NVR · 10-Q · 2026Q2 · Full report
Gross Margin Drivers
NVR INC · 2026-08-05 · Importance 50 · Surprise 58 · In source text
Homebuilding gross margin decreased to 19.2% in the second quarter of 2026 from 21.5% in the second quarter of 2025, and to 19.4% for the first six months from 21.7%. Higher lot costs, pricing pressure from affordability challenges and weak consumer sentiment reduced margins in both periods. Contract land deposit impairments increased to $21,700 thousand in the second quarter and $30,600 thousand in the first six months, compared with $13,200 thousand and $21,300 thousand, respectively, in 2025. Six-month gross margin declined in every region, including Mid Atlantic to 21.5% from 23.8%, North East to 22.2% from 26.3%, Mid East to 20.5% from 20.7% and South East to 17.6% from 19.2%.
Key facts
- Homebuilding consolidated gross profit for the three months ended June 30, 2026 was $438,554 compared to $548,284 for the three months ended June 30, 2025. source
- We expect continued margin pressure from higher land prices and from repositioning of communities as the housing market continues to adjust. source
- Contract land deposit impairments totaled approximately $21,700 in the second quarter of 2026 compared to $13,200 in the second quarter of 2025. source
- Contract land deposit impairments totaled approximately $30,600 in the six months ended June 30, 2026, compared to $21,300 in the first six months of 2025. source
- Homebuilding gross profit margin percentage decreased to 19.2% in the second quarter of 2026 from 21.5% in the second quarter of 2025. source
- Mid Atlantic segment gross profit margin percentage decreased to 20.9% in the second quarter of 2026 from 23.5% in the second quarter of 2025. source
- North East segment gross profit margin percentage decreased to 22.0% in the second quarter of 2026 from 26.2% in the second quarter of 2025. source
- Mid East segment gross profit margin percentage decreased to 20.4% in the second quarter of 2026 from 21.0% in the second quarter of 2025. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -4.7% | Homebuilding consolidated gross profit for the three months ended June 30, 2026 was $438,554 compared to $548,284 for the three months… |
| margin | negative | probable | — | We expect continued margin pressure from higher land prices and from repositioning of communities as the housing market continues to adjust. |