A major U.S. homebuilder, NVR builds pre-sold homes under the Ryan Homes, NVHomes, and Heartland Homes brands—from starter to luxury—and runs a mortgage arm that lends to its own buyers. Founder Dwight Schar, a former Ryan Homes executive, started NVHomes in 1980, then stunned the industry by having his smaller company swallow his old employer in a deal dubbed "the pygmy eating the whale," which gave the firm its NVR name.
NVR's homebuilding gross margin fell to 19.2% in Q2 2026, the lowest quarterly level in the reported history.
Homebuilding contracted to its lowest point on record. fell 10.5% to $2.33 billion and dropped 29.1% to $236.5 million as higher lot costs, pricing pressure, and a $21.7 million land deposit charge compressed margins. The company continues to return capital aggressively, deploying $990 million on buybacks in the first half, but the core profitability engine is shrinking.
Key takeaways
Homebuilding contracted 230 to 19.2%, driven by higher lot costs, affordability-driven pricing pressure, and a $21.7 million for contract land deposit impairments.
Consolidated decreased 10.5% to $2.33 billion, as home settlements fell 8% and the average settlement price declined 3%.
fell 29.1% to $236.5 million and dropped 22.6% to $83.96, as the more than offset a lower share count from buybacks.
Section summaries
Management's Discussion and Analysis
NVR Q2 2026 net income fell 29% on 10% lower revenue as affordability pressures and higher lot costs compressed homebuilding gross margin to 19.2%.
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Consolidated revenues decreased 10% to $2.33B, driven by an 8% decline in home settlements and a 3% lower average settlement price.
New orders rose 9% , supported by a 4% increase in average active communities and a higher absorption rate, though the average new order price fell 5%.
turned negative at -$151.5 million, compared to $35.1 million in the prior-year quarter, while the company ended the period with $1.2 billion in cash and no borrowings.
SG&A expenses were flat but rose as a percentage of to 6.6% from 5.9%, reflecting on the lower sales base.
What changed
The Q1 2026 watch item for was whether 19.6% would hold or fall further; it fell further to 19.2%, marking a new low.
The new orders trend reversed the prior three quarters of decline (12%, 11%, 16%), rising 9% in Q2 2026, though the average selling price fell 5%.
The cancellation rate was not disclosed in this filing, leaving the Q1 2026 watch item unanswered after the 2025 full-year rate of 17%.
units and dollars were again not disclosed, continuing the absence of this metric since the 2024 year-end report.
What to watch
Q3 2026 homebuilding to see if the 19.2% level stabilizes or falls further as lot cost and pricing pressures persist.
New orders trend in Q3 2026 to confirm whether the 9% Q2 increase is durable or a temporary bounce against easier comparisons.
Cancellation rate disclosure in Q3 2026 after it went unreported in Q2, to see if the rate has moved from the 17% full-year 2025 level.
generation in Q3 2026 after the negative $151.5 million result in Q2, to assess whether the cash cycle normalizes.
Homebuilding contracted 230 to 19.2%, pressured by higher lot costs, pricing challenges, and $21.7M in contract land deposit impairments.
New orders rose 9% , supported by a 4% increase in average active communities and a higher , while the average new order price fell 5%.
SG&A expenses were flat but deleveraged to 6.6% of due to the top-line decline.
Cash and equivalents stood at $1.1B with no borrowings on the $300M ; $990M was deployed to 144,896 shares during the first half of 2026.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our market risks during the six months ended June 30, 2026. For additional information regarding our market risks, see Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025.
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There have been no material changes in our market risks during the six months ended June 30, 2026. For additional information regarding our market risks, see Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025.
We are involved in various litigation matters arising in the ordinary course of business. In the opinion of management, and based on advice of legal counsel, this litigation is not expected to have a material adverse effect on our financial position, results of operations or cas…
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We are involved in various litigation matters arising in the ordinary course of business. In the opinion of management, and based on advice of legal counsel, this litigation is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Legal costs incurred in connection with outstanding litigation are expensed as incurred.
There have been no material changes to the risk factors as previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.
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There have been no material changes to the risk factors as previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.