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What changed in NVR, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NVR, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+170 added−196 removedSource: 10-K (2026-02-11) vs 10-K (2025-02-12)

Top changes in NVR, Inc.'s 2025 10-K

170 paragraphs added · 196 removed · 152 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeTo date, restrictive zoning laws and the imposition of moratoriums have not had a material adverse effect on our construction activities. 2 Table of Contents Competition and Market Factors The housing industry is highly competitive. We compete with numerous homebuilders of varying size, ranging from local to national in scope, some of which have greater financial resources than we do.
Biggest changeCompetition and Market Factors The housing industry is highly competitive. We compete with numerous homebuilders of varying size, ranging from local to national in scope, some of which have greater financial resources than we do. We also compete with the home resale market.
Instead, we typically acquire finished building lots from various third party land developers pursuant to fixed price finished lot purchase agreements (“LPAs”) that require deposits that may be forfeited if we fail to perform under the LPAs.
Instead, we typically acquire finished building lots from various third-party land developers pursuant to fixed price lot purchase agreements (“LPAs”) that require deposits that may be forfeited if we fail to perform under the LPAs.
Forward-looking statements contained in this document include those regarding market trends, our financial position and financial results, business strategy, the outcome of pending litigation, investigations or similar contingencies, projected plans and objectives of management for future operations.
Forward-looking statements contained in this document include those regarding market trends, our financial position and financial results, business strategy, the outcome of pending litigation, investigations or similar contingencies, and projected plans and objectives of management for future operations.
All of our employees must adhere to our code of ethics and standards of business conduct that sets standards for appropriate behavior in the workplace. Our compensation philosophy has been consistent for 30 years and is designed to motivate and retain highly qualified and experienced employees.
All of our employees must adhere to our code of ethics and standards of business conduct that sets standards for appropriate behavior in the workplace. Our compensation philosophy has been consistent for over 30 years and is designed to motivate and retain highly qualified and experienced employees.
Ryan Homes operates in thirty-six metropolitan areas located in Maryland, Virginia, Washington, D.C., Delaware, West Virginia, Pennsylvania, Ohio, New York, New Jersey, Indiana, Illinois, North Carolina, South Carolina, Georgia, Florida, Tennessee and Kentucky. Our NVHomes and Heartland Homes products are marketed primarily to move-up and luxury buyers.
Ryan Homes operates in thirty-seven metropolitan areas located in Maryland, Virginia, Washington, D.C., Delaware, West Virginia, Pennsylvania, Ohio, New York, New Jersey, Indiana, Illinois, North Carolina, South Carolina, Georgia, Florida, Tennessee and Kentucky. Our NVHomes and Heartland Homes products are marketed primarily to move-up and luxury buyers.
Unless the context otherwise requires, references to “NVR”, “we”, “us” or “our” include NVR, Inc. and its consolidated subsidiaries. We are one of the largest homebuilders in the United States. We operate in thirty-six metropolitan areas in sixteen states, and Washington, D.C.
Unless the context otherwise requires, references to “NVR”, “we”, “us” or “our” include NVR, Inc. and its consolidated subsidiaries. We are one of the largest homebuilders in the United States. We operate in thirty-seven metropolitan areas in sixteen states, and Washington, D.C.
Other than those units that are cancelled, we expect to settle substantially all of our December 31, 2024 backlog during 2025. See “Risk Factors” in Item 1A and “Seasonality” in Item 7 of this Form 10-K.
Other than those units that are cancelled, we expect to settle substantially all of our December 31, 2025 backlog during 2026. See “Risk Factors” in Item 1A and “Seasonality” in Item 7 of this Form 10-K.
During the four quarters of each of 2024, 2023 and 2022, approximately 5% in 2024, 4% in 2023 and 4% in 2022 of a reporting quarter’s opening backlog cancelled during the quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur in future periods.
During the four quarters of each of 2025, 2024 and 2023, approximately 6%, 5% and 4% of a reporting quarter’s opening backlog, respectively, cancelled during the quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur in future periods.
Expressed as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 14%, 13% and 14% in 2024, 2023, and 2022, respectively.
Expressed as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 17%, 14% and 13% in 2025, 2024, and 2023, respectively.
Human Capital As of December 31, 2024, we had approximately 7,000 full time employees, of whom approximately 5,930 worked in our homebuilding operations, and approximately 1,070 worked in our mortgage banking operations, compared to December 31, 2023, when we had approximately 6,300 full time employees, of whom approximately 5,300 worked in our homebuilding operations, and approximately 1,000 worked in our mortgage banking operations.
Human Capital As of December 31, 2025, we had approximately 6,300 full time employees, of whom approximately 5,320 worked in our homebuilding operations, and approximately 980 worked in our mortgage banking operations, compared to December 31, 2024, when we had approximately 7,000 full time employees, of whom approximately 5,930 worked in our homebuilding operations, and approximately 1,070 worked in our mortgage banking operations.
North East: New Jersey and Eastern Pennsylvania Mid East: New York, Ohio, Western Pennsylvania, Indiana and Illinois South East: North Carolina, South Carolina, Tennessee, Florida, Georgia and Kentucky Backlog Backlog, which represents homes sold but not yet settled with the customer, totaled 9,953 units and approximately $4.8 billion as of December 31, 2024 compared to 10,229 units and approximately $4.8 billion as of December 31, 2023.
North East: New Jersey and Eastern Pennsylvania Mid East: New York, Ohio, Western Pennsylvania, Indiana and Illinois South East: North Carolina, South Carolina, Tennessee, Florida, Georgia and Kentucky Backlog Backlog, which represents homes sold but not yet settled with the customer, totaled 8,448 units and approximately $4.0 billion as of December 31, 2025 compared to 9,953 units and approximately $4.8 billion as of December 31, 2024.
Regulation We and our subcontractors must comply with various federal, state and local zoning, building, environmental, advertising and consumer credit statutes, rules and regulations, as well as other regulations and requirements in connection with our construction and sales activities.
Regulation We, in addition to our subcontractors, developers and vendors must comply with various federal, state and local zoning, building, environmental, advertising and consumer credit statutes, rules and regulations, as well as other regulations and requirements in connection with our construction and sales activities.
NVRM’s mortgage loans in process that had not closed had an aggregate principal balance of approximately $2.9 billion as of both December 31, 2024 and December 31, 2023. NVRM sells the mortgage loans it closes to investors in the secondary markets primarily on a servicing released basis, typically within 30 days from the loan closing.
NVRM’s mortgage loans in process that had not closed had an aggregate principal balance of approximately $2.1 billion as of December 31, 2025 compared to approximately $2.9 billion as of December 31, 2024. NVRM sells the mortgage loans it closes to investors in the secondary markets primarily on a servicing released basis, typically within 30 days from the loan closing.
The average price of homes in backlog increased to $481,400 as of December 31, 2024 from $465,000 as of December 31, 2023. Backlog may be impacted by customer cancellations for various reasons that are beyond our control, such as the customer’s failure to obtain mortgage financing, inability to sell an existing home, job loss or a variety of other reasons.
The average price of homes in backlog decreased to $474,400 as of December 31, 2025 from $481,400 as of December 31, 2024. Backlog may be impacted by customer cancellations for various reasons that are beyond our control, such as the customer’s failure to obtain mortgage financing, inability to sell an existing home, job loss or a variety of other reasons.
Once we acquire control of raw ground, we determine whether to sell the raw parcel to a developer and enter into an LPA with the developer to purchase the finished lots or hire a developer to develop the land on our behalf.
Once we acquire control of raw ground, we generally sell the raw parcel to a developer and enter into an LPA with the developer to purchase the finished lots or, on a limited basis, hire a developer to develop the land on our behalf.
