LGIH · 10-Q · 2026Q1 · Full report

Supply Chain and Input Costs

LGI Homes, Inc. · 2026-04-28 · Importance 10 · Surprise 6

LGI sources standard construction materials and components predominantly in the U.S., often contracting materials and labor at fixed prices for the anticipated construction period to mitigate input cost volatility. The company purchases some components centrally to capture volume discounts and relies heavily on third-party subcontractors (non-union) who supply most raw materials; LGI does not typically hold large raw-material inventories. Management notes potential future cost pressures from inflation (labor, commodities, lumber) and states historically it has increased sales prices or implemented cost-effective changes to absorb these increased costs while preserving affordability.

Key facts

• The company generally contracts for materials and labor at a fixed price for the anticipated construction period of homes to mitigate price increases between start of construction and closing.
• Typically, the raw materials and most components used in the company's business are readily available in the United States and most construction work is substantially completed by third-party non-unionized subcontractors.
• The company said the price changes that most significantly influence operations are price increases in labor, commodities and lumber.
• The company stated it purchases some components and materials centrally to achieve volume discounts and reduce costs and ensure timely deliveries.
• The company typically does not store significant inventories of construction materials except for work in progress materials for homes under construction.