Positive momentum from the first half of the year carried through the third quarter for M/I Homes, with the home builder reporting record levels of revenue and profits. Additionally, president and CEO Robert Schottenstein said the company is in its strongest financial position in the home builder’s 47-year history.

M/I Homes, the 13th largest company on the 2023 BUILDER 100, increased profits by nearly $7.5 million to $139 million in the third quarter, or $4.82 per share. The profits per share outperformed analyst expectations by over $0.50 per share. The builder also reported $1 billion in revenue—a third quarter record—up 3% from the third quarter in 2022.

New contracts increased 50% on a year-over-year basis to 2,021 contracts in the third quarter and delivered homes increased 3% year over year to 2,096 homes with an average sales price of $481,000. M/I Homes reported a third-quarter cancellation rate of 10% and reported construction cycle times improved 50 days on a year-over-year basis.

“[The improvement in new contracts] reflects the strength of our product offerings, our intense focus and success in designing more affordable product, the quality of our communities, and our ability to selectively use below market financing incentives to drive both traffic and sales,” Schottenstein said during the home builder’s earnings call.

Approximately 55% of third quarter sales were to first-time buyers and 52% of sales were spec homes, according to executive vice president and chief financial officer Phillip Creek. Schottenstein said M/I Homes’ Smart Series homes—the builder’s most affordable product line—remains the leading contributor for the company’s strong sales performance. Smart Series sales comprise roughly 55% of total company sales. Schottenstein said on a regional basis, Dallas, Orlando, Tampa, Raleigh, Austin, and Columbus performed the strongest in the third quarter.

M/I Homes ended the quarter with 44,828 owned or controlled lots, a decrease of 2.7% compared to the third quarter of 2022. The builder owns 23,000 lots, which is roughly a three-year supply, according to Schottenstein. The company spent $106 million on land purchases and $151 million on land development in the third quarter; year to date, M/I Homes has invested $600 million into land expenses.

“Given our performance through three quarters of this year, along with the strength of our balance sheet, low debt levels, diverse product offerings, and well-located communities, we are positioned to have a very strong 2023,” Schottenstein said.