Overview and Outlook The homebuilding sector continued to experience softer than expected demand during the second quarter of 2026, due to persistent affordability concerns, diminished consumer confidence and economic impacts from the ongoing military actions in Iran, which were exacerbated earlier in the year by severe winter storms. While U.S demographics continue to support demand for our affordable, move-in ready homes from millennial, Gen Z and baby boomer generations, these buyers are increasingly reliant on financing assistance to overcome market uncertainty and manage monthly payments and do not feel urgency to commit to a near-term purchase. Our ability to offer financing incentives, including interest rate locks and buy-downs, remains a key differentiator when compared to resale homes, as individual sellers are typically not able to provide such incentives. We believe that the current environment will remain challenging and will require higher incentive utilization, even as we look to optimize every asset and prioritize margin preservation. Construction cycle times remained under 110 calendar days, below our historical normalized time of approximately 120 days and materially improved from more than 150 days over the last several years as the supply chain and labor markets return to normal conditions. Our all-spec strategy also minimizes variability and creates efficiencies through repeatability. Land costs remain elevated following years of historically high land acquisition and development costs. Our larger scale and purchasing power allow us to secure volume discounts from national vendors for our construction materials as the market has re-aligned its capacity needs, helping offset some of this pressure. We believe that the execution of our all-spec strategy of move-in ready homes with a commitment to affordability appropriately focuses on our key financial goals of strong home closing revenue and home closing gross margin, controlling selling, and general and administrative costs, and maintaining sufficient liquidity. Summary Company Results Home closing volume of 3,725 homes in the three months ended June 30, 2026 was down 10.7% from 4,170 homes in the same prior year period. Lower closing volume combined with a 3.8% decrease in average sales price ("ASP") on closings resulted in $1.4 billion in home closing revenue, a 14.1% decrease from $1.6 billion in the three months ended June 30, 2025. Lower home closing volume, closing ASPs and higher lot costs all drove home closing gross profit of $253.6 million in the three months ended June 30, 2026 compared to $341.3 million in the comparable prior year period. The reduced ASP is primarily the result of geographic mix shift and contributed to the second quarter 2026 home closing gross margin decline of 280 basis points to 18.3%, compared to 21.1% in the prior year period. The decrease in home closing gross margin was also attributable to higher lot costs, all of which were only partially offset by savings achieved in direct costs and shorter construction cycle times. Financial services profit of $5.3 million in the three months ended June 30, 2026 was relatively flat compared to $5.6 million in the prior year period. Commissions and other sales costs of $91.8 million in the three months ended June 30, 2026 decreased $17.0 million due primarily to lower home closing revenue. General and administrative expenses of $52.4 million in the three months ended June 30, 2026 decreased $2.8 million from the same period of 2025, largely due to savings in compensation expense and intentional reductions in discretionary expenses. Earnings before income taxes for the three months ended June 30, 2026 of $120.6 million decreased $72.5 million year over year from $193.1 million in the same period of 2025. The effective income tax rate of 24.8% for the three months ended June 30, 2026 increased slightly from 23.9% in the comparable period of 2025. The decrease in year-over-year volume and profitability resulted in net earnings of $90.6 million in the three months ended June 30, 2026 versus $146.9 million in the three months ended June 30, 2025. For the six months ended June 30, 2026, home closing volume and ASP on closings decreased 11.8% and 4.4%, respectively, for a combined decrease in home closing revenue of 15.6%. Home closing gross margin of 17.9% declined 360 basis points year over year, for a $189.6 million decrease in home closing gross profit for the same reasons noted above. Year to date, commissions and other sales costs decreased $32.3 million from the comparable 2025 period due to the lower home closing volume. General and administrative expenses for the six months ended June 30, 2026 decreased $8.4 million year over due to lower compensation expense and intentional reduction in discretionary spending. Lower revenue, gross margin and profitability, and an effective tax rate of 24.4% led to net income of $145.9 million for the six months ended June 30, 2026, compared to $269.7 million for the comparable 2025 period. Home orders of 3,575 for the three months ended June 30, 2026 decreased 8.7% from 3,914 home orders in the prior year quarter due to an 18.6% decrease in orders pace to 3.5 net homes per month, offset by the 13.8% increase in average active communities. Home order value for the three months ended June 30, 2026 of $1.4 billion decreased 11.1% year-over-year, due 28 to lower order volume and a 2.6% decrease in ASP on orders caused by the same factors discussed previously for the second quarter of 2026. Our cancellation rate of 13% in the three months ended June 30, 2026 increased from 10% in the comparable 2025 period, reflecting the tougher selling environment. For the six months ended June 30, 2026, home orders and home order value decreased 7.1% and 10.6%, respectively, over the prior year and the cancellation rate of 12% rose from 9% in the comparable prior year period. We