$236.5 million in net income for the second quarter ended June 30, 2026 represents a 29% YoY decline for NVR, Inc. (NYSE: NVR), the Reston, Virginia-based homebuilder behind the Ryan Homes, NVHomes, and Heartland Homes brands. Diluted EPS of $83.96 compares to $108.54 a year ago, a 23% drop. The compression traces to the homebuilding segment, where gross margin fell 230 basis points to 19.2% from 21.5% on higher lot costs, affordability-driven price concessions, and $21.7 million in contract land deposit impairments.
Income anatomy
Homebuilding pretax income of $293.2 million plus mortgage banking pretax of $25.4 million equals consolidated pretax income of $318.6 million. The $82.2 million tax charge produces the reported $236.5 million net. The half-year picture is steeper: net income of $434.8 million for the six months ended June 30, 2026 fell 31% from $633.3 million, on revenues of $4.21 billion versus $5.00 billion, a 16% decline. Diluted EPS for the half was $151.38, down 26% from $203.20.
| Metric | Q2 2026 (reported) | Q2 2025 (reported) | YoY |
|---|---|---|---|
| Consolidated revenue | $2.33B | $2.60B | -10% |
| Homebuilding revenue | $2.28B | $2.55B | -11% |
| Net income | $236.5M | $333.7M | -29% |
| Diluted EPS | $83.96 | $108.54 | -23% |
| HB gross margin | 19.2% | 21.5% | -230 bps |
| HB pretax income | $293.2M | $417.5M | -30% |
| MB pretax income | $25.4M | $29.6M | -14% |
Physical flows: inventory builds as settlements thin
Settlements fell 8% to 5,058 units in Q2 2026 at an average price of $450,700, down 3% YoY. That unit count times the average price reconciles to the $2.28 billion in homebuilding revenues filed. On the balance sheet, inventory expanded to $2.24 billion at June 30, 2026 from $1.72 billion at December 31, 2025, with lots and housing units under customer sales agreements rising to $1.88 billion from $1.41 billion. Homebuilding cash ran from $1.88 billion to $1.09 billion over the same six months, a trajectory consistent with the inventory build.
The $21.7 million in contract land deposit impairments signals NVR forfeited deposits on specific option contracts where projected returns no longer cleared the hurdle. Contract land deposits net still rose to $927.4 million at June 30, 2026 from $851.5 million at year-end 2025, so the broader option pipeline continued expanding even as individual lots were shed.
Orders and backlog
New orders rose 9% to 5,885 units in Q2 2026. Average order price slipped 5% to $437,100. The cancellation rate tightened to 15% from 17% a year ago. Backlog at June 30, 2026 stood at 10,998 units, up 9% in unit terms, and $4.99 billion, up 5% in dollar terms. Unit growth outpacing the dollar increase means per-unit backlog value contracted YoY, in line with the pricing pressure the company cited throughout the quarter.
Mortgage banking
Closed loan production in the mortgage banking segment totaled $1.35 billion in Q2 2026, down 13% from the year-ago period. Mortgage banking fees of $46.6 million and interest income of $4.0 million offset $26.2 million in G&A. Pretax income settled at $25.4 million, down from $29.6 million in Q2 2025.