"M/I Homes' Q4 2025 earnings call this week peeled back details on how one of the nation's top-20 homebuilding enterprises will lean into a contrarian, spec-heavy strategy. Based on the firm's geographical footprint, product set and construction operational efficiencies, M/I executives are betting a measured spec strategy will pay dividends as homebuilding's spring selling season kicks into gear in a few weeks."
"I think we feel really good about where we are, not to be silly. I mean, if we didn't, we'd change. We want to be very aggressive in making certain that we have the standing product in the field, the inventory, so that we can take advantage of what hopefully is a decent selling environment over the next three or four or five months. So I think we feel our strategy is the right strategy."
"As much as 75% of M/I Homes' sales come from specs. This helped maintain a positive sales pace and operational efficiency, but the company's gross profit margin has declined, falling from 24.6% in Q4 2024 to 18.1% last quarter. Executives conceded that generous incentives, especially mortgage rate buydowns, are necessary to move this spec inventory. Still, Chairman, President & CEO Robert Schottenstein affirmed his commitment to this strategy, particularly with the spring selling season nearing."
M/I Homes is adopting a contrarian, spec-heavy blueprint that leverages its geographic footprint, product set, and construction efficiencies to sustain sales through spring. Up to 75% of sales derive from spec inventory, supporting a positive sales pace and operational efficiency but compressing gross profit margin from 24.6% in Q4 2024 to 18.1% last quarter. Generous incentives, notably mortgage rate buydowns, are being used to move spec homes and maintain pricing flexibility amid weak demand and affordability pressures. Competitors vary: some follow similar spec-heavy approaches while others shift toward built-to-order models such as KB Home's target.
Read at www.housingwire.com
Unable to calculate read time
Collection
[
|
...
]