Direct Answer
9 SEC filers are classified under the Standard Industrial Classification codes that describe the homebuilders industry, and their latest annual reports show $119.6 billion of combined revenue and a median net margin of 6.9%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Homebuilders buy land, build and sell single-family homes and townhouses. Orders, backlog, pricing, incentives and land costs drive margins, and results are very sensitive to mortgage rates. The first numbers to compare across companies here are net orders and cancellation rate, backlog and average selling price.
Key Industry Metrics
- Net orders and cancellation rate: New home contracts signed in a period and the share canceled before closing. Orders lead deliveries and revenue, and rising cancellations suggest buyers losing financing or confidence.
- Backlog: Value or count of homes under contract but not yet closed. It gives visibility into coming deliveries, and a shrinking backlog with falling orders signals slower future revenue.
- Average selling price: Typical price of homes closed, shaped by region, size and mix of buyers. It can rise through mix toward larger homes, so compare it with incentives and base prices.
- Gross margin: Share of home sale revenue left after land, construction and incentive costs. Incentives, lot costs and building material prices move it, and it often leads earnings.
- Land and lot position: Number of lots owned or controlled for future building. A large pipeline supports growth but ties up capital, and land bought at high prices can later be impaired.
Primary Macro Drivers
- Mortgage rates and affordability: Buyers' monthly payments set demand, so mortgage rates and affordability drive net orders and the cancellation rate.
- Housing inventory: Limited existing homes for sale push buyers toward new builds, which supports orders and pricing power.
- Land and construction costs: Lot, material and labor costs set the cost basis for each home, so changes hit gross margin if prices cannot rise to match.
- Employment and household formation: Jobs and new households create buyers, so employment and household formation affect order volume and pace.
Major Risks
- Rate sensitivity: Higher borrowing costs reduce orders and require incentives such as rate buydowns, which lower gross margin.
- Cost inflation: Rapid rises in materials and labor can cut margin on homes already sold in backlog before they are built.
- Land impairments: If prices fall, land held may be written down, hurting results; watch impairment charges and the land and lot position.
- Cyclical downturns: Orders fall sharply in housing slumps while land commitments remain, straining cash and margins together.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | Medium |
| Regulatory Intensity | Medium |
| Industry Maturity | Mature |
| Geographic Importance | U.S. |
Homebuilders Filers in the SEC Record
9 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 1520, 1531. Their latest fiscal years end in 2025, and together they reported $119.6 billion of revenue. Median revenue growth over the prior year was -1.9%. Median net margin was 6.9%. Median total liabilities were 35% of total assets, and 9 of 9 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Horton D R Inc | $34.3 billion | -6.9% | n/a | 10.5% | FY 2025 |
| Lennar Corp | $34.2 billion | -3.5% | n/a | 6.1% | FY 2025 |
| Pultegroup Inc | $17.3 billion | -3.5% | n/a | 12.8% | FY 2025 |
| Toll Brothers, Inc. | $11.0 billion | 1.1% | 15.7% | 12.3% | FY 2025 |
| Nvr Inc | $10.3 billion | -1.9% | n/a | 13.0% | FY 2025 |
| Kb Home | $6.2 billion | -10.0% | n/a | 6.9% | FY 2025 |
| Hovnanian Enterprises Inc | $3.0 billion | -0.9% | n/a | 2.1% | FY 2025 |
| Beazer Homes Usa Inc | $2.4 billion | 1.8% | 1.5% | 1.9% | FY 2025 |
The 8 largest of 9 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Homebuilders guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Homebuilders industry?
Key performance indicators for the Homebuilders industry include: Net orders and cancellation rate, Backlog, Average selling price, Gross margin, Land and lot position. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Homebuilders industry?
The Homebuilders industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Homebuilders industry?
The primary risks for Homebuilders companies include: Rate sensitivity, Cost inflation, Land impairments, Cyclical downturns. Investors should assess each company's exposure to these factors and its track record of navigating them.