Weekly Real Estate News
Summary
Forestar fiscal Q4 2026 revenue fell 13% to $580.8 million and net income fell 32% to $59.2 million. It sold 5,004 lots in the quarter and 13,545 for the fiscal year. Management projects 12,000–13,000 lot deliveries in fiscal 2027, reflecting weaker homebuilder demand.
Residential lot developer Forestar sold 5,004 lots in its fiscal fourth quarter, but revenue and profit declined as homebuilders responded to slower buyer demand and elevated mortgage rates.
Forestar reported $580.8 million in revenue for the quarter ended September 30, down 13% from $670.5 million a year earlier. Net income attributable to the company fell 32% to $59.2 million from $87 million. The figures, released October 29, provide a view of the market one step before a finished home reaches a buyer: the supply of developed lots purchased by builders.
The company’s fiscal fourth-quarter earnings announcement reported pretax income of $78.6 million, down 31% from $113.1 million a year earlier. The quarter included a $10 million pretax gain from asset sales and $7.6 million in real estate impairment charges. Those items matter when assessing the underlying margin trend.
Forestar sold 13,545 lots during fiscal 2026, generating $1.6 billion in annual revenue. Its full-year net income was $142.6 million, down 15% from $167.9 million in fiscal 2025. The company ended September with 84,400 lots owned or controlled and 21,500 contracted for sale.
That inventory is a substantial land pipeline, though the distinction between owned and controlled lots matters. Controlled lots may be subject to options or other arrangements rather than full ownership. Lots contracted for sale are also not equivalent to completed deliveries or recognized revenue.
Management sees fewer lot deliveries next year
Forestar expects to deliver 12,000 to 13,000 lots in fiscal 2027, below the 13,545 delivered in fiscal 2026. It forecast revenue of $1.4 billion to $1.5 billion, compared with approximately $1.6 billion in the year just ended. Those are management projections, not completed transactions.
Chairman Donald Tomnitz said homebuyers remain constrained by affordability and cautious sentiment, with higher mortgage rates adding pressure in the fourth quarter. Forestar said it was adjusting its investment pace and emphasizing balance-sheet flexibility.
Its net debt-to-total-capital ratio was 6.7% at fiscal year-end, and total liquidity was $1.3 billion. Book value per share increased 8% from the previous year to $37.56, the company reported. The balance-sheet position gives Forestar flexibility to decide when to develop additional lots, but it does not guarantee builders will absorb them at prior-year prices.
The report complements D.R. Horton’s fiscal fourth-quarter results, which showed weaker orders and higher cancellations. Both companies face demand shaped by mortgage payments, incentives and the cost of acquiring and developing land.
Lot developers can experience changes in demand before they appear in new-home closings. Builders may postpone lot takedowns or negotiate new terms when unsold inventory increases. Conversely, a tightening supply of finished lots can become a constraint when demand returns. Forestar’s 2027 guidance suggests management is planning for a measured pace rather than an immediate rebound.
Forestar’s figures were company-reported and include nonrecurring gains and impairments. Future delivery volumes will depend on builder purchases, construction schedules and local market conditions.
