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NVR Q3 Earnings Miss Estimates on Lower Settlements & Margin Pressure
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Key Takeaways
NVR's Q3 earnings fell 20.4% year over year to $89.45 per share, missing estimates by 15.7%.
Homebuilding gross margin fell 270 basis points to 18.3% amid higher lot costs and pricing pressure.
Backlog units rose 10% to 10,121, while Mortgage Banking income before taxes increased 7% to $35 million.
NVR, Inc. (NVR - Free Report) reported third-quarter 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Both metrics also declined on a year-over-year basis.
The quarter reflected fewer settlements, softer pricing and margin pressure amid affordability challenges and weak consumer sentiment. New orders declined and cancellations increased, but backlog units rose 10% year over year.
Following the results, NVR stock jumped 3.6% during yesterday’s trading hours, potentially supported by backlog growth, improved Mortgage Banking profitability and continued share repurchases despite weaker earnings.
Inside NVR’s Q3 Headlines
The company reported earnings of $89.45 per share, down 20.4% year over year and missing the Zacks Consensus Estimate of $106.11 by 15.7%.
Homebuilding revenues of $2.35 billion also missed the consensus mark of $2.60 billion by 9.8%. Revenues declined 8.2% year over year from $2.56 billion, reflecting lower settlement volumes and a decrease in the average settlement price.
Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.40 billion, down 7.9% on a year-over-year basis.
NVR Faces Lower Settlements and Pricing Pressure
Settlements fell 7% to 5,268 units from 5,639 units, limiting revenue generation during the quarter. The Mid Atlantic region recorded 1,786 settlements compared with 2,008 a year ago, while Mid East settlements declined to 1,090 from 1,200.
South East settlements decreased to 1,915 units from 2,011, while North East settlements increased to 477 units from 420. The average settlement price declined 2% year over year to $445,900, adding to the pressure from fewer closings.
NVR Sees Homebuilding Margin Compression
Homebuilding gross margin contracted to 18.3% from 21% a year ago, reflecting a 270-basis-point decline. Profitability was pressured by higher lot costs, continued affordability challenges and weak consumer sentiment, which contributed to increased pricing pressure. Our estimate for the metric was 19.9%.
The quarter also included approximately $24.8 million of contract land deposit impairments. Consequently, Homebuilding income before taxes declined 27% year over year to $299.7 million from $411.4 million.
NVR's Mortgage Banking Profitability Improves
Mortgage banking fees increased to $53.1 million from $49.2 million in the prior-year quarter. However, mortgage closed loan production declined 10% year over year to $1.38 billion from $1.54 billion, reflecting lower financing activity.
Despite weaker loan production, Mortgage Banking income before taxes increased 7% to $35 million from $32.7 million. The capture rate, representing the percentage of NVR homebuyers using the company's mortgage services, decreased to 85% from 86%.
NVR Faces Slower New Order Activity
New orders, net of cancellations, declined 7% year over year to 4,391 units from 4,735. Mid Atlantic orders decreased to 1,641 units from 1,714, while North East orders fell to 232 from 433.
Mid East orders declined to 891 units from 931, while South East orders decreased to 1,627 from 1,657. The average sales price of new orders fell 5% to $442,100 from $464,800.
The cancellation rate increased to 21% from 19.4%, indicating that a greater proportion of signed contracts failed to convert into firm orders during the quarter.
NVR's Backlog Expands Despite Softer Pricing
Backlog totaled 10,121 units as of Sept. 30, 2026, up 10% from 9,165 units a year earlier. The dollar value of backlog increased 4% to $4.59 billion, reflecting a larger volume of homes awaiting settlement.
However, the average backlog price declined to $453,000 from $479,500. Average active communities increased to 454 from 450, slightly expanding the company's selling footprint despite softer order activity.
NVR Maintains Liquidity and Continues Buybacks
Homebuilding cash and cash equivalents were $1.09 billion as of Sept. 30, 2026, compared with $1.88 billion at the end of 2025. Homebuilding inventory increased to $2.37 billion from $1.72 billion during the same period. Mortgage Banking cash and cash equivalents were $34.1 million compared with $32.6 million at year-end.
