Home revenues and net income slipped on a year-over-year basis for United Homes Group during a transitional fiscal second quarter for the home builder.
“The second quarter of 2024 was a period of transition for our company as we set about consolidating recent acquisitions, rationalizing our workforce, and re-orienting our product offerings in some markets,” president Jack Micenko said during the company’s quarterly earnings call. “While we believe the actions we took during the quarter will be beneficial to our company in the long term, they did have an adverse impact on some of the aspects for our results this quarter. We have ambitious goals for our company and we felt that setting the right foundation on which to grow was an important step to take this quarter.”
United Homes Group, the No. 51 company on the 2024 Builder list, generated net income of $28.6 million in the second quarter, or $0.50 per share, down from $245.4 million, or $4.27 per share, in the second quarter of 2023.
The builder generated revenue of $109.4 million in the second quarter of 2024 on 337 home closings, down from revenue of $122.1 million in the second quarter of 2023 on 385 closings. The average sales price for closings in the quarter was $341,000, up from $313,000 in the prior-year period. While United Homes Group is continuing to offer mortgage rate buydown incentives, Micenko said the company is seeing an increasing number of buyers prefer closing cost dollar incentives.
United Homes Group generated 323 net new home orders in the second quarter compared to 341 in the prior-year period. Chief operating officer Shelton Twine said the company’s coastal operations—which includes Myrtle Beach, South Carolina and surrounding markets—grew net new orders by 59% year-over-year and its upstate operations—which includes the Clemson and Greenville-Spartanburg markets in South Carolina—generated order growth of 44% compared to the second quarter of 2023.
The builder ended the quarter with roughly 9,300 lots owned and controlled, with over 95% of its total lots controlled via land option agreement or land banking arrangement. Micenko said the company has the lots it needs for its growth targets for 2025, noting United Homes Group is continuing to push to add land deals while raising the standard of deals it is underwriting.
“The land environment is as competitive as its ever been. We are starting to see some pricing benefit on our input costs and we are getting some pricing back from the trades, [but] land is not one of those areas [we are seeing pricing benefits],” Micenko said. “Land continues to increase in price and competitiveness.”
During the call, Micenko also provided an update on the integration progress of the three builders United Homes Group has acquired since becoming a public company. The integration of Creekside Custom Homes, which United Homes Group acquired in January 2024, is furthest along, according to Micenko.
“That was the cleanest [integration] from the operational and product standpoint. We have worked through the majority of their inventory and we opened communities under our product set and our brand in that market,” Micenko said. “That integration is the furthest along, [it is] about 85% or 90% of the way there.”
Micenko said the integration with Rosewood Communities—acquired in October 2023—is about halfway complete while the integration of Herring Homes—acquired in August 2023—has been delayed due in part to the entrance into a new market in Raleigh.
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