ended the second quarter of 2026 with 1,715 homes in backlog valued at $661.9 million, decreases of 1.9% and 4.8%, respectively, from June 30, 2025. The lower backlog units are due to entering the quarter with lower backlog, combined with lower order volume. We ended the second quarter of 2026 with 340 active communities, up from 312 at June 30, 2025 and 336 at December 31, 2025. We purchased approximately 4,700 lots for $277.4 million, spent $405.8 million on land development, net of reimbursements, and started construction on 6,453 homes during the six months ended June 30, 2026. Company Positioning We believe that the focus on community count growth, our move-in ready homes with a 60-day closing ready commitment, and our partnership with external realtors create a differentiated strategy that has aided us in our growth in the highly competitive new home market. Our focus on growing our community count and market share includes the following strategic initiatives: •Embracing external realtor relationships, as we view realtors as a strategic partner who assists with sourcing homebuyers, particularly first-time homebuyers who view the realtor as a trusted advisor; •Offering our customers affordable, move-in ready homes with a 60-day closing ready commitment, aligned with their expectations for traditional resale housing timelines; •Delivering affordable homes through simplification of production processes and maintaining levels of spec inventory that are aligned with our strategy; •Continuously improving the overall home buying experience through simplification and innovation; and •Offering energy-efficient homes that are cleaner and healthier than resale homes. In addition to these strategic initiatives, we also remain committed to the following: •Achieving or maintaining a top 5 market position in all of our markets, and maintaining our status as a top 5 national builder (based on homes closed in 2025); •Targeting a strong, yet sustainable, orders pace through the use of consumer and market research to ensure that we build homes that offer our buyers their desired features and amenities; •Maintaining and where possible, expanding, our home closing gross profit by growing closing volume, allowing us to better leverage our direct overhead; •Carefully managing our liquidity and maintaining a strong balance sheet. We ended the second quarter of 2026 with a 26.8% debt-to-capital ratio and a 17.1% net debt-to-capital ratio; •Balancing return of capital to our stockholders with internal growth goals, utilizing both share repurchases and dividend payments; •Managing construction efficiencies and costs through national and regional vendor relationships with a focus on timely, quality construction and warranty management; and •Promoting a positive environment for our employees through our commitment to inclusion, culture, and belonging, and providing market-competitive benefits in order to develop and motivate our employees, minimize turnover and maximize recruitment efforts. 29 Critical Accounting Estimates The critical accounting estimates that we deem to involve the most difficult, subjective or complex judgments include real estate valuation and cost of home closings and warranty reserves. There have been no significant changes to our critical accounting estimates during the six months ended June 30, 2026 compared to those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our 2025 Annual Report. 30 Home Closing Revenue, Home Orders and Order Backlog The composition of our closings, home orders and backlog is constantly changing and is based on a changing mix of communities with various price points between periods as new projects open and existing projects wind down and close-out. Further, individual homes within a community can range significantly in price due to differing square footage, option selections, lot sizes and quality and location of lots (e.g. cul-de-sac, view lots, greenbelt lots). These variations affect the comparability between our home orders, closings and backlog due to the changing mix between periods. The tables on the following pages present operating and financial data that we consider most critical to managing our operations (dollars in thousands): Home Closing Revenue Three Months Ended June 30, Quarter over Quarter 2026 2025 Change $ Change % Total Dollars $ 1,387,911 $ 1,615,709 $ (227,798) (14.1) % Homes closed 3,725 4,170 (445) (10.7) % Average sales price $ 372.6 $ 387.5 $ (14.9) (3.8) % West Region Dollars $ 400,755 $ 549,205 $ (148,450) (27.0) % Homes closed 825 1,165 (340) (29.2) % Average sales price $ 485.8 $ 471.4 $ 14.4 3.1 % Central Region Dollars $ 446,726 $ 480,425 $ (33,699) (7.0) % Homes closed 1,308 1,374 (66) (4.8) % Average sales price $ 341.5 $ 349.7 $ (8.2) (2.3) % East Region Dollars $ 540,430 $ 586,079 $ (45,649) (7.8) % Homes closed 1,592 1,631 (39) (2.4) % Average sales price $ 339.5 $ 359.3 $ (19.8) (5.5) % Six Months Ended June 30, Quarter over Quarter 2026 2025 Change $ Change % Total Dollars $ 2,495,733 $ 2,957,813 $ (462,080) (15.6) % Homes closed 6,692 7,586 (894) (11.8) % Average sales price $ 372.9 $ 389.9 $ (17.0) (4.4) % West Region Dollars $ 736,938 $ 1,028,841 $ (291,903) (28.4) % Homes closed 1,511 2,163 (652) (30.1) % Average sales price $ 487.7 $ 475.7 $ 12.0 2.5 % Central Region Dollars $ 823,026 $ 892,962 $ (69,936) (7.8) % Homes closed 2,416 2,561 (145) (5.7) % Average sales price $ 340.7 $ 348.7 $ (8.0) (2.3) % East Region Dollars $ 935,769 $ 1,036,010 $ (100,241) (9.7) % Homes closed 2,765 2,862 (97) (3.4) % Average sales price $ 338.4 $ 362.0 $ (23.6) (6.5) % 31 Home Orders (1) Three Months Ended June 30, Quarter over Quarter 2026 2025 Change $ Change % Total Dollars $ 1,376,338 $ 1,547,438 $ (171,100) (11.1) % Homes ordered 3,575 3,914 (339) (8.7) % Average sales price $ 385.0 $ 395.4 $ (10.4) (2.6) % West Region Dollars $ 391,197 $ 484,756 $ (93,559) (19.3) % Homes ordered 762 