NVR repurchased 37,088 shares during the quarter for an aggregate cost of $237.2 million. Shares outstanding declined to 2.64 million from 2.86 million a year earlier, helping offset part of the impact of lower net income on per-share earnings.
PulteGroup, Inc. (PHM - Free Report) reported third-quarter 2026 earnings of $2.53 per share, missing the Zacks Consensus Estimate of $2.63 by 3.8%. Earnings declined 14.5% from $2.96 per share in the year-ago quarter.
PulteGroup’s total revenues of $3.97 billion fell short of the consensus mark of $4.13 billion by 3.9% and decreased 9.8% year over year. Results reflected lower home-closing volumes, softer average selling prices and margin pressure amid affordability challenges, rising mortgage rates and inflation. Net new orders declined year over year, while backlog increased in both units and dollar value.
Lennar Corporation (LEN - Free Report) reported weaker-than-expected third-quarter fiscal 2026 (ended Aug. 31) results. Adjusted earnings of $1.23 per share missed the Zacks Consensus Estimate of $1.29 by 4.7% and fell 38.5% from $2.00 a year ago.
Lennar’s total revenues of $8.05 billion missed the consensus estimate of $8.33 billion by 3.4% and declined 8.6% year over year. Lower deliveries and home prices weighed on results amid affordability pressure. Inventory turn stood at 2.4 times.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2026 results, with adjusted earnings per share and total revenues beating the Zacks Consensus Estimate and increasing year over year. URI’s adjusted earnings of $15.55 per share topped the Zacks Consensus Estimate of $13.83 by 12.4% and grew 32.9% year over year from $11.70. United Rentals’ total revenues rose 15.7% year over year to $4.89 billion and surpassed the consensus estimate of $4.69 billion by 4.3%.
Management raised its revenue outlook to $18-$18.2 billion from $17.5-$17.8 billion. Adjusted EBITDA is now projected at $8.3-$8.4 billion compared with $7.98-$8.13 billion previously.
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NVR Q3 Earnings Miss Estimates on Lower Settlements & Margin Pressure
Key Takeaways
NVR, Inc. (NVR - Free Report) reported third-quarter 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Both metrics also declined on a year-over-year basis.
The quarter reflected fewer settlements, softer pricing and margin pressure amid affordability challenges and weak consumer sentiment. New orders declined and cancellations increased, but backlog units rose 10% year over year.
Following the results, NVR stock jumped 3.6% during yesterday’s trading hours, potentially supported by backlog growth, improved Mortgage Banking profitability and continued share repurchases despite weaker earnings.
Inside NVR’s Q3 Headlines
The company reported earnings of $89.45 per share, down 20.4% year over year and missing the Zacks Consensus Estimate of $106.11 by 15.7%.
Homebuilding revenues of $2.35 billion also missed the consensus mark of $2.60 billion by 9.8%. Revenues declined 8.2% year over year from $2.56 billion, reflecting lower settlement volumes and a decrease in the average settlement price.
NVR, Inc. Price, Consensus and EPS Surprise
NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. Quote
Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.40 billion, down 7.9% on a year-over-year basis.
NVR Faces Lower Settlements and Pricing Pressure
Settlements fell 7% to 5,268 units from 5,639 units, limiting revenue generation during the quarter. The Mid Atlantic region recorded 1,786 settlements compared with 2,008 a year ago, while Mid East settlements declined to 1,090 from 1,200.
South East settlements decreased to 1,915 units from 2,011, while North East settlements increased to 477 units from 420. The average settlement price declined 2% year over year to $445,900, adding to the pressure from fewer closings.
NVR Sees Homebuilding Margin Compression
Homebuilding gross margin contracted to 18.3% from 21% a year ago, reflecting a 270-basis-point decline. Profitability was pressured by higher lot costs, continued affordability challenges and weak consumer sentiment, which contributed to increased pricing pressure. Our estimate for the metric was 19.9%.