The average price of homes settled was $450,700 in both 2024 and 2023. Markets Our four reportable homebuilding segments operate in the following geographic regions: Mid Atlantic: Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
The average price of homes settled was $460,600 and $450,700 in 2025 and 2024, respectively. Markets Our four reportable homebuilding segments operate in the following geographic regions: Mid Atlantic: Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
Our principal website can be found at www.nvrinc.com . We make available free of charge on or through our website, access to our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after such material is electronically filed, or furnished, to the SEC.
We make available free of charge on or through our website, access to our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after such material is electronically filed, or furnished, to the SEC.
Our homes combine traditional, transitional, cottage or urban exterior designs with contemporary interior designs and amenities, generally include two to four bedrooms and range from approximately 1,000 to 9,000 finished square feet. During 2024, the prices at which we settled homes ranged from approximately $190,000 to $2.3 million.
Our homes combine traditional, transitional, cottage or urban exterior designs with contemporary interior designs and amenities, generally include two to five bedrooms and range from approximately 900 to 7,000 finished square feet. During 2025, the prices at which we settled homes ranged from approximately $170,000 to $2.3 million.
Our focus is demonstrated by the tenure of our executives and our regional and division leaders. 3 Table of Contents Available Information We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). These filings are available to the public at the SEC’s website at www.sec.gov .
Our focus is demonstrated by the tenure of our executives and our regional and division leaders. Available Information We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”).
In addition, our homebuilding operations are regulated in certain areas by restrictive zoning and density requirements that limit the number of homes that can be built within the boundaries of a particular area.
In addition, our homebuilding operations are regulated in certain areas by restrictive zoning and density requirements that limit the number, design and size of homes that can be built within the boundaries of a particular area. To date, restrictive zoning laws and the imposition of moratoriums have not had a material adverse effect on our construction activities.
Additionally, we are dependent upon building material suppliers for a continuous flow of raw materials. Whenever possible, we utilize standard products available from multiple sources. In the past, such raw materials have been generally available to us in adequate supply, however, increased construction activity and demand for building materials could lead to supply chain disruptions.
Whenever possible, we utilize standard products available from multiple sources. In the past, such raw materials have been generally available to us in adequate supply, however, increased construction activity and demand for building materials could lead to supply chain disruptions. See “Risk Factors” in Item 1A of this Form 10-K for additional information regarding these risks.
The garages of these model homes are usually converted into temporary sales centers where alternative facades and floor plans are displayed and designs for other models are available for review. Sales representatives are compensated predominantly on a commission basis.
The garages of these model homes are usually converted into temporary sales centers. Sales representatives are compensated predominantly on a commission basis.
See “Risk Factors” in Item 1A of this Form 10-K for additional information regarding these risks. Mortgage Banking We provide a number of mortgage related services to our homebuilding customers through our mortgage banking operations. Our mortgage banking operations also include separate subsidiaries that broker title insurance and perform title searches for which they receive commissions and fees.
Mortgage Banking We provide a number of mortgage related services to our homebuilding customers through our mortgage banking operations. Our mortgage banking operations also include separate subsidiaries that broker title insurance and perform title searches for which they receive commissions and fees. Because NVRM originates mortgage loans exclusively for our homebuilding customers, NVRM is dependent on our homebuilding segment.
We also face competition from the home resale market. Our homebuilding operations compete primarily on the basis of price, location, design, quality, service and reputation. Historically, we have been one of the market leaders in each of the markets where we build homes.
Our 2 Table of Contents homebuilding operations compete primarily on the basis of price, location, design, quality, service and reputation. Historically, we have been one of the market leaders in each of the markets where we build homes. The housing industry is cyclical and is affected by consumer confidence levels, prevailing economic conditions and interest rates.
The housing industry is cyclical and is affected by consumer confidence levels, prevailing economic conditions and interest rates. Other factors that affect the housing industry and the demand for new homes include: the availability and the cost of land, labor and materials; changes in consumer preferences; demographic trends; and the availability of mortgage finance programs.
Other factors that affect the housing industry and the demand for new homes include: the availability and the cost of land, labor and materials; changes in consumer preferences; demographic trends; and the availability of mortgage finance programs. Additionally, we are dependent upon building material suppliers for a continuous flow of raw materials.
Because NVRM originates mortgage loans exclusively for our homebuilding customers, NVRM is dependent on our homebuilding segment. In 2024, NVRM closed approximately 17,300 loans with an aggregate principal amount of approximately $6.3 billion as compared to approximately 15,900 loans with an aggregate principal amount of approximately $5.7 billion in 2023.
In 2025, NVRM closed approximately 16,400 loans with an aggregate principal amount of approximately $6.0 billion as compared to approximately 17,300 loans with an aggregate principal amount of approximately $6.3 billion in 2024.
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These filings are available to the public at the SEC’s website at www.sec.gov . 3 Table of Contents Our principal website can be found at www.nvrinc.com .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe cost of insuring against construction defect and product liability claims, as well as the claims themselves, can be high. In addition, insurance companies limit coverage offered to protect against these claims. Further restrictions on coverage availability, or significant increases in premium costs or claims, could have a material adverse effect on our financial results.
Biggest changeThe cost of construction defect and product liability claims can be high.Significant increases in claims could have a material adverse effect on our financial results. We are subject to litigation proceedings that could harm our business if an unfavorable ruling were to occur.
All of these risks are discussed in detail below. Business and Industry Risks An economic downturn or decline in economic conditions could adversely affect our business and our results of operations. Demand for new homes is sensitive to economic changes driven by conditions such as employment levels, job growth, and consumer confidence.
All of these risks are discussed in detail below. Business and Industry Risks An economic downturn or decline in economic conditions could adversely affect our business and our results of operations. Demand for new homes is sensitive to economic changes driven by conditions such as employment levels, job and wage growth, and consumer confidence.
We are subject to various local, state and federal statutes, ordinances, rules and regulations concerning zoning, building design, construction and similar matters, including local regulations that impose restrictive zoning and density requirements in order to limit the number of homes that can be built within the boundaries of a particular area.
We are subject to various local, state and federal statutes, ordinances, rules and regulations concerning zoning, building design, construction and similar matters, including local regulations that impose restrictive zoning and density requirements in order to limit the size and number of homes that can be built within the boundaries of a particular area.
The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on our profitability, stock performance, ability to service our debt obligations and future cash flows. 5 Table of Contents We face competition in our homebuilding and mortgage banking operations. The homebuilding industry is highly competitive.
The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on our profitability, stock performance, ability to service our debt obligations and future cash flows. We face competition in our homebuilding and mortgage banking operations. The homebuilding industry is highly competitive.
Our mortgage banking operations may be responsible for losses associated with mortgage loans originated and sold to investors in the event of errors or omissions relating to certain representations and warranties that the loans sold meet certain requirements, including representations as to underwriting standards, the type of collateral, the existence of private mortgage insurance, and the validity of certain borrower representations in connection with the loan.
Our mortgage banking operations may be responsible for losses associated with mortgage loans originated and sold to investors in the event of errors or omissions relating to certain representations and warranties that the loans sold meet certain requirements, including representations as to underwriting standards, the type of collateral, the existence of private mortgage insurance, and the 6 Table of Contents validity of certain borrower representations in connection with the loan.
In the event that a substantial number of the loans that we have originated fall into 6 Table of Contents default and the investors to whom we sold the loans determine that we did not underwrite the loans in accordance with their requirements, we could be required to repurchase the loans from the investor or indemnify the investor for any losses incurred.
In the event that a substantial number of the loans that we have originated fall into default and the investors to whom we sold the loans determine that we did not underwrite the loans in accordance with their requirements, we could be required to repurchase the loans from the investor or indemnify the investor for any losses incurred.
Our homebuilding operations compete primarily on the basis of price, location, design, quality, service and reputation. The mortgage banking industry is also competitive. Our main competition comes from national, regional and local mortgage bankers, credit unions, banks and mortgage brokers in each of these markets.