1,001 (239) (23.9) % Average sales price $ 513.4 $ 484.3 $ 29.1 6.0 % Central Region Dollars $ 439,882 $ 475,275 $ (35,393) (7.4) % Homes ordered 1,259 1,298 (39) (3.0) % Average sales price $ 349.4 $ 366.2 $ (16.8) (4.6) % East Region Dollars $ 545,259 $ 587,407 $ (42,148) (7.2) % Homes ordered 1,554 1,615 (61) (3.8) % Average sales price $ 350.9 $ 363.7 $ (12.8) (3.5) % Six Months Ended June 30, Quarter over Quarter 2026 2025 Change $ Change % Total Dollars $ 2,776,778 $ 3,105,615 $ (328,837) (10.6) % Homes ordered 7,239 7,790 (551) (7.1) % Average sales price $ 383.6 $ 398.7 $ (15.1) (3.8) % West Region Dollars $ 835,490 $ 1,024,350 $ (188,860) (18.4) % Homes ordered 1,660 2,094 (434) (20.7) % Average sales price $ 503.3 $ 489.2 $ 14.1 2.9 % Central Region Dollars $ 897,181 $ 964,435 $ (67,254) (7.0) % Homes ordered 2,575 2,663 (88) (3.3) % Average sales price $ 348.4 $ 362.2 $ (13.8) (3.8) % East Region Dollars $ 1,044,107 $ 1,116,830 $ (72,723) (6.5) % Homes ordered 3,004 3,033 (29) (1.0) % Average sales price $ 347.6 $ 368.2 $ (20.6) (5.6) % (1)Home orders for any period represent the aggregate sales price of all homes ordered, net of cancellations. We do not include orders contingent upon the sale of a customer’s existing home or a mortgage pre-approval as a sales contract until the contingency is removed. 32 Order Backlog (1) At June 30, Quarter over Quarter 2026 2025 Change $ Change % Total Dollars $ 661,906 $ 695,476 $ (33,570) (4.8) % Homes in backlog 1,715 1,748 (33) (1.9) % Average sales price $ 386.0 $ 397.9 $ (11.9) (3.0) % West Region Dollars $ 173,220 $ 182,308 $ (9,088) (5.0) % Homes in backlog 334 366 (32) (8.7) % Average sales price $ 518.6 $ 498.1 $ 20.5 4.1 % Central Region Dollars $ 218,725 $ 220,889 $ (2,164) (1.0) % Homes in backlog 616 583 33 5.7 % Average sales price $ 355.1 $ 378.9 $ (23.8) (6.3) % East Region Dollars $ 269,961 $ 292,279 $ (22,318) (7.6) % Homes in backlog 765 799 (34) (4.3) % Average sales price $ 352.9 $ 365.8 $ (12.9) (3.5) % (1)Our backlog represents net home orders that have not closed. Active Communities and Cancellation Rates Active Communities Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Ending Average Ending Average Ending Average Ending Average Total 340 342.5 312 301.0 340 340.4 312 297.8 West Region 89 88.5 85 85.0 89 86.6 85 87.0 Central Region 99 103.0 85 83.5 99 106.1 85 85.6 East Region 152 151.0 142 132.5 152 147.7 142 125.2 Cancellation Rates (2) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Total 13 % 10 % 12 % 9 % West Region 9 % 9 % 8 % 8 % Central Region 14 % 11 % 13 % 10 % East Region 14 % 10 % 13 % 10 % (2)Cancellation rates are computed as the number of canceled units for the period divided by the gross sales units for the same period. 33 Operating Results Companywide. In the three months ended June 30, 2026, we closed 3,725 homes, 10.7% lower than 4,170 closings in the three months ended June 30, 2025. The decrease in home closing volume combined with a 3.8% lower ASP on closings resulted in home closing revenue of $1.4 billion for the three months ended June 30, 2026, 14.1% lower than the same period in 2025. Home order volume in the three months ended June 30, 2026 of 3,575 homes declined 8.7% from 3,914 homes in the three months ended June 30, 2025, due to an 18.6% decrease in orders pace to 3.5 net homes per month in the three months ended June 30, 2026 which was partially offset by a 13.8% increase in average active communities. Demand has been meaningfully impacted by weak consumer confidence that has been exacerbated by economic and geo-political events. Home order value of $1.4 billion for the three months ended June 30, 2026 declined 11.1% from $1.5 billion in the prior year period, due to the lower home order volume combined with 2.6% lower ASP on orders. The decline in ASP on both closings and orders was caused by a shift in geographic mix. Order cancellations of 13% for the three months ended June 30, 2026 were up from 10% in the comparable 2025 period. We believe our low cancellation rates compared to industry averages reflects the benefits of a shorter timeline to home closing resulting from our move-in ready homes with a 60-day closing ready commitment. For the six months ended June 30, 2026, home closing volume of 6,692 closings was 11.8% lower than the prior year period, and ASP on closings decreased 4.4%, generating home closing revenue of $2.5 billion, a 15.6% decline from $3.0 billion in the prior year period. Home order volume of 7,239 for the six months ended June 30, 2026 was down 7.1% over the prior year period, which combined with a 3.8% lower ASP on orders led to a 10.6% decrease in home order value of $2.8 billion. We ended the second quarter of 2026 with 340 actively selling communities, up from 312 at June 30, 2025. The second quarter of 2026 ended with 1,715 homes in backlog valued at $661.9 million, compared to 1,748 units valued at $695.5 million at June 30, 2025. The year over year decrease in backlog homes is due to entering the quarter with fewer homes in backlog and lower order volume. West. The West Region generated $400.8 million in home closing revenue in the three months ended June 30, 2026, a 27.0% decrease compared to $549.2 million in the prior year period. The lower revenue was due entirely to 29.2% lower closing volume of 825 homes in the three months ended June 30, 2026, compared to 1,165 homes in the prior year. ASP on closings increased 3.1% due to geographic mix within the region. Home orders for the three months ended June 30, 2026 of 762 were down 23.9% from 1,001 in the prior year period, due largely to the 25.6% decrease in orders pace, which was partially offset by a 4.1% increase in average active communities. The orders pace of 2.9 homes per month in the three months ended June 30, 2026 is reflective of a tougher selling environment in most of the West Region's markets, and compares to 3.9 homes per month