Higher average sales prices in the first quarter helped grow revenue 6.3% to $100.8 million for United Homes Group. The builder closed 311 homes in the first quarter with an average sales price of $335,000, compared with 328 closings with an average sales price of $314,000 in the first quarter of 2023.

“United Homes Group made progress on a number of fronts in the first quarter of 2024, as we continued to set the foundation for our long-term expansion plans and established relationships that will allow us to execute on our land-light operating strategy,” said Michael Nieri, CEO of United Homes Group. “We entered into agreements with a number of strategic partners that will take much of the risk and capital associated with land development off our hands, allowing us to focus on the business of building and selling homes.”

During the company’s earnings call, president Jack Micenko and chief financial officer Keith Feldman shared that United Homes Group entered a strategic partnership with a land banker and entered a definitive agreement with land fund Developers Capital Fund in 2024.

“We moved approximately $17 million in finished lots to a larger land banking partner. This strategy will allow us to continue to be efficient with our balance sheet capital and take down lots as we are starting new homes,” Feldman said on the earnings call. “Additionally, we entered a definitive agreement for a newly created land fund for a total amount of up to $150 million, which will provide capital for future development into finished lots in our core markets.”

Chief operating officer Shelton Twine said the company’s Midlands division, which includes communities in Augusta, Georgia; Aiken, South Carolina; Columbia, South Carolina; and Sumter, South Carolina, was the largest contributor to closings and revenue in the first quarter. The company reported 384 net new-home orders in the first quarter and ended with a backlog of 262 homes, valued at $78.7 million. The company had a cancellation rate of 10% in the first quarter.

“Home building conditions continue to be favorable in our markets, as the combination of low existing-home inventory and strong employment trends has resulted in steady traffic at our communities,” Nieri said. “While the volatile interest rate environment has created some uncertainty with buyers, we have addressed affordability concerns through the use of financing incentives.”

Twine says financing incentives remain an important sales tool for United Homes Group. Incentive levels were elevated at the beginning of 2024, but the home builder was able to dial back incentives over the course of the quarter and anticipates a further pullback on incentives in 2024, interest rate permitting. Construction cycle times also returned to pre-pandemic levels in the quarter, according to Twine.

United Homes Group ended the quarter with an active community count of 63 and 10,900 lots owned or controlled. For the first quarter, the builder reported profits of $24.9 million, or $0.44 per share, compared with a non-cash loss of $204.5 million in the first quarter of 2023.