Our homebuilding operations compete primarily on the basis of price, location, design, quality, service and reputation. 5 Table of Contents The mortgage banking industry is also competitive. Our main competition comes from national, regional and local mortgage bankers, credit unions, banks and mortgage brokers in each of these markets.
In addition, strong construction market conditions could restrict the labor force available to our subcontractors and us in one or more of our markets. We may also be adversely impacted by governmental policy initiatives which could impact housing demand or construction costs.
In addition, strong construction market conditions could restrict the labor force available to our subcontractors and us in one or more of our markets. We may also be adversely impacted by governmental policy initiatives which could impact labor availability or construction costs.
Over the long term, these disruptions could lower demand for our products, impair our ability to sell and/or build homes in our normal manner, increase our losses on contract land deposits, and negatively impact our lending and secondary mortgage market activities. These developments and other consequences of an outbreak could materially and adversely affect our operations, profitability and cash flows.
These disruptions could lower demand for our products, impair our ability to sell and/or build homes in our normal manner, increase our losses on contract land deposits, and negatively impact our lending and secondary mortgage market activities. These developments and other consequences of an outbreak could materially and adversely affect our operations, profitability and cash flows.
Tighter underwriting requirements and fee restrictions and the increasingly complex regulatory environment may negatively impact our mortgage loan origination business in the form of lower demand, decreased revenue and increased operating costs.
Tighter underwriting requirements and fee restrictions and the increasingly complex regulatory environment may negatively impact our mortgage loan origination business in the form of higher interest rates, lower demand, decreased revenue and increased operating costs.
Our mortgage banking operations are also dependent upon the securitization market for mortgage-backed securities, and could be materially adversely affected by any fluctuation or downturn in such market. 7 Table of Contents Our current indebtedness may impact our future operations. As of December 31, 2024 we had $900 million in senior notes outstanding.
Our mortgage banking operations are also dependent upon the securitization market for mortgage-backed securities, and could be materially adversely affected by any fluctuation or downturn in such market. Our current indebtedness may impact our future operations. As of December 31, 2025 we had $900 million in senior notes outstanding.
In recent years, an increasing number of state and federal regulations have been enacted or proposed to reduce the impact of greenhouse gas emissions and other human activities on climate change. Some of this legislation relates to matters such as restrictions and reporting on carbon dioxide emissions and higher building code energy efficiency standards.
In recent years, an increasing number of state and federal regulations have been enacted or proposed to reduce the impact of greenhouse gas emissions and other human activities on climate change. Some of these regulations relate to matters such as restrictions and reporting on carbon dioxide emissions and higher building code energy efficiency standards.
We engage subcontractors to perform the actual construction of our homes. Despite our quality control efforts, we may discover that our subcontractors have engaged in improper construction practices. The occurrence of such events could require us to repair the homes in accordance with our standards and as required by law.
We engage subcontractors to perform the actual construction of our homes. Despite our quality control efforts, we may discover that our subcontractors have engaged in improper construction practices. The occurrence of such events could require us to repair the homes in accordance with our standards and as required by law, and/or could adversely affect our reputation with customers.
We are also subject to potential volatility in the price of commodities that impact costs of materials used in our homebuilding business. Increases in 4 Table of Contents prevailing interest rates could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.
We are also subject to potential volatility in the price of commodities that impact costs of materials used in our homebuilding business. Increases in prevailing interest rates could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows. Our mortgage banking business is also affected by interest rate fluctuations.
Substantial losses by us or other action or inaction by us or our subsidiaries could result in the violation of one or more of these covenants, which could result in decreased liquidity or a default on our current or future indebtedness, thereby having a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.
Substantial losses by us or other action or inaction by us or our subsidiaries could result in the violation of one or more of these covenants, which could result in decreased liquidity or a default on our current or future indebtedness, thereby having a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows. 7 Table of Contents Regulatory Risks Government regulations and environmental matters could negatively affect our operations.
The recent COVID-19 pandemic had a significant impact on our operations and supply chains. 8 Table of Contents There is no guarantee that a future health epidemic will not occur, which could result in uncertainty regarding governmental actions that may occur, and the effects of economic relief efforts on the U.S. economy, either of which could be potential disruptors to our business.
There is no guarantee that a future health epidemic will not occur, which could result in uncertainty regarding governmental actions that may occur, and the effects of economic relief efforts on the U.S. economy, either of which could be potential disruptors to our business.
Our mortgage banking business is also affected by interest rate fluctuations. We also may experience secondary marketing losses resulting from daily movements in interest rates to the extent we are unable to match interest rates and amounts on loans we have committed to originate with forward commitments from third parties to purchase such loans.
We also may experience secondary marketing losses resulting from daily movements in interest rates to the extent we are unable to match interest rates and amounts on loans we 4 Table of Contents have committed to originate with forward commitments from third parties to purchase such loans.
As described in, but not limited to, Item 3, “Legal Proceedings” of this Form 10-K, we are currently subject to certain legal proceedings. Litigation is subject to inherent uncertainties, and unfavorable rulings may occur.
From time to time, we are involved in litigation and other legal proceedings relating to claims arising from our operations in the normal course of business. As described in, but not limited to, Item 3, “Legal Proceedings” of this Form 10-K, we are currently subject to certain legal proceedings. Litigation is subject to inherent uncertainties, and unfavorable rulings may occur.
Risks Related to Other External Risks Health epidemics, including the recent COVID-19 pandemic, have had, and could in the future have, an adverse impact on our business and operations, and the markets, states and local communities in which we operate.
Risks Related to Other External Risks Health epidemics could have an adverse impact on our business and operations, and the markets, states and local communities in which we operate. Our business and operations could be adversely affected by health epidemics, impacting the markets, states and local communities in which we operate.
The impact of such restrictions and requirements on us and our suppliers could increase our operating and compliance costs, as well as the cost of raw materials used in the building process.
The impact of such restrictions and requirements on us and our suppliers could increase our operating and compliance costs, as well as the cost of materials used in the building process. Higher operating costs could negatively impact our profitability. Increased regulation of the mortgage industry could harm our future sales and earnings.
In addition, severe weather conditions and natural disasters may increase the cost of homeowner's insurance or potentially reduce insurance availability which could negatively impact demand in certain of our markets perceived to be more vulnerable to increased severe weather events and other impacts of climate change.
These events may impact our physical facilities or those of our suppliers or subcontractors and our housing inventories, causing us material increases in costs, or delays in construction of homes. 8 Table of Contents In addition, severe weather conditions and natural disasters may increase the cost of homeowner's insurance or potentially reduce insurance availability which could negatively impact demand in certain of our markets perceived to be more vulnerable to increased severe weather events and other impacts of climate change.
In the event that disruptions to the secondary markets tighten or eliminate the available liquidity for mortgage loans in the secondary markets, or the underwriting requirements by our secondary market investors become more stringent, our ability to sell future mortgages could decline and we could be required, among other things, to fund our commitments to our buyers with our own financial resources, which are limited, or require our home buyers to find another source of financing.
In the event that disruptions to the secondary markets tighten or eliminate the available liquidity for mortgage loans in the secondary markets, or the underwriting requirements imposed by secondary market investors and federal agencies become more stringent, our ability to sell future mortgages could be adversely impacted.
Further, development and maintenance of these measures are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated.
Further, development and maintenance of these measures are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated. The rapid evolution and increased adoption of artificial intelligence technologies may also heighten our cybersecurity risks by making cyber-attacks more difficult to detect, contain, and mitigate.
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We are subject to litigation proceedings that could harm our business if an unfavorable ruling were to occur. From time to time, we are involved in litigation and other legal proceedings relating to claims arising from our operations in the normal course of business.
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In such circumstances, we could be required, among other things, to fund our commitments to our buyers with our own financial resources, which are limited, or require our home buyers to find another source of financing.