in the same period of the prior year. Home order value of $391.2 million for the three months ended June 30, 2026 decreased 19.3% due entirely to the lower order volume, as ASP on orders increased 6.0% year over year. The West Region had the lowest cancellation rate in the Company, at 9% for the three months ended June 30, 2026, consistent with the prior year period. For the six months ended June 30, 2026, home closing revenue of $736.9 million decreased 28.4% due to a 30.1% decrease in home closing volume offset by a 2.5% higher ASP on closings for the same reasons as noted above for the second quarter. Home order volume in the West Region of 1,660 decreased 20.7% due to a 20.0% decrease in orders pace to 3.2 net homes per month, on a consistent number of average actively selling communities. Home order value of $835.5 million was down 18.4% as the lower volume was partially offset by a 2.9% increase in ASP. The year-to-date cancellation rate of 8% was consistent with the prior year period. The West Region ended the second quarter of 2026 with 334 homes in backlog valued at $173.2 million, compared to 366 units valued at $182.3 million at June 30, 2025. The lower backlog units are the combined effect of entering the quarter with fewer backlog homes and lower orders in the second quarter of 2026. Central. The Central Region closed 1,308 homes in the three months ended June 30, 2026, down 4.8% from 1,374 in the prior year period. Home closing revenue of $446.7 million in the three months ended June 30, 2026 was 7.0% lower than $480.4 million in the prior year period due to the combined impact of lower home closing volume and a 2.3% decrease in ASP on closings. The decline in ASP on closings is a result of community mix within the region, with newer communities opening at lower ASPs. Home order volume decreased 3.0% to 1,259 homes in the three months ended June 30, 2026 due to a decline in orders pace to 4.1 net homes per month, partially offset by a 23.4% increase in average active community count. The decrease in orders volume combined with a 4.6% lower ASP on orders led to home order value of $439.9 million in the three months ended June 30, 2026, 7.4% lower than the prior year period. The Central Region cancellation rate of 14% in the three months ended June 30, 2026 was up from 11% in the prior year period. The Central Region generated home closing revenue of $823.0 million for the six months ended June 30, 2026, 7.8% lower than the prior year due to a 5.7% decline in closing volume of 2,416 homes and a 2.3% decrease in ASP on closings. Year-to-date ASP on closings decreased from the prior year period for the same reasons noted for the second quarter of 2026. Home order volume for the six months ended June 30, 2026 of 2,575 homes decreased 3.3%, due to a 21.2% decrease in orders 34 pace of 4.1 net homes per month, offset by a 23.9% increase in average active communities. Home order value was $897.2 million for the six months ended June 30, 2026, down 7.0% from $964.4 million, in the prior year period, due to lower order volume and a 3.8% reduction in ASP on orders. The year-to-date cancellation rate of 13% was up from 10% in the prior year period. The Central Region ended the second quarter of 2026 with 616 units in backlog, up 5.7% from prior year due to a slightly lower backlog conversion rate in the second quarter of 2026 of 197% compared to 208% in the second quarter of 2025. The higher backlog units combined with a 6.3% lower ASP led to backlog value of $218.7 million as of June 30, 2025, relatively flat with the prior year period. East. During the three months ended June 30, 2026, the East Region closed 1,592 homes, generating $540.4 million in home closing revenue, down 2.4% and 7.8%, respectively from 1,631 closings and $586.1 million in the comparable prior year period. The 5.5% lower ASP on home closings resulted from incremental incentives offered in certain markets to sell through higher levels of aged spec inventory. Home order volume of 1,554 homes for the three months ended June 30, 2026 declined 3.8%, due to a lower orders pace of 3.4 net homes per month, as compared to 4.1 net homes per month in the prior year period, which was partially offset by a 14.0% higher average active community count. The higher community count reflects continued growth in our newer markets in Alabama and Mississippi. Home order value of $545.3 million in the three months ended June 30, 2026 decreased 7.2% from $587.4 million in the prior year period due to the lower home order volume and a 3.5% decrease in ASP on orders year over year, for the same reasons as ASP on closings. The East Region cancellation rate of 14% in the three months ended June 30, 2026 was up from 10% in the same prior year period. For the six months ended June 30, 2026, the East Region home closing volume and revenue of 2,765 homes for $935.8 million in home closing revenue, declining 3.4% and 9.7%, respectively, compared to the 2025 period. Home order volume of 3,004 homes or the six months ended June 30, 2026 was relatively flat with prior year, as an 18.0% increase in average active communities was nearly offset by a 15.0% lower orders pace of 3.4 net homes per month. The lower order volume combined with 5.6% decrease in ASP on orders led to a 6.5% decrease in home order value of $1.0 billion. Similar to the second quarter, ASP on closing and orders both declined due to incremental incentives in certain markets with excess aged inventory. The East Region's cancellation rate of 13% increased from 10% in the prior year period. The East Region ended the second quarter of 2026 with 765 homes in backlog valued at $270.0 million, down 4.3% and 7.6%, respectively, due to lower order volume and ASP. Land Closing Revenue and Gross Profit/(Loss) (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Land closing revenue $ 12,720 $ 8,277 $ 22,081 $ 23,698 Land closing gross profit/(loss) $ 524 $ (719) $ 255 $ 2,446 From time to time, we may sell certain lots or land parcels to other homebuilders, developers or investors if we feel the sale will provide a greater economic benefit to us than continuing home construction or where we are looking to diversify our land positions in a specific geography or divest of assets that no longer align with our strategy. Therefore, the timing of land closings is not typically consistent between periods. 