The quarter also included approximately $24.8 million of contract land deposit impairments. Consequently, Homebuilding income before taxes declined 27% year over year to $299.7 million from $411.4 million.
NVR's Mortgage Banking Profitability Improves
Mortgage banking fees increased to $53.1 million from $49.2 million in the prior-year quarter. However, mortgage closed loan production declined 10% year over year to $1.38 billion from $1.54 billion, reflecting lower financing activity.
Despite weaker loan production, Mortgage Banking income before taxes increased 7% to $35 million from $32.7 million. The capture rate, representing the percentage of NVR homebuyers using the company's mortgage services, decreased to 85% from 86%.
NVR Faces Slower New Order Activity
New orders, net of cancellations, declined 7% year over year to 4,391 units from 4,735. Mid Atlantic orders decreased to 1,641 units from 1,714, while North East orders fell to 232 from 433.
Mid East orders declined to 891 units from 931, while South East orders decreased to 1,627 from 1,657. The average sales price of new orders fell 5% to $442,100 from $464,800.
The cancellation rate increased to 21% from 19.4%, indicating that a greater proportion of signed contracts failed to convert into firm orders during the quarter.
NVR's Backlog Expands Despite Softer Pricing
Backlog totaled 10,121 units as of Sept. 30, 2026, up 10% from 9,165 units a year earlier. The dollar value of backlog increased 4% to $4.59 billion, reflecting a larger volume of homes awaiting settlement.
However, the average backlog price declined to $453,000 from $479,500. Average active communities increased to 454 from 450, slightly expanding the company's selling footprint despite softer order activity.
NVR Maintains Liquidity and Continues Buybacks
Homebuilding cash and cash equivalents were $1.09 billion as of Sept. 30, 2026, compared with $1.88 billion at the end of 2025. Homebuilding inventory increased to $2.37 billion from $1.72 billion during the same period. Mortgage Banking cash and cash equivalents were $34.1 million compared with $32.6 million at year-end.
NVR repurchased 37,088 shares during the quarter for an aggregate cost of $237.2 million. Shares outstanding declined to 2.64 million from 2.86 million a year earlier, helping offset part of the impact of lower net income on per-share earnings.
NVR’s Zacks Rank & A Few Construction Releases
NVR currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup, Inc. (PHM - Free Report) reported third-quarter 2026 earnings of $2.53 per share, missing the Zacks Consensus Estimate of $2.63 by 3.8%. Earnings declined 14.5% from $2.96 per share in the year-ago quarter.
PulteGroup’s total revenues of $3.97 billion fell short of the consensus mark of $4.13 billion by 3.9% and decreased 9.8% year over year. Results reflected lower home-closing volumes, softer average selling prices and margin pressure amid affordability challenges, rising mortgage rates and inflation. Net new orders declined year over year, while backlog increased in both units and dollar value.
Lennar Corporation (LEN - Free Report) reported weaker-than-expected third-quarter fiscal 2026 (ended Aug. 31) results. Adjusted earnings of $1.23 per share missed the Zacks Consensus Estimate of $1.29 by 4.7% and fell 38.5% from $2.00 a year ago.
Lennar’s total revenues of $8.05 billion missed the consensus estimate of $8.33 billion by 3.4% and declined 8.6% year over year. Lower deliveries and home prices weighed on results amid affordability pressure. Inventory turn stood at 2.4 times.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2026 results, with adjusted earnings per share and total revenues beating the Zacks Consensus Estimate and increasing year over year. URI’s adjusted earnings of $15.55 per share topped the Zacks Consensus Estimate of $13.83 by 12.4% and grew 32.9% year over year from $11.70. United Rentals’ total revenues rose 15.7% year over year to $4.89 billion and surpassed the consensus estimate of $4.69 billion by 4.3%.
Management raised its revenue outlook to $18-$18.2 billion from $17.5-$17.8 billion. Adjusted EBITDA is now projected at $8.3-$8.4 billion compared with $7.98-$8.13 billion previously.