What Public Builders Are Saying About the Spring Selling Season and Tariffs

Earnings reports from NVR, Meritage Homes, Taylor Morrison, Century Communities, M/I Homes, and Tri Pointe Homes shed light on the impact of subdued consumer confidence on demand and the potential impacts of tariffs on costs.

Choppy conditions and a slower than typical start to the spring selling season impacted public builder earnings during the first quarter of 2025.

After PulteGroup reported earnings on April 22, six additional builders—NVR, Meritage Homes, Taylor Morrison, Century Communities, M/I Homes, and Tri Pointe Homes—reported financial results during the week of April 21. Each builder echoed similar sentiments related to consumer confidence, economic uncertainty, and slower-than-typical traffic during the first three months of 2025.

After D.R. Horton kicked off the latest earning period with soft year-over-year performance in orders and closings, the majority of reporting builders noted similar patterns in the fiscal first quarter. While Taylor Morrison reported year-over-year growth in closings revenue and closings in the period, chairman and CEO Sheryl Palmer noted that 2025 will “represent a speed bump” on the company’s path toward its 2028 goal of 20,000 annual closings.

At Century Communities, the slower-than-expected spring selling season contributed to the builder rightsizing its workforce and implementing other cost-savings programs in mid-April to lower its fixed costs.

First Quarter By the Numbers

• NVR: Net new orders decreased 12% year-over-year (YOY) to 5,345 units; closings increased 1% to 5,133 and closing revenue increased 3% to $2.35 billion. Cancellation rate was 16%, up from 13% in the same period a year ago.
• Meritage Homes: Net orders decreased 3% in the first quarter to 3,876, driven by a 10% decrease in average absorption pace, partially offset by a 7% in average community count. Home closing revenue and closing volume fell 8% and 3% to $1.3 billion and 3,416 homes, respectively.
• Taylor Morrison: Net sales orders fell 8% to 3,374 in the first quarter while the cancellation rate increased to 11.0% from 7.0%. Closing revenue and closing volume both increased 12% to $1.8 billion and 3,048 homes, respectively.
• Century Communities: Net new home contracts decreased 6.1% to 2,692 in the first quarter; Closings declined 3.1% to 2,284 homes with a closing revenue of $903.2 million.
• M/I Homes: New contracts decreased to 2,292 from 2,547 a year ago with a cancellation rate of 10%. Closings revenue and closing volume decreased 7% and 8% to $976 million and 1,976 homes, respectively.
• Tri Pointe Homes: Net new orders declined to 1,238 in the first quarter of 2025 from 1,814 a year ago. Closing revenue and closing volume declined to $720.8 million and 1,040 homes from $918.4 million and 1,393 homes a year ago, respectively.

What They’re Saying: On Market Conditions

“We acknowledge that the current macroeconomic conditions have increased uncertainty, resulting in some softening of the housing market as buyers’ psychology and the cost of homeownership are being challenged. Our strategic focus on 60-day closing ready commitment and move-in inventory is creating a differentiator for us by providing certainty to our customers in a highly unpredictable market.” — Steve Hilton, executive chairman, Meritage Homes

“There are more macro-related uncertainties facing the business than I can recall at almost any point in my career outside of the early days of the COVID pandemic. Consumer confidence is the most critical factor in the long term, as it will be key in determining our sales and pricing holds up for the remainder of the spring selling season. I expect we will continue to see many home shoppers taking a wait and see approach to their purchasing decisions until there is greater clarity on the economic outlook.” — Sheryl Palmer, chairman and CEO, Taylor Morrison

“There’s been a change that we’ve seen in the consumer profile, at least at the volatility post-March into early-April. That volatility that has been in the market has caused the consumer to pause. And so we are anticipating some additional incentives that we’ve recently put in place in order to achieve the absorptions that we’re booking for into the second quarter.” — John Dixon, chief financial officer, Century Communities

“As we began 2025, it was clear to us that rate buydowns remain necessary for us to drive traffic and promote sales and that such rate buydowns would continue throughout the spring selling season unless and until it became clear that consistent and solid demand had returned. Clearly, that has not happened. Instead, what we have seen is the continuation of choppy and challenging conditions.” — Robert Schottenstein, CEO and president, M/I Homes

“The spring selling season is off to a slower start than we normally experience with net new home orders of 1,238 for the quarter on a monthly absorption rate of 2.8 per average selling community. While the longer-term outlook for housing remains favorable with a continuing shortage of homes and strong demographics. It’s clear that elevated uncertainty about the economy is weighing on consumer’s sentiment.” — Doug Bauer, CEO, Tri Pointe Homes  

What They’re Saying: On Tariffs

“Given the cadence of tariff announcements and the evolving start and stop nature of these discussions ever since, we don’t yet know to what degree, if any, tariff-related cost increases will impact our gross margin in the second half of 2025. However, the current status quo of no tariffs on lumber should get us most of our expected 2025 closings completed at current market lumber prices. Given our increased scale and ongoing efforts to streamline our operations, we are confident in our ability to work with our partners to minimize supply chain challenges.” — Hilla Sferruzza, executive vice president and chief financial officer, Meritage Homes

“As we’re looking at [tariffs] and their impact on the year, we’ve guided to some low single digit cost inflation for the year. We’re starting to see some increases mainly from the metals and aluminum tariff and the 10% blanket tariff. But for the most part, it’s all impacting the metal side or the aluminum side, which is HVAC and fireplace boxes, post tension cables.” — Curt VanHyfte, chief financial officer, Taylor Morrison

“While the [tariff] situation is obviously fluid at this time, we are not expecting to see any meaningful increase in our direct costs in the near term. The majority of products that we purchase are either made in the U.S. or are currently exempt from tariffs under the USMCA agreement. We also have price protection agreements with our preferred supplier partners for many of the non-commodity products that we purchase and believe that with our relationships, we will be able to work with our suppliers to mitigate the impact of any potential increased costs that could occur throughout their supply chains.” — Dale Francescon, executive chairman, Century Communities

“Despite all the noise on tariffs, we haven’t seen any impact yet. Will there be an impact? Probably. But right now, I don’t think that our industry has yet felt it other than it’s probably having some effect on consumer confidence in some indirect way. My guess is if we do see an effect, it won’t show until somewhere late in the year.” — Schottenstein, M/I Homes

“International trade tensions and the new tariffs have emerged as unpredictable variables in the current environment. The headline news of tariffs and their potential inflationary effects has dampened our confidence. However, we do not believe tariffs will have a material impact on our cost structure in 2025.” — Bauer, Tri Pointe Homes