Mortgage bankers at major U.S. homebuilders saw their pre-tax earnings decline for the period ending March 31, mirroring the significant year-over-year declines in net income for the period ending March 31 reported by a quartet of U.S. homebuilders.
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Some analysts even warn against it
However, some of those just reporting provided positive comments on their performance, even in the face of a mortgage rate environment that changed radically during the quarter.
The Mortgage Bankers Association’s March Builder Application Survey confirmed some of this optimism. It liked
“Last month, mortgage rates rose and economic uncertainty increased, and our estimate of new home sales reached the highest level in four months,” Joel Kan, MBA deputy chief economist, said in an April 14 press release.
“This growth was supported by higher levels of unsold inventory in many markets across the country, some of which were move-in ready and relatively more attractive to homebuyers eager to purchase a home.”
On the other hand, the National Association of Home Builders/Wells Fargo sentiment index fell to
Here’s a look at the earnings of some publicly traded homebuilders whose reporting ended March 31:
DR Horton warns of increased sales incentives
Second fiscal quarter net income attributable to DR Horton decreased 20% from $810.4 million to $647.9 million
“Affordability constraints and cautious consumer confidence continue to impact demand for new housing,” said David Auld, executive chairman, in a news release.
Still, the company reported an 11% increase in net sales orders year-over-year while reducing the inventory of unsold completed homes by 35% from a year ago, Auld continued.
Revenue from its homebuilding business for the second fiscal quarter fell 2% to $7.1 billion. The number of closed homes increased by 1% to 19,486 homes compared to the previous year, while the cancellation rate of 16% was in line with the same period in 2025.
Horton’s financial services added revenue of $192.8 million with pre-tax income of $51.7 million, resulting in a pre-tax profit margin of 26.8%.
“We expect our sales incentives to remain high in fiscal 2026, with incentive levels dependent on demand, mortgage rates and other market conditions,” Auld said. “Based on our performance to date, we remain on track to deliver results within our original expectations for fiscal year 2026.”
NVR’s pre-tax mortgage income drops 17%
While new orders at NVR rose 7% from a year ago, net profits at the homebuilder and mortgage banker fell 34% in the first quarter.
The company reported net income of $198.4 million for the period ended March 31, up from $299.6 million a year earlier.
Residential construction revenues of $1.83 billion represented a 22% decline from $2.35 billion in the first quarter of 2025. But the average sales price for a new order was only 2% lower, at $440,100.
The cancellation rate in the first quarter is 14%, compared to 16% a year ago.
The mortgage banking company reported pre-tax income of $27.1 million, down 17% from the first quarter of 2025, when it earned $32.5 million. NVR’s mortgage volume fell 27% year-over-year from $1.43 billion to $1.05 billion. The catch rate dropped from 86% to 83%.
Taylor Morrison reduces dependence on incentives
Taylor Morrison Home reported a significant decline in net income for the first quarter, by more than 50%, to $98.63 million, compared to $213.47 million for the same period in 2025.
Home closing revenue fell about 28% to $1.3 billion. This was driven by a 26% decline in closing volume to 2,268 homes and a 4% decline in the average closing price to $578,000.
“Encouragingly, our first quarter revenue was delivered with a significant increase in build order mix to 38% compared to 28% in the fourth quarter, a sequential incentive reduction of more than 100 basis points and a 30% decline in spec completions to 863 homes,” said Sheryl Palmer, chairman and CEO of Taylor Morrison, in a press release. “As net orders exceeded the number of closures, our order book grew sequentially by 23% to 3,465 homes.”
The net income from financial services, which
The acquisition rate of the mortgage activities was 88%, stable compared to a year ago.
Earnings down to M/I, but still a “very solid” quarter
M/I Homes’ net income of $67.8 million for the first quarter was down from $111.2 million a year earlier, even as company CEO and President Robert Schottenstein called those numbers “very solid.”
New business rose 3% year over year, he noted.
“We continue to believe that long-term housing demand is supported by favorable demographic trends and an undersupply of housing,” Schottenstein said. “We are in a strong financial position with record equity of $3.2 billion, cash on hand of $767 million and no borrowings under our $900 million credit facility.”
Financial services revenues at M/I were $31.23 million, relatively flat from last year’s $31.52 million.