Weekly Real Estate News
M/I Homes reported a 38% decline in third-quarter net income as the homebuilder faced softer demand and lower margins, adding to evidence that elevated financing costs continue to weigh on the new-home market.
The Columbus, Ohio-based company reported net income of $66.6 million, or $2.56 per diluted share, for the quarter ended September 30, compared with $106.5 million, or $3.92 per share, a year earlier. Its October 21 earnings release put revenue at approximately $1.1 billion, a 5% decline.
Orders and closings move lower
New contracts fell 2% to 1,861, compared with 1,908 a year earlier. Home deliveries declined 2% to 2,241 from 2,296. The company’s backlog at quarter-end totaled 2,046 homes valued at approximately $1.1 billion, down 7% in units and 9% in dollar value from the prior-year period.
Those numbers point to a broader slowdown than the earnings decline alone: the builder entered the fourth quarter with fewer homes under contract, while the average backlog sales price fell to $539,000 from $553,000.
Margins and inventory charges
M/I Homes reported a homebuilding gross margin of 20.9%, or 21.3% excluding inventory charges. Pretax income fell to $86.9 million from $139.8 million. The quarter included $4.7 million in pretax inventory charges, equivalent to approximately 14 cents per diluted share.
The company ended September with 246 communities, up from 233 a year earlier, and reported a 12% cancellation rate, unchanged from the prior-year quarter. Its homebuilding debt-to-capital ratio was 18%, while shareholders’ equity reached $3.3 billion.
Industry implications
The results add to signs of uneven demand across publicly traded builders. PulteGroup also reported weaker third-quarter closings and orders, although the builders operate in different geographic markets and have different price mixes. Direct comparisons of margins or sales trends require those differences to be considered.
For lenders, brokers and real estate professionals, declining builder contracts and backlog suggest the market remains sensitive to mortgage rates, incentives and affordability constraints. The release does not establish how much of M/I Homes’ earnings decline was caused by any single factor.
Primary sources: M/I Homes third-quarter 2026 earnings release filed with the SEC; October 21 Form 8-K.
