Homebuilder NVR posts lower quarterly profit, revenue amid affordability pressures

Net income fell 29% from a year ago to $236.5 million and on a per-share basis fell by 23% to $83.96.

Consolidated revenues for the quarter were down over 10% to $2.33 billion, while homebuilding revenues fell 11% to $2.28 billion.

U.S. homebuilders have been navigating rising costs due to persistent inflation as well as weakening consumer sentiment. The benchmark 30-year mortgage rate has hovered around 6.6% in recent months, far above the 4.3% average of the previous decade, and is unlikely to fall materially anytime soon. To stimulate demand, builders have been employing sales incentives such as mortgage rate buydowns, which in turn hurts their margins.

July 23 (Reuters) - NVR posted a fall in second-quarter profit and revenue as the U.S. homebuilder absorbed higher land costs and continued pricing pressure in a challenging housing market, sending its shares down over 6% in morning trade.

NVR said its gross profit margin was negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges and weak consumer sentiment, along with contract land deposit impairments totaling approximately $21.7 million.