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Regulatory Risk Government regulations and environmental matters could negatively affect our operations.
Removed
Higher operating costs could result in us having to increase our home prices to a level that may adversely affect our sales or, if we are unable to increase prices, negatively impact our profitability. Increased regulation of the mortgage industry could harm our future sales and earnings.
Removed
Our business and operations could be adversely affected by health epidemics, impacting the markets, states and local communities in which we operate.
Removed
These events may impact our physical facilities or those of our suppliers or subcontractors and our housing inventories, causing us material increases in costs, or delays in construction of homes.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe currently do not believe that any current cybersecurity threats have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations or financial condition. Governance Our Audit Committee is required under its charter to periodically review our data privacy and information security programs.
Biggest changeGovernance Our Audit Committee is required under its charter to periodically review our data privacy and information security programs.
Significant information technology processes that have been implemented include: - vulnerability management to help ensure security updates are effectively applied, - utilization of encryption and multi-factor authentication technologies to protect company data, - regular required training for all employees with systems access regarding matters such as cybersecurity threats and data protection, and utilization of simulated phishing tests to increase security awareness, - regular review of third-party service providers, including review of their system and organization controls (SOC) reports, - enhanced monitoring capabilities for early detection and rapid response to potential security anomalies, - documented incident response readiness process updated annually, - completion of tabletop exercises on potential cybersecurity breaches with the assistance of a third-party cybersecurity consultant, and - regular review of information technology disaster recovery and business continuity processes to help ensure the ability to resume work after an incident.
Significant information technology processes that have been implemented include: - vulnerability management to help ensure security updates are effectively applied, - utilization of encryption and multi-factor authentication technologies to protect company data, - regular required training for all employees with systems access regarding matters such as cybersecurity threats and data protection, and utilization of simulated phishing tests to increase security awareness, - regular review of third-party service providers, including review of their system and organization controls (SOC) reports, - enhanced monitoring capabilities for early detection and rapid response to potential security incidents, - documented incident response readiness process updated annually, - completion of annual tabletop exercises on potential cybersecurity breaches with the assistance of a third-party cybersecurity consultant, and - annual review of information technology disaster recovery and business continuity processes to help ensure the ability to resume work after an incident.
Our CIO has over 35 years of experience and in his 20 years at NVR has been responsible for the implementation and modernization of many of our key technologies across the enterprise. Our CISO has over 25 years of experience in information technology architecture, including over 18 years with NVR in progressively more senior information security roles.
Our CIO has over 35 years of experience and in his 21 years at NVR has been responsible for the implementation and modernization of many of our key technologies across the enterprise. Our CISO has over 25 years of experience in information technology architecture, including over 20 years with NVR in progressively more senior information security roles.
Our Audit Committee assists our Board in oversight and monitoring of our cybersecurity processes, including systems to collect and store confidential information, ongoing initiatives, current threats and our response readiness to cybersecurity attacks. Our CIO and CISO communicate directly with members of the Audit Committee and Board of Directors on cybersecurity matters.
Our Audit Committee assists our Board in oversight and monitoring of our cybersecurity processes, including systems to collect and store confidential information, ongoing initiatives, current threats and our response readiness to cybersecurity attacks. 9 Table of Contents Our CIO and CISO communicate directly with members of the Audit Committee and Board of Directors on cybersecurity matters.
In 2024, our CIO and CISO presented updates on our cybersecurity initiatives quarterly; twice to our Audit Committee and twice to our full Board.
In 2025, our CIO and CISO presented updates on our cybersecurity initiatives quarterly; twice to our Audit Committee and twice to our full Board.
Results of these audits are reported to the Audit Committee by our Vice President of Internal Audit and Corporate Governance. 9 Table of Contents As previously discussed in Item 1A of this Form 10-K "Risk Factors", failure to maintain the security of the data we are required to protect could have a material adverse effect on our operations and financial results.
As previously discussed in Item 1A of this Form 10-K "Risk Factors", failure to maintain the security of the data we are required to protect could have a material adverse effect on our operations and financial results.
Review of these processes has been incorporated into our annual risk assessment and internal audits of controls performed by our Internal Audit department.
Review of these processes has been incorporated into our annual risk assessment and internal audits of controls performed by our Internal Audit department. Results of these audits are reported to the Audit Committee by our Vice President of Internal Audit and Corporate Governance.
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As of the date of this Form 10-K, we have not had any known instances of material cybersecurity incidents, including third-party incidents, during any of the prior three fiscal years that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Lavonia facility is approximately 170,000 square feet with a lease term of 15 years, and contains an option for four, five-year extensions. In 2024 we entered into an agreement to lease a new facility in Haines City, FL which is expected to commence at the end of 2025.
Biggest changeThe lease is expected to commence September 2026 and is for approximately 68,000 square feet of office space with a lease term of 11 years.
In connection with both our homebuilding and mortgage banking businesses, we also lease office space in multiple locations for homebuilding divisional offices and mortgage banking and title services branches under leases expiring at various times through 2030, none of which are individually material to our business.
In connection with both our homebuilding and mortgage banking businesses, we also lease office space in multiple locations for homebuilding divisional offices and mortgage banking and title services branches under leases expiring at various times through 2033, none of which are individually material to our business.
In connection with the operation of the homebuilding business, we lease production facilities in the following nine locations: Thurmont, Maryland; Burlington County, New Jersey; Farmington, New York; Kings Mountain, North Carolina; Darlington, Pennsylvania; Portland, Tennessee; Richmond, Virginia; Fayetteville, North Carolina and Lavonia, Georgia.
In connection with the operation of the homebuilding business, we lease production facilities in the following ten locations: Thurmont, Maryland; Burlington County, New Jersey; Farmington, New York; Kings Mountain, North Carolina; Darlington, Pennsylvania; Portland, Tennessee; Richmond, Virginia; Fayetteville, North Carolina, Lavonia, Georgia and Haines City, Florida.
Item 2. Properties. Our corporate offices are located in Reston, Virginia, where we currently lease approximately 61,000 square feet of office space. The current corporate office lease expires in April 2026.
Item 2. Properties. Our corporate offices are located in Reston, Virginia, where we currently lease approximately 61,000 square feet of office space. In 2025, we entered into a lease agreement for office space in Reston, Virginia to replace our current corporate office lease which expires in October 2026.
We anticipate that, upon expiration of existing production facility and office leases, we will be able to renew them or obtain comparable facilities on terms acceptable to us.
In addition, we own a production facility of approximately 100,000 square feet in Dayton, Ohio. Our plant utilization was 45% and 49% of total capacity in 2025 and 2024, respectively. We anticipate that, upon expiration of existing production facility and office leases, we will be able to renew them or obtain comparable facilities on terms acceptable to us.
Removed
The leases on the production facilities in Fayetteville, North Carolina and Lavonia, Georgia commenced in 2024. The Fayetteville facility is approximately 145,000 square feet with a lease term of 10 years, contains an option for three, five-year extensions.
Removed
The Haines City facility will be approximately 174,000 square feet with a lease term of 15 years from the commencement date and contains an option for five, five-year extensions. In addition, we own a production facility of approximately 100,000 square feet in Dayton, Ohio. Our plant utilization was 49% and 56% of total capacity in 2024 and 2023, respectively.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information regarding common stock repurchases during the quarter ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1 - 31, 2024 3,275 $ 9,471.88 3,275 $ 651,486 November 1 - 30, 2024 18,731 $ 9,067.83 18,731 $ 481,637 December 1 - 31, 2024 42,210 $ 8,610.39 42,210 $ 868,192 Total 64,216 $ 8,787.75 64,216 The information required by this item with respect to securities authorized for issuance under equity compensation plans is provided under Item 12 of this Form 10-K. 11 Table of Contents STOCK PERFORMANCE GRAPH The following graph compares the cumulative total return to holders of our common stock since December 31, 2019 with the Dow Jones US Home Construction Index and the S&P 500 Index for that same period, assuming that $100 was invested in NVR stock and the indices on December 31, 2019. .
