NVR earnings show homebuilding is up but uncertainty lies ahead

An influx of new home orders helped keep NVR’s revenue up in the first quarter after dropping off from 2020’s final frame.

The homebuilder, mortgage banking and title company saw a net income of $248.8 million, resulting in $63.21 per diluted share. Those figures fell quarterly from $305 million and $76.93 while jumping annually from $175.7 million and $44.96. Although the 42% year-over-year growth is strong, 1Q 2020 faced adverse lending conditions relative to the rest of last year.

The mortgage banking component totaled $1.41 billion in closed loan production, with a pre-tax income of $58.6 million. Those also declined from the fourth quarter’s $1.66 billion and $61.8 million but rose annually from $1.13 billion and $11.5 million.

With the call for more housing intensifying amid the extreme inventory shortage, NVR filled orders for 6,314 new units in the first quarter, up from 5,485 units in the fourth quarter of 2020 and 5,015 units annually. The company generated $1.96 billion in homebuilding revenue, a drop from $2.26 billion in the fourth quarter but increasing from $1.56 billion year-over-year. Escalating material prices and regulatory unknowns, however, cloud the view ahead.

“Although current demand for new homes is strong, there remains uncertainty regarding the extent and timing of disruption to our business that may result from COVID-19 and related governmental actions,” the company said in its earnings report. “We are unable to predict the extent to which this will impact our operational and financial performance including the impact of such on our employees, customers and trade partners.”

Total assets for the Reston, Va.-based NVR grew to $5.82 billion in the first quarter from $5.78 billion at the close of 2020.