NVR, Inc. (NYSE: NVR) reported Q3 2026 consolidated revenue of $2.40 billion, down 8% from $2.61 billion, while diluted EPS fell 20% to $89.45 from $112.33. Net income declined 27% to $248.6 million as fewer home settlements, lower average prices, and a 270-basis-point contraction in homebuilding gross margin outweighed higher mortgage banking income.
Core Earnings Results
The results, released on October 22 for the quarter ended September 30, show that profitability weakened more than revenue. Homebuilding generated nearly all consolidated revenue, making its lower volume and margin the main drivers of the earnings decline.
The reduction in diluted EPS was smaller than the decline in net income because NVR’s diluted weighted-average share count fell by about 9% year over year.
| Metric | Q3 2026 | Q3 2025 | Year-Over-Year Change |
|---|---|---|---|
| Consolidated revenue | $2.40 billion | $2.61 billion | -8% |
| Homebuilding revenue | $2.35 billion | $2.56 billion | -8% |
| Homebuilding gross margin | 18.3% | 21.0% | -270 basis points |
| Income before taxes | $334.7 million | $444.1 million | About -25% |
| Net income | $248.6 million | $342.7 million | -27% |
| Diluted EPS | $89.45 | $112.33 | -20% |
The year-to-date figures indicate that the pressure extended beyond one quarter. For the first nine months of 2026, revenue declined 13% to $6.61 billion, net income fell 30% to $683.4 million, and diluted EPS decreased 24% to $240.54.
Homebuilding and Mortgage Banking Performance
Homebuilding demand and pricing both softened. Net new orders declined 7% to 4,391 homes, while the average new-order price fell 5% to $442,100. The cancellation rate increased to 21.0% from 19.4%, even as the average number of active communities edged up to 454 from 450.
Settlements also decreased 7% to 5,268 homes, and the average settlement price declined 2% to $445,900. These two movements explain most of the 8% reduction in homebuilding revenue.
Backlog provided a more favorable volume signal but also showed continued price pressure. Backlog units increased 10% to 10,121, while backlog value rose only 4% to $4.59 billion. The average backlog price fell to $453,000 from $479,500, meaning the higher unit count did not translate into comparable growth in backlog dollars.
Regionally, the Northeast recorded the sharpest order decline, with orders falling to 232 from 433. Orders declined more modestly in the Mid Atlantic, Mid East, and Southeast. Backlog units increased in those three regions but fell in the Northeast.
Mortgage banking offered a limited offset. Closed loan production decreased 10% to $1.38 billion, but segment income before taxes rose 7% to $35.0 million from $32.7 million. Mortgage banking fees increased to $53.1 million from $49.2 million despite the lower loan-closing volume.
Lower Margins Deepened the Profit Decline
Homebuilding gross margin contracted to 18.3% from 21.0%. NVR attributed the decline to higher lot costs, affordability-related pricing pressure, weak consumer sentiment, and approximately $24.8 million of contract land deposit impairments.
Homebuilding selling, general, and administrative expenses declined about 5% to $135.0 million, but that reduction was not enough to offset the lower revenue and gross margin. Homebuilding income before taxes consequently fell 27% to $299.7 million.
The lower share count cushioned the effect on per-share earnings. Diluted weighted-average shares declined to 2.779 million from 3.051 million, helping limit the EPS decline to 20% even though net income fell 27%. NVR repurchased 37,088 shares for $237.2 million during the quarter and 181,984 shares for $1.23 billion during the first nine months of 2026.
Balance Sheet and Capital Allocation
Homebuilding cash and cash equivalents stood at $1.09 billion on September 30, down about 42% from $1.88 billion at the end of 2025. At the same time, homebuilding inventory increased about 38% to $2.37 billion, including higher balances for lots and homes covered by customer sales agreements as well as unsold lots and homes.
Contract land deposits increased to $916.7 million from $851.5 million. Senior notes were nearly unchanged at $907.7 million, while customer deposits rose to $285.4 million from $249.2 million. The combination of lower cash, higher inventory, and $1.23 billion of year-to-date repurchases makes working-capital deployment and capital allocation important areas to monitor.
Recent Insider Transactions
The detailed insider transaction records include two director purchases and two officer or director sales during 2026. The supplied six-month summary reports zero purchases, which conflicts with the transaction-level records, so the entries below are presented without drawing conclusions about insider sentiment.
| Date | Insider | Role | Transaction | Reported Amount |
|---|---|---|---|---|
| August 7, 2026 | George R. Oliver Sr. | Director | Purchase of 63 shares at $6,431.51 per share | $405,185 |
| April 24, 2026 | Michael J. DeVito | Director | Purchase at $6,699.50 per share | $73,694 |
| February 13, 2026 | Susan Williamson Ross | Director | Sale at $7,922.06 per share | $1,584,412 |
| February 10, 2026 | Matthew B. Kelpy | Officer | Sale at $8,100.00 per share | $4,050,000 |
Stock gifts and derivative-security conversions reported in the same dataset are excluded from this table because they are not directly comparable with ordinary purchases and sales.
Risks Investors Need to Watch
- Affordability and consumer sentiment: NVR directly linked pricing pressure to continuing affordability challenges and weak sentiment. Further deterioration could weigh on orders, cancellation rates, and settlement prices.
- Homebuilding margin pressure: Higher lot costs and additional contract land deposit impairments could keep gross margin below the prior-year level even if settlement volume stabilizes.
- Backlog quality and conversion: Backlog units increased, but backlog value grew more slowly and average backlog price declined. Cancellations or slower conversion could reduce the volume support represented by the current backlog.
- Higher inventory and lower cash: Homebuilding inventory increased substantially as cash declined from the end of 2025. Future changes in settlements, inventory turnover, and repurchase spending will affect financial flexibility.
- Lower mortgage volume: Mortgage banking income increased during the quarter, but closed loan production fell 10%. Continued volume weakness could make the segment’s earnings improvement harder to sustain.
Summary
NVR’s Q3 2026 results were shaped by weaker homebuilding volume, lower prices, and higher costs, causing profit to fall considerably faster than revenue. A larger unit backlog and higher mortgage banking income offered partial support, while share repurchases reduced the decline in EPS. The main items to monitor are homebuilding margin, order cancellations, backlog conversion, and the balance between inventory investment, cash levels, and capital returns.
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