35 Other Operating Information (dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Dollars Percent of Home Closing Revenue Dollars Percent of Home Closing Revenue Dollars Percent of Home Closing Revenue Dollars Percent of Home Closing Revenue Home Closing Gross Profit (1) Total $ 253,613 18.3 % $ 341,328 21.1 % $ 447,411 17.9 % $ 636,978 21.5 % Add: Real estate-related impairments 3,582 — 6,009 — Add: Write-off of terminated land deals 276 4,205 1,649 5,638 Adjusted Home Closing Gross Profit (2) $ 257,471 18.6 % $ 345,533 21.4 % $ 455,069 18.2 % $ 642,616 21.7 % West $ 78,360 19.6 % $ 114,462 20.8 % $ 139,840 19.0 % $ 219,433 21.3 % Add: Real estate-related impairments — — — — Add: Write-off of terminated land deals 126 561 226 1,123 Adjusted Home Closing Gross Profit (2) $ 78,486 19.6 % $ 115,023 20.9 % $ 140,066 19.0 % $ 220,556 21.4 % Central $ 85,345 19.1 % $ 106,587 22.2 % $ 153,950 18.7 % $ 197,316 22.1 % Add: Real estate-related impairments 2,191 — 3,464 — Add: Write-off of terminated land deals 150 222 492 558 Adjusted Home Closing Gross Profit (2) $ 87,686 19.6 % $ 106,809 22.2 % $ 157,906 19.2 % $ 197,874 22.2 % East $ 89,908 16.6 % $ 120,279 20.5 % $ 153,621 16.4 % $ 220,229 21.3 % Add: Real estate-related impairments 1,391 — 2,545 — Add: Write-off of terminated land deals — 3,422 931 3,957 Adjusted Home Closing Gross Profit (2) $ 91,299 16.9 % $ 123,701 21.1 % $ 157,097 16.8 % $ 224,186 21.6 % (1)Home closing gross profit represents home closing revenue less cost of home closings, including impairments, if any. Cost of home closings includes land and associated development costs, direct home construction costs, an allocation of common community costs (such as architectural, legal and zoning costs), interest, sales tax, impact fees, warranty, construction overhead and closing costs. (2)Adjusted Home closing gross profit is a non-GAAP measure and should be considered in addition to, rather than as a substitute for, the comparable GAAP financial measures. We believe this non-GAAP financial measure is relevant and useful to investors in understanding our operating results and may be helpful in comparing the Company with other companies in the homebuilding and other industries to the extent they provide similar information. Companywide. Home closing gross profit for the three months ended June 30, 2026 was $253.6 million, with a home closing gross margin of 18.3% down 280 basis points from 21.1% in the three months ended June 30, 2025. For the six months ended June 30, 2026, home closing gross profit was $447.4 million, or 17.9%, down 360 basis points from 21.5% in the six months ended June 30, 2025. The margin decline for both the three and six months ended June 30, 2026 was due to the combined impact of lower ASPs, reduced leverage of fixed costs on lower home closing revenue and higher lot costs, all of which were only partially offset by savings in direct costs and shorter construction cycle times. Additionally, home closing gross margin was negatively impacted by real estate-related impairments and charges related to terminated land contracts. Excluding these charges, adjusted home closing gross margin was 18.6% and 21.4% for the three months ended June 30, 2026 and 2025, respectively, and was 18.2% and 21.7% for the six months ended June 30, 2026 and 2025, respectively. West. The West Region had home closing gross margin of 19.6% for the three months ended June 30, 2026, down 120 basis points from 20.8% in the three months ended June 30, 2025. For the six months ended June 30, 2026, the West Region home closing gross margin of 19.0% declined 230 basis points. The decline in home closing gross margin for both the three and six month periods ended June 30, 2026 was due to lost leverage on lower home closing revenue and higher lot costs, with some 36 offsetting benefit from direct costs savings. Contract termination and impairment charges were not materially impactful in the West Region for any periods presented. Central. The Central Region home closing gross margin of 19.1% for the three months ended June 30, 2026 decreased 310 basis points from 22.2% in the prior year period due to increased lot costs and reduced leverage on lower home closing ASPs and home closing revenue, partially offset by savings in direct costs. Real estate-related impairments and charges for terminated contracts also negatively impacted home closing gross margin for the three months ended June 30, 2026 by 50 basis points. Excluding these charges, adjusted home closing gross margin was 19.6% and 22.2% for the three months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, the Central Region home closing gross margin of 18.7% declined 340 basis points for the same reasons as the second quarter of 2026. Excluding real estate-related impairments and contract termination charges for the six months ended June 30, 2026 and 2025, adjusted home closing gross margin was 19.2% and 22.2%, respectively. East. The East Region home closing gross margin was 16.6% and 20.5% for the three months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, the East Region home closing gross margin of 16.4% decreased 490 basis points from 21.3% in the same period of 2025. The margin decline in both the three and six month periods was due to the increased use of incentives, lost leverage on lower home closing revenue and higher lot costs, which more than offset the savings in direct costs. The impact of real estate-related