Biggest changeThe information required by this item with respect to securities authorized for issuance under equity compensation plans is provided under Item 12 of this Form 10-K. 11 Table of Contents STOCK PERFORMANCE GRAPH The following graph compares the cumulative total return to holders of our common stock since December 31, 2020 with the Dow Jones US Home Construction Index and the S&P 500 Index for that same period, assuming that $100 was invested in NVR stock and the indices on December 31, 2020. .
We have never paid a cash dividend on our shares of common stock and have no current intention to do so in the future. During the quarter ended December 31, 2024, we had two share repurchase authorizations outstanding.
We have never paid a cash dividend on our shares of common stock and have no current intention to do so in the future. During the quarter ended December 31, 2025, we had two share repurchase authorizations outstanding.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our shares of common stock are listed and principally traded on the New York Stock Exchange under the trading symbol “NVR.” As of the close of business on February 10, 2025, there were 151 shareholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our shares of common stock are listed and principally traded on the New York Stock Exchange under the trading symbol “NVR.” As of the close of business on February 9, 2026, there were 142 shareholders of record of our common stock.
On May 7, 2024 and December 11, 2024, we publicly announced that our Board of Directors had approved new repurchase authorizations in the amount of up to $750 million per authorization. Each share repurchase authorization authorized the repurchase of our outstanding common stock in one or more open market and/or privately negotiated transactions, with no expiration date.
On May 6, 2025 and August 8, 2025, we publicly announced that our Board of Directors had approved new repurchase authorizations in the amount of up to $750 million per authorization. Each share repurchase authorization authorized the repurchase of our outstanding common stock in one or more open market and/or privately negotiated transactions, with no expiration date.
For the Year Ended December 31, Comparison of 5 Year Cumulative Total Return 2019 2020 2021 2022 2023 2024 NVR, Inc. $ 100 $ 107 $ 155 $ 121 $ 184 $ 215 S&P 500 $ 100 $ 118 $ 152 $ 125 $ 158 $ 197 Dow Jones US Home Construction $ 100 $ 124 $ 188 $ 147 $ 264 $ 264
For the Year Ended December 31, Comparison of 5 Year Cumulative Total Return 2020 2021 2022 2023 2024 2025 NVR, Inc. $ 100 $ 145 $ 113 $ 172 $ 200 $ 179 S&P 500 $ 100 $ 129 $ 105 $ 133 $ 166 $ 196 Dow Jones US Home Construction $ 100 $ 152 $ 119 $ 214 $ 213 $ 215
Added
The following table provides information regarding common stock repurchases during the quarter ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1 - 31, 2025 22,507 $ 7,781.09 22,507 $ 861,851 November 1 - 30, 2025 (1) 17,634 $ 7,226.98 17,634 $ 734,411 December 1 - 31, 2025 24,763 $ 7,463.30 24,763 $ 549,597 Total 64,904 $ 7,509.29 64,904 (1) Of the shares repurchased in November 2025, 15,484 shares were repurchased under the May 6, 2025 share repurchase authorization, which fully utilized the May authorization.
Added
The remaining 2,150 shares were repurchased under the August 8, 2025 share repurchase authorization. On February 11, 2026, the Board of Directors approved an additional repurchase authorization of up to an aggregate $750 million with terms and conditions consistent with our prior authorizations. The repurchase authorization does not have an expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe net contract land deposit balances below also include approximately $8,700 and $7,700 as of December 31, 2024 and 2023, respectively, of letters of credit issued as deposits in lieu of cash. 15 Table of Contents The following tables summarize certain homebuilding operating activity by reportable segment for each of the last three years: Selected Segment Financial Data: Year Ended December 31, 2024 2023 2022 Revenues: Mid Atlantic $ 4,423,768 $ 4,189,957 $ 4,766,329 North East 1,165,873 948,289 892,543 Mid East 1,861,735 1,723,514 2,147,262 South East 2,841,049 2,452,845 2,520,636 Year Ended December 31, 2024 2023 2022 Gross profit margin: Mid Atlantic $ 1,105,469 $ 1,023,993 $ 1,280,596 North East 303,650 243,634 226,666 Mid East 414,449 372,671 476,659 South East 634,847 629,843 751,734 Year Ended December 31, 2024 2023 2022 Gross profit margin percentage: Mid Atlantic 25.0 % 24.4 % 26.9 % North East 26.0 % 25.7 % 25.4 % Mid East 22.3 % 21.6 % 22.2 % South East 22.3 % 25.7 % 29.8 % Year Ended December 31, 2024 2023 2022 Segment profit: Mid Atlantic $ 816,255 $ 745,323 $ 994,027 North East 217,225 169,012 157,333 Mid East 290,834 257,865 343,236 South East 388,158 440,538 577,030 Segment Operating Activity: Year Ended December 31, 2024 2023 2022 Units Average Price Units Average Price Units Average Price New orders, net of cancellations: Mid Atlantic 8,511 $ 527.3 8,434 $ 515.5 7,816 $ 526.6 North East 1,994 $ 622.4 1,879 $ 573.2 1,679 $ 528.3 Mid East 4,654 $ 408.0 4,514 $ 396.5 4,344 $ 400.5 South East 7,401 $ 364.6 6,902 $ 366.4 5,325 $ 399.4 Total 22,560 $ 457.7 21,729 $ 448.4 19,164 $ 462.8 16 Table of Contents Year Ended December 31, 2024 2023 2022 Units Average Price Units Average Price Units Average Price Settlements: Mid Atlantic 8,537 $ 518.1 8,032 $ 521.5 9,042 $ 527.1 North East 1,967 $ 592.6 1,736 $ 546.2 1,763 $ 506.3 Mid East 4,585 $ 406.0 4,391 $ 392.4 5,518 $ 389.1 South East 7,747 $ 366.7 6,503 $ 377.2 6,409 $ 393.3 Total 22,836 $ 450.7 20,662 $ 450.7 22,732 $ 454.3 Year Ended December 31, 2024 2023 2022 Units Average Price Units Average Price Units Average Price Backlog: Mid Atlantic 4,068 $ 541.6 4,094 $ 522.5 3,692 $ 536.3 North East 1,055 $ 658.1 1,028 $ 602.0 885 $ 553.9 Mid East 2,045 $ 416.5 1,976 $ 412.1 1,853 $ 403.2 South East 2,785 $ 374.3 3,131 $ 378.4 2,732 $ 405.7 Total 9,953 $ 481.4 10,229 $ 465.0 9,162 $ 472.2 Operating Data: Year Ended December 31, 2024 2023 2022 New order cancellation rate: Mid Atlantic 13.4 % 12.8 % 14.4 % North East 14.4 % 11.9 % 12.2 % Mid East 15.5 % 13.9 % 16.4 % South East 14.4 % 12.3 % 12.6 % Year Ended December 31, 2024 2023 2022 Average active communities: Mid Atlantic 147 166 160 North East 31 36 36 Mid East 101 110 126 South East 148 115 93 Total 427 427 415 Homebuilding Inventory: As of December 31, 2024 2023 Sold inventory: Mid Atlantic $ 845,686 $ 796,591 North East 229,152 220,511 Mid East 276,459 268,269 South East 402,967 412,873 Total (1) $ 1,754,264 $ 1,698,244 17 Table of Contents As of December 31, 2024 2023 Unsold lots and housing units inventory: Mid Atlantic $ 100,897 $ 116,165 North East 17,198 18,804 Mid East 23,091 20,559 South East 99,369 60,953 Total (1) $ 240,555 $ 216,481 (1) Total segment inventory differs from consolidated inventory due to certain consolidation adjustments necessary to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes.
