U.S. homebuilder NVR posted third-quarter net income of $248.6 million, down 27% from a year earlier, as higher lot costs, affordability-related pricing pressure, weak consumer sentiment and contract land deposit impairments weighed on the homebuilding gross profit margin. Diluted earnings per share fell 20% to $89.45, while consolidated revenue declined to $2.40 billion from $2.61 billion, the company said.
Net new orders fell 7% to 4,391 homes. The average price of new orders was $442,100, and the cancellation rate rose to 21% from 19%. Settlements declined 7% to 5,268 homes at an average price of $445,900.
Backlog increased 10% to 10,121 homes at September 30, while its value rose 4% to $4.59 billion. The average backlog price was $453,000. NVR had 454 active communities during the quarter and 443 on average for the first nine months. It controlled 185,300 lots at the end of the period.
Homebuilding revenue fell 8% to $2.35 billion, and gross profit margin narrowed to 18.3% from 21.0%. The margin was affected by higher lot costs, pricing pressure related to affordability challenges and weak consumer sentiment, and approximately $24.8 million in contract land deposit impairments. Homebuilding income before tax was $299.7 million.
Mortgage closed-loan production declined 10% to $1.38 billion, while mortgage banking income before tax increased 7% to $35.0 million from $32.7 million. Loan closings totaled $1.38 billion for the quarter, with an 85% capture rate.
For the first nine months, consolidated revenue fell 13% to $6.61 billion and net income declined 30% to $683.4 million. Diluted earnings per share fell 24% to $240.54. New orders totaled 16,014 homes at an average price of $439,600, while settlements totaled 14,341 homes at an average price of $450,700. Mortgage loan closings reached $3.79 billion, also at an 85% capture rate.