Difficult market conditions in the third quarter, including higher mortgage rates, weaker demand, and growing economic uncertainty, weighed down results for M/I Homes. On a year-over-year basis, new contracts, deliveries, and revenue were down for the builder.
“A combination of rising rates, along with elevated fuel prices, concerns with inflation, and the continued conflict in Iran have clearly impacted consumer confidence and demand and have contributed to growing economic uncertainty,” CEO and president Robert Schottenstein said during the builder’s earnings call. “The current choppy and challenging conditions may continue for some time.
“This is not the first time we’ve managed through challenging conditions,” Schottenstein continued. “We’ve been in business for 50 years and during times like this, execution matters more than ever.”
Schottenstein noted that the use of rate buydowns remains prevalent as a tool to incentivize prospective buyers, but the cost of these buydowns increased during the quarter as rates ticked higher. As a result, rate buydowns continued to put pressure on M/I Homes’ margins, which fell to 20.9% from 23.9% in the third quarter of 2025. However, in an environment where almost all builder peers are offering rate buydowns, Schottenstein said well-located communities and product quality remain key differentiators.
“I talk about how much execution matters during times like this. The quality of our product, the strength of our communities, and the skills of our sales associates all make a meaningful difference on our results,” he added. “In other words, nearly every builder is buying down rates but the builder’s results from one build to another clearly differ. The difference is often all about execution.”
In the third quarter, M/I Homes generated 1,861 new contracts, down 2% from a year ago. Year to date through the first nine months of 2026, home sales have increased 5% to 6,598. Regionally, new contracts increased in M/I Homes’ North region by 1% and decreased in its South region by 4%. The builder’s Smart Series homes, M/I’s most affordable line catered toward first-time buyers, represented about half of its sales in the third quarter.
Third quarter deliveries declined 2% to 2,241 homes, with northern deliveries increasing by 1% and southern deliveries decreasing by 5%. The builder had 246 communities at quarter’s end and reported a third quarter cancellation rate of 12%. M/I Homes said its strongest division performers in the quarter were Chicago; Columbus, Ohio; Minneapolis; Dallas; and Charlotte.
Total revenue in the third quarter declined 5% to $1.08 billion. M/I Homes generated a profit of $67 million, or $2.56 per share, in the third quarter compared to $107 million, or $3.92 per share, in the same period a year ago.
“Though these are more challenging times, we remain quite confident in the long-term fundamentals of the home building industry,” Schottenstein concluded. “With our strong land position, well-located geographic footprints, well-located communities, diverse product offering, and strong balance sheet, M/I Homes is well-positioned to manage through this current cycle.”