impairments and charges incurred related to terminated land contracts also had a negative impact on East Region home closing gross margin. Excluding these items, adjusted home closing gross margin was 16.9% and 21.1% for the three months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, adjusted home closing gross margin was 16.8% and 21.6%, respectively. Financial Services Profit (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Financial services profit $ 5,327 $ 5,611 $ 8,820 $ 9,174 Financial services profit represents the net profit of our financial services operations, including the operating profit generated by our wholly-owned title and insurance companies, Carefree Title and Meritage Insurance, respectively, as well as our portion of earnings from our mortgage joint ventures. Results from financial services are closely tied to the number of home closings in each of our markets where we have financial services operations. Selling, General and Administrative Expenses and Other Expenses (dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Commissions and other sales costs $ (91,805) $ (108,830) $ (171,277) $ (203,550) Percent of Home closing revenue 6.6 % 6.7 % 6.9 % 6.9 % General and administrative expenses $ (52,380) $ (55,183) $ (103,782) $ (112,180) Percent of Home closing revenue 3.8 % 3.4 % 4.2 % 3.8 % Interest expense $ (2,187) $ — $ (2,774) $ — Other income, net $ 7,472 $ 10,853 $ 14,435 $ 20,351 Provision for income taxes $ (29,934) $ (46,181) $ (47,149) $ (83,534) Commissions and Other Sales Costs. Commissions and other sales costs are comprised of internal and external commissions and related sales and marketing expenses such as advertising and sales office and completed spec home inventory costs. For the three months ended June 30, 2026, these costs decreased $17.0 million, to $91.8 million, and as a percentage of home closing revenue improved slightly to 6.6% in the three months ended June 30, 2026, compared to 6.7% in the prior year period. The lower spend for the three months ended June 30, 2026 was the result of lower commissions paid on lower home closing revenue and lower maintenance and utility costs associated with having less spec homes in inventory. For the six months ended June 30, 2026, these costs decreased $32.3 million, to $171.3 million, and were flat as a percentage of home closing revenue of 6.9% in the current and prior year period. The lower dollar spend for the six months ending June 30, 2026 is tied directly to lower commissions due to reduced home closing revenue. General and Administrative Expenses. General and administrative expenses represent corporate and divisional overhead expenses such as salaries and bonuses, occupancy, insurance and travel expenses. For the three months ended June 30, 2026, general and administrative expenses of $52.4 million decreased $2.8 million from $55.2 million in the prior year period due to lower compensation expense and intentional reductions in discretionary spend. For the six months ended June 30, 2026, 37 general and administrative expenses of $103.8 million decreased $8.4 million from the prior year period, for the same reasons as the second quarter of 2026, but were also partially offset by increased spend on technology. General and administrative expenses as a percentage of home closing revenue were 3.8% and 4.2% for the three and six months ended June 30, 2026. The 40 basis points increase over both prior year periods was due to reduced leverage of fixed costs on lower home closing revenue. Interest Expense. Interest expense is comprised of interest incurred, but not capitalized, on our senior and convertible senior notes and loans payable and other borrowings, including our Credit Facility. We recognized interest expense of $2.2 million and $2.8 million for the three and six months ended June 30, 2026, respectively. There was no interest expense in the same periods of 2025 as all interest incurred was capitalized to qualifying assets. Other Income, Net. Other income, net, primarily consists of (i) sublease income, (ii) interest earned on our cash and cash equivalents, (iii) payments and awards related to legal settlements and (iv) our portion of pre-tax income or loss from non-financial services joint ventures. Other income, net was $7.5 million and $10.9 million for the three months ended June 30, 2026 and 2025, respectively, and decreased due to less interest income on lower cash balances. Other income, net was $14.4 million and $20.4 million for the six months ended June 30, 2026 and 2025, respectively, and decreased due to less interest income on lower cash balances as well as a favorable legal settlement recognized in the prior year period. Income Taxes. Our effective tax rate was 24.8% and 23.9% for the three months ended June 30, 2026 and 2025, respectively, and was 24.4% and 23.6% for the six months ended June 30, 2026 and 2025, respectively. The increase for both the three and six months ended June 30, 2026 was primarily due to an increase in state income taxes. Liquidity and Capital Resources Overview We have historically generated cash and funded our operations primarily from cash flows from operating activities. Additional sources of funds may include additional debt or equity financing and borrowing capacity under our Credit Facility. We exercise strict controls and believe we have a prudent strategy for Company-wide cash management, including those related to cash outlays for land acquisition and development and spec home construction. Our principal uses of cash include acquisition and development of land and lots, home construction, operating expenses, share repurchases and the payment of interest, routine liabilities and dividends. We may also opportunistically repurchase our senior notes. Cash flows for each of our communities depend on their stage of the development cycle, and can differ substantially from reported earnings. Early stages