M/I Homes released third-quarter financial results showing a downturn in performance, with rising mortgage rates, raised fuel prices, and economic instability reducing demand for new residences. The company’s new contract signings, home deliveries, and overall revenue all decreased compared to the same period the previous year, aligning with wider struggles within the housing sector.
Company CEO Robert Schottenstein linked the slowdown to persistent inflation fears and geopolitical instability during the earnings call. He noted that the current choppy and challenging conditions may continue for some time. He added that the builder’s extensive experience, 50 years in the market, equips it to handle the downturn through careful planning and execution.
To draw in buyers, M/I Homes continues offering rate buydowns to help offset higher borrowing costs. However, as mortgage rates climbed during the quarter, these incentives became more costly, compressing profit margins. The company’s gross margin contracted to 20.9%, down from 23.9% in the same three-month stretch last year. Schottenstein highlighted that product quality and prime locations remain key selling points in a crowded market where many competitors rely on similar financial incentives.
In the third quarter, 1,861 new contracts were secured, marking a 2% decline from the prior year. Through September, the company sold 6,598 homes year-to-date, a 5% increase over 2025. Regionally, the North saw a modest 1% rise in new contracts, while the South experienced a 4% drop. The Smart Series line, targeted at first-time buyers, represented roughly half of all sales during the period.
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Deliveries totaled 2,241 homes, with northern markets remaining stable while southern deliveries fell by 5%. The company operated 246 communities at quarter’s end, with a 12% cancellation rate. Strong performance was recorded in cities including Chicago, Columbus, Minneapolis, Dallas, and Charlotte.
Total revenue for the quarter decreased by 5% to $1.08 billion, and net income fell to $67 million, or $2.56 per share, compared with $107 million ($3.92 per share) in the same period last year. The results demonstrate that even well-established builders face significant strain when housing affordability declines.
Schottenstein acknowledged the ongoing difficulties but reaffirmed confidence in the industry’s long-term prospects. He concluded that though these are more challenging times, the company remains quite confident in the long-term fundamentals of the home building industry, pointing to the company’s land reserves, strategic geographic footprint, and financial stability as enduring advantages. For the immediate term, the priority is sustaining operational control while weathering the current market phase.
