 2024.
Current wording
Our cancellation rate for the three months ended September 30, 2025 was 12.5%, an improvement of 130 bps when compared to the 13.8% cancellation rate for the three months ended September 30, 2024. Our cancellation rate for the nine months ended September 30, 2025 was 12.7% , an improvement when compared to the 15.8% for the nine months ended September 30, 2024. In the first quarter of 2024, we had one built-for-rent contract of 229 units that was terminated based on a strategic decision to convert the controlled lots into future retail sales. This termination contributed to the elevated cancellation rate in the Southeast segment for the nine months ended September 30, 2024 of 26.6%.
Previous wording
The following table presents selected financial information and supplemental data for our Financial Services segment for the three and six months ended June 30, 2025 and 2024 (dollars in thousands, unless otherwise indicated):
Current wording
The following tables present selected financial information and supplemental data for our Financial Services segment for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands, unless otherwise indicated):
Showing the first 40 of 65 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(3)Calculated as a percentage of homebuilding revenues.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Homebuilding Revenues. The increase in homebuilding revenues was primarily attributable to 2,232 home closings for the three months ended June 30, 2025, an increase of 201 homes, or 10%, from 2,031 home closings for the three months ended June 30, 2024. The increase was primarily attributable to the Liberty Communities acquisition, which contributed 179 home closings with an ASP of $355,550, 150 of which were included in the Southeast segment, which had a total increase in home closings of 174. The Midwest segment had an increase of 37 closings with an ASP of $553,989, which is the highest ASP of our homebuilding segments. The consolidated ASP of homes closed decreased 7% when comparing the three months ended June 30, 2025 to the three months ended June 30, 2024, primarily a result of the increased use of sales incentives by $36 million and changes in product mix during the second quarter of 2025.
Previous report — wording carried elsewhere
Contingent Consideration Revaluation.$17 million of the change from contingent consideration expense to contingent consideration income for the three months ended June 30, 2025 was attributable to lower actual results achieved during the period when compared to expectations and revised pre-tax income forecasts related to the MHI acquisition for the third quarter of 2025, which is the final quarter of the earnout period for the MHI acquisition.
Previous report — wording carried elsewhere
(1)Represents the number of homes in backlog from the previous period, plus net sales during the period, minus the number of home closings during the current period.
Previous report — wording carried elsewhere
The $18 million, or 100%, increase in mortgage revenues, $9 million of the increase in financial services expense and $3 million of the increase in the financial services income before taxes for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, respectively, were all primarily due to the consolidation of Jet HomeLoans beginning July 1, 2024. The income before taxes of Jet HomeLoans prior to July 1, 2024 was included in income from unconsolidated entities in the Condensed Consolidated Statements of Operations.
Previous report — wording carried elsewhere
(4)Calculated as a percentage of homebuilding revenues.
Previous report — wording carried elsewhere
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.