PulteGroup, NVR, M/I, Taylor Morrison report lower profits

Homebuilder profits slip year-over-year in difficult 2Q25

July 23, 2025 1:17 PM

The second quarter was a mixed bag for a quartet of publicly traded homebuilders, reflecting the meh 2025 spring home purchase season.

All four were profitable, but net income was lower compared with one year prior. The market wasn't helped by a near 14% drop in the sale of newly constructed properties (on an annualized basis) in May.

But a more recently released measurement, the Mortgage Bankers Association's Builder Application Survey, found demand for loans for newly constructed residences increased 8.5% for June versus one year prior.

"A cloudier economic outlook and elevated mortgage rates continues to weigh on potential buyers, while growing inventory, builder incentives, and lower prices have brought some buyers back to the market," Joel Kan, the MBA's deputy chief economist, said at the time. "As a result, we continue to see home sales ebb and flow."

These four companies are matching what happened at D.R. Horton, which reported net income of $1 billion for its third fiscal quarter ended June 30. This was down from $1.4 billion one year prior.

"Our net sales orders in the third quarter were flat with the prior year quarter and increased 3% sequentially," David Auld, executive chairman, said in the press release. "We closed more homes than the high end of our guidance range, while maintaining a home sales gross margin of 21.8%."

Here are earnings from four other builders for the period ended June 30:

PulteGroup management notes encouraging signs

PulteGroup reported net income of $608 million for the second quarter, down from $809 million one year prior. The year ago period did include a $52 million pre-tax insurance benefit and a $13 million tax benefit related to a favorable resolution of a state matter.

"Over the course of the 2025 spring selling season, we saw consumers dealing with a range of issues from high interest rates and challenged affordability to macro concerns about the strength of the economy," Ryan Marshall, president and CEO, said in a press release.
"We are encouraged, however, by the positive consumer response we saw to the pullbacks in interest rates in late June and at times earlier in the year."

Sales revenue fell 4% year-over-year to $4.3 billion, as closings fell by 6% to 7,639 units. But a 2% increase in the average sales price to $559,000 offset some of that reduction.

PulteGroup's financial services business had pre-tax income of $43 million, down from $63 million one year prior. The company's in-house mortgage capture rate was 85%, compared with 86% for the second quarter of 2024, it claimed.

"Given the market dynamics we experienced in the first half of the year, we have aligned our home production and land investment to effectively serve today's current core demand, while positioning us to retain and grow our market share as demand strengthens in the future," Marshall said.

NVR reports reduction in new orders

NVR earned $333.7 million in the second quarter, down from $400.9 million one year prior. This is likely a result of new orders falling by 11% year-over-year to 5,379 units, and a relatively flat average sales price of $458,100.

Furthermore, the cancellation increased by 4 percentage points to 17% in the most recent period from13% a year ago.

Gross profit margin fell 21.5% and was negatively affected by higher lot costs, pricing pressure due to continued affordability challenges and contract land deposit impairments totaling approximately $13.2 million.

NVR's mortgage loan production was up 2% over the prior year, to $1.56 billion of volume. The segment's pre-tax income was $29.6 million, down 34% from $45 million for the second quarter of 2024, because of a decrease in gain on sale between the comparable periods.

M/I best ever second quarter for deliveries

Net income at M/I Homes for the second quarter was $121.2 million, an approximately 18% drop from the $146.7 million reported for the same period in 2024.

This occurred even as the company had its best second quarter ever for deliveries, up 6% from the prior year to 2,348 units. Bur for the first half of the year, deliveries were down by 1%.

M/I's results were solid despite the "continued challenging market conditions," said CEO and President Robert Shottenstein, in a press release.

"Although market conditions remain choppy and challenging, we are confident in the underlying fundamentals of the housing industry and our ability to navigate through this uncertain environment," Shottenstein continued. "Our balance sheet remains very strong, with zero borrowings under our $650 million unsecured credit facility, a cash position of $800 million, homebuilding debt-to-capital of 18%, and a net debt-to-capital ratio of negative 3%."

Financial services revenue was $31.5 million in the second quarter, up from $30.8 million one year prior.

Taylor Morrison advises investors to have patience

For Taylor Morrison, net income fell to $193.6 million from $199.5 million in the second quarter of 2024.

Homes closing revenue was up 2% year-over-year to $2 billion as a 4% increase in units closed, 3,340, was offset by a 2% reduction in average price of $589,000.

The company met or exceeded its prior guidance, "despite the unique environment," said Sheryl Palmer, CEO and chairman, in a press release.

"In the current sales environment where competitive pressures, especially for spec homes, have intensified, our overall bias between pace and price leans more heavily towards price, and ultimately margin and returns, given the value of our attractive land positions, desirable communities and discerning customers," Palmer explained.

"We continue to believe that our strong emphasis on working with each customer — hand in hand with our Taylor Morrison Home Funding team — to personalize incentives is the most effective way to create value for both our buyers and our company."

The near-term outlook is for "a more patient growth trajectory," Palmer said, promoting capital efficiency and returns over volume.

Taylor Morrison said its in-house mortgage capture rate was 87%, down from 89% a year ago. Its second quarter 2025 borrowers had an average credit score of 751 and average debt-to-income ratio of 40%.

Financial services net revenue totaled $52.9 million, up from $48.8 million for the prior year. Expenses in this business line fell to $25.9 million from $28.1 million.