Core Viewpoint - The U.S. homebuilding industry is facing significant challenges due to high mortgage rates, elevated construction costs, and a shortage of buildable lots, but it remains poised for growth driven by factors such as potential Federal Reserve rate cuts and strong demand for homeownership [1][2][4]. Industry Overview - The Zacks Building Products - Home Builders industry includes manufacturers of residential and commercial buildings, as well as companies providing financial services related to mortgages and title insurance [3]. - The industry encompasses various types of housing developments, including single-family homes, townhouses, and multi-family rental properties [3]. Current Challenges - Builders are experiencing financial pressures from rising material and labor costs, which limit their ability to price homes competitively [1][6]. - The National Association of Home Builders (NAHB) anticipates further interest rate cuts in 2025, but inflationary pressures have led to a reduction in projected cuts from 100 basis points to 75 basis points [4]. - The benchmark 30-year fixed mortgage rate reached 6.91%, marking a significant increase from previous levels [5]. Market Trends - Despite challenges, the industry is expected to grow due to limited home supply and strong demand for homeownership [2][9]. - Builders are implementing strategies such as mortgage buydown programs and a mix of speculative and build-to-order projects to meet diverse buyer needs [2][10]. - The use of mortgage rate buydowns is increasing, helping to drive demand by easing borrowers into full mortgage payments [10]. Financial Performance - In December, 31% of builders reduced home prices, with an average discount of 5%, while 60% offered additional incentives to boost sales [6]. - The NAHB/Wells Fargo Housing Market Index (HMI) remained at 46 in December, indicating ongoing pessimism among builders [6]. - The Zacks Building Products - Home Builders industry currently ranks 192, placing it in the bottom 23% of over 250 Zacks industries, reflecting a lower earnings outlook [12][14]. Company Highlights - **Taylor Morrison**: Experienced a 12.3% year-over-year growth in home closings and a 13.7% increase in new orders during the first nine months of 2024 [21]. The company has a Zacks Rank 3 and has rallied 17.9% in the past year [22]. - **PulteGroup**: Utilizes a cyclically resilient operating model and has gained 6.1% in the past year, with an upward revision in 2025 earnings estimates [25]. The company also holds a Zacks Rank 3. - **NVR**: Focuses on constructing homes primarily on a pre-sold basis and has gained 14.2% in the past year, with a three-to-five-year expected EPS growth rate of 14.2% [27]. NVR also carries a Zacks Rank 3.

Core Insights - Existing home sales in the United States increased in November, driven by optimism surrounding Fed rate cuts, stable mortgage rates, and improvements in the job market [1][8] - The median existing-home sales price rose 4.7% year over year to $406,100, influenced by declining housing inventory and increasing demand [2][15] Sales Performance - Existing home sales grew 4.8% month-over-month and 6.1% year-over-year, reaching a seasonally adjusted annual rate of 4.15 million, marking the largest year-over-year gain since June 2021 [15] - Sales in the Northeast, Midwest, and South regions saw significant increases, with year-over-year growth of 6.3%, 5.3%, and 3.3% respectively, while the West region remained flat [6][15] First-Time Buyers - First-time buyers accounted for 30% of sales in November, an increase from 27% in the previous month but a decrease from 31% a year ago [7] Housing Inventory - Total housing inventory at the end of November was 1.33 million units, down 2.9% from October but up 17.7% from the previous year [19] - The time to exhaust current inventory decreased to 3.8 months from 4.2 months in October [19] Mortgage Rates - The 30-year fixed-rate mortgage was reported at 6.72%, reflecting a 12 basis point increase from the previous week and a 5 basis point increase year-over-year [16] - The new normal for mortgage rates is expected to stabilize between 5.5% and 6.5% [20] Homebuilder Outlook - Homebuilders such as Taylor Morrison, NVR, and Tri Pointe Homes are expected to benefit from macroeconomic tailwinds, with projected earnings per share growth for 2025 of 11.2%, 7.4%, and 1.7% respectively [21][18][14] - Despite inflationary pressures, these companies are anticipated to experience growth in the near term [21]