of development or expansion require significant cash outlays for land acquisitions, zoning plat and other approvals, community and lot development, and construction of model homes, roads, utilities, landscape and other amenities. Because these costs are a component of our real estate inventory and are not recognized in our income statement until a home closes, we incur significant cash outlays prior to recognition of earnings. In the later stages of a community, cash inflows may significantly exceed earnings reported for financial statement purposes, as the cash outflow associated with home and land construction was previously incurred. We strive to align our capital allocation and cash outlays with current market conditions. In times of community count growth, we incur significant outlays of cash through the land purchase, development and community opening stages whereas in in times of community count stability, these cash outlays are incurred in a more even-flow cadence with cash inflows from actively selling communities that are contributing closing volume and home closing revenue. Conversely, in a down turn environment, cash outlays for land and community count growth may be scaled back to preserve liquidity and we may curtail community count. At June 30, 2026, we had $807.3 million of cash and cash equivalents and $896.9 million available under the Credit Facility, thereby providing approximately $1.7 billion of total available capacity. Short-term Liquidity and Capital Resources Over the course of the next twelve months, we expect that our primary demand for funds will be for the construction of homes, as well as acquisition and development of both new and existing lots, operating expenses, including general and administrative expenses, interest and dividend payments and share repurchases. Although we don't anticipate any early redemptions in the near term, we may opportunistically retire or redeem a portion of our senior notes. We expect to meet these short-term liquidity requirements primarily through our cash and cash equivalents on hand and the net cash flows provided by our operations. Between our cash and cash equivalents on hand combined with the availability of liquidity from our Credit Facility, we believe that we currently have sufficient liquidity. Nevertheless, in the future, we may seek additional capital to strengthen our 38 liquidity position, enable us to acquire additional land inventory in anticipation of improving market conditions, and/or strengthen our long-term capital structure. Long-term Liquidity and Capital Resources Beyond the next twelve months, our principal demands for funds will be for the construction of homes, land acquisition and development activities needed to maintain our lot supply and active community count, payments of principal and interest on our senior and convertible senior notes as they become due or mature, dividend payments and share repurchases. We expect our existing and future generated cash will be adequate to fund our ongoing operating activities as well as provide capital for investment in future land purchases and related development activities. To the extent the sources of capital described above are insufficient to meet our long-term cash needs, we may also conduct additional public offerings of our securities, refinance or secure new debt or dispose of certain assets to fund our operating activities. There can be no assurances that we would be able to obtain such additional capital on terms acceptable to us, if at all, and such additional equity or debt financing could dilute the interests of our existing stockholders or increase our interest costs. Material Cash Requirements We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact both short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on our unaudited consolidated balance sheets as of June 30, 2026, while others are considered future commitments for materials or services not yet provided. Our contractual obligations primarily consist of principal and interest payments on our senior and convertible senior notes, loans payable and other borrowings, including our Credit Facility, letters of credit and surety bonds and operating leases. We have no material debt maturities until 2027. We also have requirements for certain short-term lease commitments, funding working capital needs of our existing unconsolidated joint ventures and other purchase obligations in the normal course of business. Other material cash requirements include land acquisition and development costs, home construction costs and operating expenses, including our selling, general and administrative expenses, as previously discussed. We plan to fund these commitments primarily with cash flows generated by operations, but may also utilize additional debt or equity financing and borrowing capacity under our Credit Facility. Our maximum exposure to loss on our purchase and option agreements is generally limited to non-refundable deposits and capitalized or committed pre-acquisition costs. For information about our loans payable and other borrowings, including our Credit Facility and senior and convertible senior notes, reference is made to Notes 5 and 6 in the notes to unaudited consolidated financial statements included in this report and are incorporated by reference herein. For information about our lease obligations, reference is made to Note 4 - Leases in the consolidated financial statements included in our Annual Report. Reference is made to Notes 1, 3, 4, and 15 in the notes to unaudited consolidated financial statements included in this report and are incorporated by reference herein. These Notes discuss our off-balance sheet arrangements with respect to land acquisition contracts and option agreements, and land development joint ventures, including the nature and amounts of financial obligations relating to these items. In addition, these Notes discuss