Biggest changeThe net contract land deposit balances below also include approximately $4,600 and $8,700 as of December 31, 2025 and 2024, respectively, of letters of credit issued as deposits in lieu of cash. 15 Table of Contents The following tables summarize certain homebuilding operating activity by reportable segment for each of the last three years: Selected Segment Financial Data: Year Ended December 31, 2025 2024 2023 Revenues: Mid Atlantic $ 4,372,010 $ 4,423,768 $ 4,189,957 North East 1,202,411 1,165,873 948,289 Mid East 1,875,046 1,861,735 1,723,514 South East 2,644,802 2,841,049 2,452,845 Year Ended December 31, 2025 2024 2023 Gross profit margin: Mid Atlantic $ 1,019,462 $ 1,105,469 $ 1,023,993 North East 306,742 303,650 243,634 Mid East 395,999 414,449 372,671 South East 484,499 634,847 629,843 Year Ended December 31, 2025 2024 2023 Gross profit margin percentage: Mid Atlantic 23.3 % 25.0 % 24.4 % North East 25.5 % 26.0 % 25.7 % Mid East 21.1 % 22.3 % 21.6 % South East 18.3 % 22.3 % 25.7 % Year Ended December 31, 2025 2024 2023 Segment profit: Mid Atlantic $ 722,599 $ 816,255 $ 745,323 North East 213,546 217,225 169,012 Mid East 266,990 290,834 257,865 South East 202,011 388,158 440,538 Segment Operating Activity: Year Ended December 31, 2025 2024 2023 Units Average Price Units Average Price Units Average Price New orders, net of cancellations: Mid Atlantic 7,379 $ 520.0 8,511 $ 527.3 8,434 $ 515.5 North East 1,778 $ 638.3 1,994 $ 622.4 1,879 $ 573.2 Mid East 4,066 $ 426.5 4,654 $ 408.0 4,514 $ 396.5 South East 7,187 $ 362.5 7,401 $ 364.6 6,902 $ 366.4 Total 20,410 $ 456.2 22,560 $ 457.7 21,729 $ 448.4 16 Table of Contents Year Ended December 31, 2025 2024 2023 Units Average Price Units Average Price Units Average Price Settlements: Mid Atlantic 8,287 $ 527.6 8,537 $ 518.1 8,032 $ 521.5 North East 1,860 $ 646.5 1,967 $ 592.6 1,736 $ 546.2 Mid East 4,478 $ 418.7 4,585 $ 406.0 4,391 $ 392.4 South East 7,290 $ 362.8 7,747 $ 366.7 6,503 $ 377.2 Total 21,915 $ 460.6 22,836 $ 450.7 20,662 $ 450.7 Year Ended December 31, 2025 2024 2023 Units Average Price Units Average Price Units Average Price Backlog: Mid Atlantic 3,160 $ 527.8 4,068 $ 541.6 4,094 $ 522.5 North East 973 $ 644.0 1,055 $ 658.1 1,028 $ 602.0 Mid East 1,633 $ 435.2 2,045 $ 416.5 1,976 $ 412.1 South East 2,682 $ 373.9 2,785 $ 374.3 3,131 $ 378.4 Total 8,448 $ 474.4 9,953 $ 481.4 10,229 $ 465.0 Operating Data: Year Ended December 31, 2025 2024 2023 New order cancellation rate: Mid Atlantic 16.8 % 13.4 % 12.8 % North East 15.7 % 14.4 % 11.9 % Mid East 16.6 % 15.5 % 13.9 % South East 17.6 % 14.4 % 12.3 % Year Ended December 31, 2025 2024 2023 Average active communities: Mid Atlantic 125 147 166 North East 30 31 36 Mid East 96 101 110 South East 181 148 115 Total 432 427 427 Homebuilding Inventory: As of December 31, 2025 2024 Sold inventory: Mid Atlantic $ 595,369 $ 845,686 North East 220,684 229,152 Mid East 219,389 276,459 South East 386,759 402,967 Total (1) $ 1,422,201 $ 1,754,264 17 Table of Contents As of December 31, 2025 2024 Unsold lots and housing units inventory: Mid Atlantic $ 90,988 $ 100,897 North East 24,423 17,198 Mid East 29,253 23,091 South East 108,812 99,369 Total (1) $ 253,476 $ 240,555 (1) Total segment inventory differs from consolidated inventory due to certain consolidation adjustments necessary to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes.
The corporate capital allocation charged to the operating segment allows the Chief Operating Decision Maker to determine whether the operating segment is providing the desired rate of return after covering our cost of capital. We record impairment charges on contract land deposits when we determine that it is probable that recovery of the deposit is impaired.
The corporate capital allocation charged to the operating segment allows the Chief Operating Decision Maker to determine whether the operating segment is providing the desired rate of return after covering our cost of capital. We record charges on contract land deposits when we determine that it is probable that recovery of the deposit is impaired.
Although we consider the allowance for losses on contract land deposits reflected on the December 31, 2024 consolidated balance sheet to be adequate (see Note 1 to the accompanying consolidated financial statements included herein), there can be no assurance that this allowance will prove to be adequate over time to cover losses due to unanticipated adverse changes in the economy or other events adversely affecting specific markets or the homebuilding industry.
Although we consider the allowance for losses on contract land deposits reflected on the December 31, 2025 consolidated balance sheet to be adequate (see Note 1 to the accompanying consolidated financial statements included herein), there can be no assurance that this allowance will prove to be adequate over time to cover losses due to unanticipated adverse changes in the economy or other events adversely affecting specific markets or the homebuilding industry.
Although we believe that the compensation costs recognized in 2024 are representative of the cumulative ratable amortization of the grant-date fair value of unvested Options and RSUs outstanding, changes to the estimated input values such as expected term and expected volatility and changes to the determination of whether performance condition grants will vest, could produce widely different expense valuations and recognition.
Although we believe that the compensation costs recognized in 2025 are representative of the cumulative ratable amortization of the grant-date fair value of unvested Options and RSUs outstanding, changes to the estimated input values such as expected term and expected volatility and changes to the determination of whether performance condition grants will vest, could produce widely different expense valuations and recognition.
See Note 12 of this Form 10-K for additional discussion of our leases. 22 Table of Contents In addition to funding growth in our homebuilding and mortgage banking operations, we historically have used a substantial portion of our excess liquidity to repurchase outstanding shares of our common stock in open market and privately negotiated transactions.
See Note 11 of this Form 10-K for additional discussion of our leases. 22 Table of Contents In addition to funding growth in our homebuilding and mortgage banking operations, we historically have used a substantial portion of our excess liquidity to repurchase outstanding shares of our common stock in open market and privately negotiated transactions.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Homebuilding Segment Reconciliations to Consolidated Homebuilding Operations In addition to the corporate capital allocation and contract land deposit impairments discussed above, the other reconciling items between homebuilding segment profit and homebuilding consolidated profit before tax include unallocated corporate overhead (which includes all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense.
Homebuilding Segment Reconciliations to Consolidated Homebuilding Operations In addition to the corporate capital allocation and contract land deposit impairments discussed in Reportable Homebuilding Segments above, the other reconciling items between homebuilding segment profit and homebuilding consolidated profit before tax include unallocated corporate overhead (which includes all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense.
This ongoing repurchase program assists us in accomplishing our primary objective, creating increases in shareholder value. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Item 5 of this Form 10-K for disclosure of amounts repurchased during the fourth quarter of 2024.
This ongoing repurchase program assists us in accomplishing our primary objective, creating increases in shareholder value. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Item 5 of this Form 10-K for disclosure of amounts repurchased during the fourth quarter of 2025.
Our material contractual obligations primarily consist of the following: (i) Payments due to service our debt and interest on that debt. Our current outstanding Senior Notes total $900,000 and mature in May 2030. Future interest payments on our current outstanding Senior Notes total approximately $145,050, with $27,000 due within the next twelve months.