Financial Performance - Consolidated revenues for Q3 2024 totaled $2,732,951, a 6% increase from Q3 2023[93]. - Net income for Q3 2024 was $429,323, or $130.50 per diluted share, with net income decreasing by 1% compared to Q3 2023[93]. - Homebuilding revenues increased by 7% in Q3 2024, primarily due to a 5% increase in the number of units settled[95]. - Homebuilding consolidated gross profit for the three months ended September 30, 2024, was $626,553, an increase of 2% from $610,235 in the same period of 2023[138]. - Homebuilding consolidated income before taxes for the nine months ended September 30, 2024, was $1,433,881, up 7% from $1,341,267 in the prior year[139]. Orders and Backlog - New orders increased by 19% in Q3 2024 compared to Q3 2023, with a new order cancellation rate rising to 14.5%[93][98]. - As of September 30, 2024, the backlog increased by 9% to 11,339 units and by 11% to $5,323,366 compared to the previous year[102]. - New Orders in the North East segment increased by 20% in the third quarter of 2024 compared to the third quarter of 2023[124]. - New orders, net of cancellations, totaled 5,650 units in Q3 2024, an increase from 4,746 units in Q3 2023[114]. Profit Margins and Expenses - Homebuilding gross profit margin percentage decreased to 23.4% in Q3 2024 from 24.3% in Q3 2023, impacted by higher lot costs[93][95]. - SG&A expenses in Q3 2024 increased by approximately $7,100 compared to Q3 2023, but as a percentage of revenue decreased to 5.6%[96]. - Segment profit for the Mid Atlantic was $214,132 in Q3 2024, compared to $212,826 in Q3 2023[113]. - Segment profit for the three months ended September 30, 2024, decreased by approximately $3,800, or 9%, from the same period in 2023, primarily due to increased general and administrative expenses[145]. Inventory and Land Management - The company controlled approximately 151,800 lots as of September 30, 2024, with 144,400 lots under Lot Purchase Agreements[88]. - Total sold inventory increased to $1,968,480,000 as of September 30, 2024, from $1,698,244,000 as of December 31, 2023, representing a 15.9% increase[117]. - Total unsold lots and housing units inventory rose to $225,950,000 as of September 30, 2024, compared to $216,481,000 as of December 31, 2023, marking a 4.3% increase[117]. - Contract land deposits, net, increased to $678,832,000 as of September 30, 2024, from $584,200,000 as of December 31, 2023, indicating a 16.2% rise[118]. Cash Flow and Financing - For the nine months ended September 30, 2024, net cash provided by operating activities was $737,412, primarily due to cash provided by earnings[160]. - Cash used in investing activities for the nine months ended September 30, 2024 was $19,797, mainly for purchases of property, plant, and equipment totaling $23,621[161]. - Net cash used in financing activities was $1,364,392 for the nine months ended September 30, 2024, including repurchase of 192,655 shares at an aggregate price of $1,493,362[162]. - The company experienced a decrease in cash, restricted cash, and cash equivalents by $646,777 for the nine months ended September 30, 2024[160]. Market and Segment Performance - Revenues for the Mid Atlantic segment were $1,147,893 in Q3 2024, slightly up from $1,146,559 in Q3 2023[110]. - The gross profit margin for the North East segment improved to 26.0% in Q3 2024 from 25.3% in Q3 2023[111]. - The Mid Atlantic segment's profit increased by approximately $46,100,000, or 8%, in the first nine months of 2024 compared to the same period in 2023[121]. - The North East segment's profit rose by approximately $31,700,000, or 25%, in the first nine months of 2024 compared to the same period in 2023[125]. - The South East segment experienced a decrease in profit of approximately $58,800,000, or 17%, in the first nine months of 2024 compared to the same period in 2023[134]. Tax and Credit Facilities - The effective tax rate for the three months ended September 30, 2024, was 20.3%, compared to 19.7% for the same period in 2023[148]. - As of September 30, 2024, the company had approximately $2,500,000 in cash and cash equivalents, with $282,900 in unused committed capacity under its revolving credit facility[150]. - The unsecured revolving credit agreement provides for aggregate revolving loan commitments of $300,000, with no borrowings outstanding as of September 30, 2024[157]. - The unsecured revolving mortgage repurchase facility allows for borrowings up to $150,000, with no borrowings outstanding as of September 30, 2024[158].

NVR, Inc. (NVR) reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.This upside was backed by improved demand trends, which resulted in higher settlements. Although the cancellation rate increased in the quarter, growth in new orders is encouraging for the company.Shares of this le ...

Exhibit 99.1 NVR, INC. ANNOUNCES THIRD QUARTER RESULTS October 22, 2024, Reston, VA—NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its third quarter ended September 30, 2024 of $429.3 million, or $130.50 per diluted share. For the third quarter ended September 30, 2024, net income decreased 1% and diluted earnings per share increased 4%, when compared to 2023 third quarter net income of $433.2 million, or $125.26 per diluted share. Co ...

Company Performance - NVR reported quarterly earnings of $130.50 per share, missing the Zacks Consensus Estimate of $132.08 per share, but showing an increase from $125.26 per share a year ago, representing an earnings surprise of -1.20% [1] - The company posted revenues of $2.68 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.78% and increasing from $2.51 billion year-over-year [1] - Over the last four quarters, NVR has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [1] Stock Performance - NVR shares have increased approximately 37.9% since the beginning of the year, outperforming the S&P 500's gain of 22.7% [2] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $132.43 on revenues of $2.66 billion, and for the current fiscal year, it is $500.28 on revenues of $10.26 billion [4] - The estimate revisions trend for NVR is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [4] Industry Context - The Building Products - Home Builders industry is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [5] - M/I Homes, another company in the same industry, is expected to report quarterly earnings of $4.94 per share, reflecting a year-over-year change of +2.5%, with revenues anticipated to be $1.13 billion, up 7.7% from the previous year [5]

NVR, Inc. (NVR) is likely to generate higher earnings and homebuilding revenues in third-quarter 2024 on a year-over-year basis.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, earnings slightly missed the Zacks Consensus Estimate, while the homebuilding revenues beat the same by 2.7%. On a year-over-year basis, earnings and homebuilding revenues increased 3.6% and 12%, respectively.The company’s earnings topped analysts’ expectations in six of the trail ...

NVR, Inc.'s (NVR) stock gained 34.9% in the year-to-date period compared with the Zacks Building Products - Home Builders industry's 25.2% growth, the Zacks Construction sector's 22% rise and the S&P 500's 20.8% rally. The stock has been rallying on a recent rate cut by the Federal Reserve, announced last month. NVR, which engages in the construction and sale of single-family detached homes, townhomes and condominium buildings, has been benefiting from improving demand, a disciplined business model, and str ...

Jessie Casson/DigitalVision via Getty Images Introduction Shares of NVR, Inc. (NYSE:NVR) have been on a role lately, rising 29% year to date and 24% since my initial coverage back in March 2024. At the time, my investment thesis was built around the fact that the company had an asset-light operating model through strategic purchasing of finished building lots which gives the company flexibility, reduces risk, and boosts return on capital. For those reasons, I felt comfortable underwriting a premium valuatio ...

A month has gone by since the last earnings report for NVR (NVR) . Shares have added about 6.1% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is NVR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. NVR Q2 Earnings Miss, Homebuilding Revenues Top NVR reported mixed ...