the nature and amounts of certain types of commitments that arise in connection with the ordinary course of our land development and homebuilding operations, including commitments of land development joint ventures for which we might be obligated, if any. We do not engage in commodity trading or other similar activities. We had no derivative financial instruments that required derivative accounting under ASC 815-10, Derivatives and Hedging, at June 30, 2026 or December 31, 2025. Operating Cash Flow Activities During the six months ended June 30, 2026, net cash provided by operating activities totaled $290.8 million, and for the six months ended June 30, 2025, net cash used in operating activities totaled $28.9 million. Net cash provided by operating activities for the six months ended June 30, 2026 consisted largely of cash generated from net earnings of $145.9 million and a $132.3 million decrease in real estate. Cash flows used in operations in the six months ended June 30, 2025 reflected cash generated by net earnings of $269.7 million, which was offset by a $224.6 million increase in real estate. Investing Cash Flow Activities During the six months ended June 30, 2026 and 2025, net cash used in investing activities totaled $25.3 million and $21.6 million, respectively. Cash used in investing activities in both periods was mainly attributable to investments in unconsolidated entities and purchases of property and equipment. 39 Financing Cash Flow Activities During the six months ended June 30, 2026, net cash used by financing activities totaled $233.4 million, consisting of $230.0 million of share repurchases and $63.3 million of dividends paid, offset by $59.9 million in proceeds from liabilities related to consolidated real estate not owned. During the six months ended June 30, 2025, net cash provided by financing activities of $329.4 million primarily reflects the net proceeds of $492.1 million from the issuance of our 5.650% Senior Notes due 2035, offset by $90.0 million of share repurchases and $61.5 million of dividends paid. See 'Part II, Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds' for more information about our authorized share repurchase program. We believe that our leverage ratios provide useful information to the users of our financial statements regarding our financial position and cash and debt management. Debt-to-capital and net debt-to-capital are calculated as follows (dollars in thousands): As of June 30, 2026 December 31, 2025 Senior and convertible senior notes, net and loans payable and other borrowings $ 1,847,377 $ 1,829,054 Stockholders’ equity 5,057,937 5,195,643 Total capital $ 6,905,314 $ 7,024,697 Debt-to-capital (1) 26.8 % 26.0 % Senior and convertible senior notes, net, and loans payable and other borrowings $ 1,847,377 $ 1,829,054 Less: cash and cash equivalents (807,267) (775,157) Net debt $ 1,040,110 $ 1,053,897 Stockholders’ equity 5,057,937 5,195,643 Total net capital $ 6,098,047 $ 6,249,540 Net debt-to-capital (2) 17.1 % 16.9 % (1)Debt-to-capital is computed as senior and convertible senior notes, net and loans payable and other borrowings divided by the aggregate of total senior and convertible senior notes, net and loans payable and other borrowings and stockholders' equity. (2)Net debt-to-capital is considered a non-GAAP financial measure, and is computed as net debt divided by the aggregate of net debt and stockholders' equity. Net debt is comprised of total senior and convertible senior notes, net and loans payable and other borrowings, less cash and cash equivalents. The most directly comparable GAAP financial measure is the ratio of debt-to-capital. We believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing. Dividends During the three months ended June 30, 2026 and 2025, our Board of Directors approved, and we paid, a quarterly cash dividend on common stock of $0.48 and $0.43 per share, respectively. Quarterly dividends paid during the six months ended June 30, 2026 and 2025, totaled $0.96 and $0.86 per share, respectively. 40 Credit Facility Covenants Borrowings under the Credit Facility are unsecured, but availability is subject to, among other things, a borrowing base. The Credit Facility also contains certain financial covenants, including (a) a minimum tangible net worth requirement of $3.5 billion (which amount is subject to increase over time based on subsequent earnings and proceeds from equity offerings), and (b) a maximum leverage covenant that prohibits the leverage ratio (as defined therein) from exceeding 60%. We were in compliance with all Credit Facility covenants as of June 30, 2026. Our actual financial covenant calculations as of June 30, 2026 are reflected in the table below. Financial Covenant (dollars in thousands): Covenant Requirement Actual Minimum Tangible Net Worth > $3,576,606 $5,008,077 Leverage Ratio < 60% 15.2% Investments other than defined permitted investments < $1,527,423 $59,423 Seasonality Historically, we have experienced seasonal variations in our quarterly operating results and capital requirements. We typically take orders for more homes in the first half of the year than in the second half, which has created additional working capital requirements in the first and second quarters to build our inventories to satisfy seasonally higher demand associated with our 60-day closing ready commitment. While we expect the seasonal orders pattern to continue over the long term, a higher backlog conversion rate and our all-spec strategy may shift the timing of home closings and capital requirements to build our inventories to earlier in the year. Additionally, seasonality may, from time to time, be affected by short-term volatility in the homebuilding industry and in the overall economy. Recent Accounting Pronouncements See Note 1 to our unaudited consolidated financial statements included in this report for discussion of recent accounting pronouncements.