Our material contractual obligations primarily consist of the following: (i) Payments due to service our debt and interest on that debt. Our current outstanding Senior Notes total $900,000 and mature in May 2030. Future interest payments on our current outstanding Senior Notes total approximately $118,050, with $27,000 due within the next twelve months.
Additional cash was used to fund the increase in inventory of $108,557 attributable to an increase in units under construction year over year. Net cash used in investing activities in 2024 was $26,553. Cash was used primarily for purchases of property, plant and equipment of $29,212. Net cash used by financing activities in 2024 was $1,898,686.
Additionally, cash was used to fund the increase in inventory of $108,557 attributable to an increase in units under construction year over year. Net cash used in investing activities in 2024 was $26,553. Cash was used primarily for purchases of property, plant and equipment of $29,212. Net cash used by financing activities in 2024 was $1,898,686.
In limited specific strategic circumstances, we deviate from our historical lot acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for development.
In certain specific strategic circumstances, we deviate from our historical lot acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for development.
Although we consider the warranty and product liability accrual reflected on the December 31, 2024 consolidated balance sheet to be adequate (see Note 13 to the accompanying consolidated financial statements included herein), there can be no assurance that this accrual will prove to be adequate over time to cover losses due to increased costs for material and labor, the inability or refusal of manufacturers or subcontractors to financially participate in corrective action, unanticipated adverse legal settlements, or other unanticipated changes to the assumptions used to estimate the warranty and product liability accrual.
Although we consider the warranty and product liability accrual reflected on the December 31, 2025 consolidated balance sheet to be adequate (see Note 12 to the accompanying consolidated financial statements included herein), there can be no assurance that this accrual will prove to be adequate over time to cover losses due to increased costs for material and labor, the inability or refusal of manufacturers or subcontractors to financially participate in corrective action, unanticipated adverse legal settlements, or other unanticipated changes to the assumptions used to estimate the warranty and product liability accrual.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (dollars in thousands, except per share data) Results of Operations This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (dollars in thousands, except per share data) Results of Operations This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
For presentation purposes below, the contract land deposit impairment allowance as of December 31, 2024 and 2023 has been allocated to the reportable segments for the respective years to show contract land deposits on a net basis.
For presentation purposes below, the contract land deposit impairment allowance as of December 31, 2025 and 2024 has been allocated to the reportable segments for the respective years to show contract land deposits on a net basis.
Once we acquire control of raw ground, we determine whether to sell the raw parcel to a developer and enter into an LPA with the developer to purchase the finished lots or to hire a developer to develop the land on our behalf.
Once we acquire raw ground, we determine whether to sell the raw parcel to a developer and enter into an LPA with the developer to purchase the finished lots or to hire a developer to develop the land on our behalf.
Liability estimates are determined based on our judgment considering such factors as historical experience, the likely current cost of corrective action, manufacturers’ and 24 Table of Contents subcontractors’ participation in sharing the cost of corrective action, consultations with third party experts such as engineers, and discussions with our General Counsel and outside counsel retained to handle specific product liability cases.
Liability estimates are determined based on our judgment considering such factors as historical experience, the likely current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, consultations with third-party experts such as engineers, and discussions with our General Counsel and outside counsel retained to handle specific product liability cases.
Business Our primary business is the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are primarily constructed on a pre-sold basis. To fully serve customers of our homebuilding operations, we also operate a mortgage banking and title services business. We primarily conduct our operations in mature markets.
Business Our primary business is the construction and sale of single-family detached homes, townhomes and condominiums, all of which are primarily constructed on a pre-sold basis. To fully serve customers of our homebuilding operations, we also operate a mortgage banking and title services business. We primarily conduct our operations in mature markets.
In any period, a portion of the cancellations that we experience are related to new sales that occurred during the same period, and a portion are related to sales that occurred in prior periods and therefore appeared in the beginning backlog for the current period.
In any period, a portion of the cancellations that we experience are related to new sales that occurred during the same period, and a portion are related to sales that occurred in prior periods and therefore appeared in the opening backlog for the current period.
See Notes 3, 4 and 5 to the consolidated financial statements included herein for additional information regarding LPAs, JVs and land under development, respectively. Raw Land Purchase Agreements In addition to the lots we currently control as discussed above, we have certain properties under contract with land owners that are expected to yield approximately 35,900 lots.
See Notes 3, 4 and 5 to the consolidated financial statements included herein for additional information regarding LPAs, JVs and land under development, respectively. Raw Land Purchase Agreements In addition to the lots we currently control as discussed above, we have certain properties under contract with land owners that are expected to yield approximately 38,200 lots.
(ii) Payment obligations totaling approximately $584,500 under existing LPAs for deposits to be paid to land developers, assuming that contractual development milestones are met by the developers and we exercise our option to acquire finished lots under those LPAs. We expect to make the majority of these payments within the next three years.
(ii) Payment obligations totaling approximately $733,900 under existing LPAs for deposits to be paid to land developers, assuming that contractual development milestones are met by the developers and we exercise our option to acquire finished lots under those LPAs. We expect to make the majority of these payments within the next three years.
We maintain a reserve for losses on mortgage loans originated that reflects our judgment of the present loss exposure from the loans that we have originated and sold. As of December 31, 2024 and 2023, we had repurchase reserves of approximately $18,700 and $18,600, respectively. NVRM is dependent on our homebuilding operation’s customers for business.
We maintain a reserve for losses on mortgage loans originated that reflects our judgment of the present loss exposure from the loans that we have originated and sold. As of December 31, 2025 and 2024, we had repurchase reserves of approximately $18,900 and $18,700, respectively. NVRM is dependent on our homebuilding operation’s customers for business.
Capital Resources Senior Notes As of December 31, 2024, we had a total of $900,000 in outstanding Senior Notes which mature in May 2030.
Capital Resources Senior Notes As of December 31, 2025, we had a total of $900,000 in outstanding Senior Notes which mature in May 2030.
Other than those units that are cancelled, we expect to settle substantially all of our December 31, 2024 backlog during 2025. See “Risk Factors” in Item 1A of this Form 10-K.
Other than units that are cancelled, we expect to settle substantially all of our December 31, 2025 backlog during 2026. See “Risk Factors” in Item 1A of this Form 10-K.
During the four quarters of each of 2024, 2023 and 2022, approximately 5% in 2024, 4% in 2023 and 4% in 2022, of a reporting quarter’s opening backlog cancelled during the quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur in future years.
During the four quarters of each of 2025, 2024, and 2023, approximately 6%, 5% and 4% of a reporting quarter’s opening backlog, respectively, cancelled during the quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur in future years.
Calculated as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 14%, 13% and 14% in 2024, 2023, and 2022, respectively.
Our cancellation rate was approximately 17%, 14% and 13% in 2025, 2024, and 2023, respectively, calculated as the total of all cancellations during the period as a percentage of gross sales during the same period.
The increase in the effective tax rate is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled approximately $95,100 and $153,600 for 2024 and 2023, respectively.
The increase in the effective tax rate is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled approximately $28,300 and $95,100 for 2025 and 2024, respectively.
Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to 20 Table of Contents homes not yet settled are reversed through the consolidation adjustment and recorded in inventory. These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled.
Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to homes not yet settled are reversed through the consolidation adjustment and recorded in inventory.
We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible. Key Financial Results Our consolidated revenues for the year ended December 31, 2024 totaled $10,524,479, an increase of 11% from $9,518,202 in 2023.
We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible. Key Financial Results Our consolidated revenues for the year ended December 31, 2025 totaled $10,323,959, a decrease of 2% from $10,524,479 in 2024.
Impact of Inflation, Changing Prices and Economic Conditions See “Risk Factors” included in Item 1A of this Form 10-K for a description of the impact of inflation, changing prices and economic conditions on our business and our financial results.
