NVR's net income falls 27% year over year to $248.6 million as homebuilding margin narrows to 18.3%

NVR, Inc. said third-quarter net income fell 27% from a year earlier to $248.6 million, or $89.45 per diluted share, as the homebuilder's gross margin narrowed and it settled fewer homes at lower prices. Revenue was $2.40 billion, compared with $2.61 billion a year earlier, and diluted earnings per share fell 20%.

Margins narrow as lot costs and deposit impairments land

Homebuilding revenue was $2.35 billion, down 8% from $2.56 billion in the third quarter of 2025, and the segment's gross profit margin fell to 18.3% from 21.0%. NVR named three causes: higher lot costs, pricing pressure it linked to continued affordability challenges and weak consumer sentiment, and contract land deposit impairments of approximately $24.8 million. The impairment charge is disclosed as a dollar amount rather than a margin-point effect, and NVR did not say how much of the decline it caused. Homebuilding income before tax fell 27% from a year earlier to $299.7 million. Selling, general and administrative expense was lower than a year earlier, so the profit drop came from the revenue line and the gross margin rather than from overhead.

Fewer orders, more cancellations, and a thinner average price

New orders fell 7% from a year earlier to 4,391 units and the average sales price of those orders dropped 5% to $442,100. Settlements, the homes actually handed over and booked as revenue, fell 7% from a year earlier to 5,268 units at an average price of $445,900, down 2%. The cancellation rate rose to 21% from 19%. Orders are reported net of cancellations, so the 7% decline already absorbs the higher cancellation rate. Backlog, the homes sold but not yet settled, nonetheless rose 10% from a year earlier to 10,121 units and 4% in dollar terms to $4.59 billion, which is why the quarter reads as a margin and pricing problem more than an empty-pipeline problem.

Mortgage banking and buybacks cushion the per-share decline

Mortgage banking income before tax rose 7% to $35.0 million from $32.7 million even as closed loan production fell 10% to $1.38 billion. The segment's capture rate slipped to 85% from 86%, meaning it financed a slightly smaller share of the homes NVR sold. On the equity side, net income fell 27% while diluted earnings per share fell 20%: diluted weighted average shares were 2.78 million against 3.05 million a year earlier. NVR repurchased 37,088 shares for $237.22 million during the quarter and had 2,644,276 shares outstanding at September 30. Cash and cash equivalents were $1.09 billion at September 30, down from $1.88 billion at December 31, 2025, a period in which inventory rose and the company bought back stock.

No guidance, with the Form 10-Q as the next dated document

The exhibit is a full set of unaudited third-quarter statements and operating data, and it contains no outlook for the fourth quarter, no reference to an earnings call, and no estimate of how much of the margin damage came from the deposit impairments rather than pricing. Nine-month figures frame the trend: revenue of $6.61 billion, down 13%, and net income of $683.4 million, down 30% from $976.0 million. The next company-issued numbers will be in the Form 10-Q for the period, which will carry inventory and deposit detail the release only summarizes, and then the fourth-quarter release, which NVR has not dated. The single quantity in the release that points forward is the $4.59 billion backlog; at a 21% cancellation rate, how quickly it converts into settlements decides whether margin pressure persists into 2027.