Earnings Snapshot: Home Sales Revenue Falls in Q4 for M.D.C. Holdings

Despite higher order volumes, home deliveries were lower in both the fourth quarter and the full year for the builder.

By Vincent Salandro

In its first earnings report since the announcement of its acquisition by Sekisui House, M.D.C. Holdings reported net income growth in the fourth quarter but a decline in new-home sales.

The home builder reported net income was $119.5 million, up from $79.7 million in the fourth quarter of 2022. For the full year, M.D.C. Holdings generated a net income of $401 million, down from $562.1 million in 2022.

Home sales revenue fell 12% year over year to $1.3 billion in the fourth quarter. Declines were most significant in M.D.C. Holdings’ Mountain region, which saw home sales revenue fall 32% compared with the fourth quarter of 2022. In the fourth quarter, home sales revenue inched up 3% year over year in the West region but fell 18% in the builder’s East region.

For the full year, home sales revenue was $4.5 billion, a 19% decline from 2022. Home sale revenue declines occurred across all three operating regions for the full year, led by a 28% decrease in the East region.

M.D.C. Holdings delivered 2,400 homes in the fourth quarter with an average price of $545,700, down from 2,554 homes with an average price of $582,300 in the fourth quarter of 2022. For the full year, home deliveries fell to 8,228 homes in 2023, compared with 9,710 homes in 2022.

Home orders increased to 1,515 homes in the fourth quarter, compared with 190 in the prior-year period. The monthly absorption rate of orders increased significantly to 2.17 from 0.29 in the fourth quarter of 2022. For the full year, net new-home orders totaled 7,144 in 2023 compared with 5,044 in 2022, while the absorption rate increased to 2.57 in 2023 from 2.02 in 2022.

At the end of the fourth quarter, M.D.C. Holdings had a backlog of 1,890 homes compared with 2,974 homes in backlog at the end of 2022.

The builder ended the year with 22,415 lots owned or controlled, compared with 25,302 lots at the end of 2022. Of the 22,415 lots, 17,999 were owned and 4,416 were optioned, according to the home builder’s earnings release.

The builder, which canceled its earnings call following the announcement of the Sekisui deal, outperformed analyst projections for the quarter, generating profits per share of $1.56 against expectations of $1.44 per share.