Impact of Inflation, Changing Prices and Economic Conditions See “Risk Factors” included in Item 1A of this Form 10-K for a description of the impact of inflation, changing prices and economic conditions on our business and our financial results. See also the discussion of the current business environment in the Business Environment and Current Outlook section above.
Some of these properties may require rezoning or other approvals to achieve the expected yield. These properties are controlled with cash deposits totaling approximately $20,400 as of December 31, 2024, of which approximately $8,400 is refundable if we do not perform under the contract.
Some of these properties may require rezoning or other approvals to achieve the expected yield. These properties are controlled with cash deposits totaling approximately $42,300 as of December 31, 2025, of which approximately $9,000 is refundable if we do not perform under the contract.
Net cash provided by operating activities was $1,374,462, due primarily to cash provided by earnings in 2024. Cash was primarily used to fund the increase in contract land deposits of $157,291 attributable to an increase in the number of lots under control as of December 31, 2024 compared to December 31, 2023, and net mortgage loan activity of $105,790.
Cash was primarily used to fund the increase in contract land deposits of $157,291 attributable to an increase in the number of lots under control as of December 31, 2024 compared to December 31, 2023, and net mortgage loan activity of $105,790.
To the extent we underwrite our originated loans to the standards and specifications of the ultimate investor, we have no further financial obligations from the issuance of loans, except in certain limited instances where repurchases or early payment defaults occur.
Mortgage Banking – Other We sell all of the loans we originate into the secondary mortgage market. To the extent we underwrite our originated loans to the standards and specifications of the ultimate investor, we have no further financial obligations from the issuance of loans, except in certain limited instances where repurchases or early payment defaults occur.
We expect, however, to continue to acquire substantially all of our finished lot inventory using LPAs with forfeitable deposits. 13 Table of Contents As of December 31, 2024, we controlled approximately 162,400 lots as discussed below.
We expect, however, to continue to acquire substantially all of our finished lot inventory using LPAs with forfeitable deposits. 13 Table of Contents As of December 31, 2025, we controlled approximately 180,100 lots as described below.
As of December 31, 2024, we had a strong liquidity position with approximately $2,500,000 in cash and cash equivalents, approximately $285,000 in unused committed capacity under our revolving credit facility and $150,000 in unused committed capacity under our revolving mortgage repurchase facility.
As of December 31, 2025, we had a strong liquidity position with approximately $1,800,000 in cash and cash equivalents, approximately $290,000 in unused committed capacity under our revolving credit facility and $150,000 in unused committed capacity under our revolving mortgage repurchase facility.
Homebuilding Inventory The carrying value of inventory is stated at the lower of cost or market value. Cost of lots and completed and uncompleted housing units represent the accumulated actual cost of the units. Field construction supervisors’ salaries and related direct overhead expenses are included in inventory costs.
Actual results could differ materially from those estimates made by management. Homebuilding Inventory The carrying value of inventory is stated at the lower of cost or market value. Cost of lots and completed and uncompleted housing units represent the accumulated actual cost of the units. Field construction supervisors’ salaries and related direct overhead expenses are included in inventory costs.
The corporate capital allocation charge is based on the segment’s monthly average asset balance and is as follows for the years presented: Year Ended December 31, 2024 2023 2022 Corporate capital allocation charge: Mid Atlantic $ (139,780) $ (135,618) $ (143,251) North East (40,614) (33,269) (30,623) Mid East (43,989) (39,005) (51,376) South East (106,514) (80,913) (77,654) Total corporate capital allocation charge (330,897) (288,805) (302,904) (4) The consolidation adjustments and other in each period are primarily attributable to changes in units under construction year over year, and any significant changes in material costs, primarily lumber.
The corporate capital allocation charge is based on the segment’s monthly average asset balance and was as follows for the years presented: Year Ended December 31, 2025 2024 2023 Corporate capital allocation charge: Mid Atlantic $ 149,923 $ 139,780 $ 135,618 North East 46,106 40,614 33,269 Mid East 47,708 43,989 39,005 South East 124,961 106,514 80,913 Total corporate capital allocation charge 368,698 330,897 288,805 (4) The consolidation adjustments and other in each period are primarily attributable to changes in units under construction year over year, and any significant changes in material costs, primarily lumber.
We continually evaluate the estimates we use to prepare the consolidated financial statements and update those estimates as necessary. In general, our estimates are based on historical experience, on information from third party professionals, and other various assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ materially from those estimates made by management.
We continually evaluate the estimates we use to prepare 23 Table of Contents the consolidated financial statements and update those estimates as necessary. In general, our estimates are based on historical experience, on information from third-party professionals, and other various assumptions that are believed to be reasonable under the facts and circumstances.
Joint Venture Limited Liability Corporations (“JVs”) We had an aggregate investment totaling approximately $29,300 in three JVs, expected to produce approximately 5,150 lots. Of the lots to be produced by the JVs, approximately 4,800 lots were controlled by us and approximately 350 lots were either under contract with unrelated parties or currently not under contract.
Joint Venture Limited Liability Corporations (“JVs”) We had an aggregate investment totaling approximately $78,100 in five JVs, expected to produce approximately 8,900 lots. Of the lots to be produced by the JVs, approximately 8,550 lots were controlled by us and approximately 350 lots were either under contract with unrelated parties or currently not under contract.
Homebuilding Operations The following table summarizes the results of our consolidated homebuilding operations and certain operating activity for each of the last three years: Year Ended December 31, 2024 2023 2022 Financial data: Revenues $ 10,292,425 $ 9,314,605 $ 10,326,770 Cost of sales $ 7,850,549 $ 7,051,198 $ 7,662,271 Gross profit margin percentage 23.7 % 24.3 % 25.8 % Selling, general and administrative expenses $ 598,207 $ 588,962 $ 532,353 Operating data: New orders (units) 22,560 21,729 19,164 Average new order price $ 457.7 $ 448.4 $ 462.8 Settlements (units) 22,836 20,662 22,732 Average settlement price $ 450.7 $ 450.7 $ 454.3 Backlog (units) 9,953 10,229 9,162 Average backlog price $ 481.4 $ 465.0 $ 472.2 New order cancellation rate 14.2 % 12.8 % 14.2 % 14 Table of Contents Consolidated Homebuilding Homebuilding revenues increased 11% in 2024 compared to 2023, as a result of an 11% increase in the number of units settled.
Homebuilding Operations The following table summarizes the results of our consolidated homebuilding operations and certain operating activity for each of the last three years: Year Ended December 31, 2025 2024 2023 Financial data: Revenues $ 10,094,269 $ 10,292,425 $ 9,314,605 Cost of sales $ 7,953,401 $ 7,850,549 $ 7,051,198 Gross profit margin percentage 21.2 % 23.7 % 24.3 % Selling, general and administrative expenses $ 599,667 $ 598,207 $ 588,962 Operating data: New orders (units) 20,410 22,560 21,729 Average new order price $ 456.2 $ 457.7 $ 448.4 Settlements (units) 21,915 22,836 20,662 Average settlement price $ 460.6 $ 450.7 $ 450.7 Backlog (units) 8,448 9,953 10,229 Average backlog price $ 474.4 $ 481.4 $ 465.0 New order cancellation rate 17.0 % 14.2 % 12.8 % 14 Table of Contents Consolidated Homebuilding Homebuilding revenues decreased 2% in 2025 compared to 2024, as a result of a 4% decrease in the number of units settled.
We had additional funding commitments totaling approximately $8,400 to one of the JVs as of December 31, 2024. Land Under Development We owned land with a carrying value of approximately $65,400 that we expect to be developed into approximately 2,600 finished lots.
We had additional funding commitments totaling approximately $34,100 to three of the JVs as of December 31, 2025. Land Under Development We owned land with a carrying value of approximately $39,300 that we expect to be developed into approximately 2,300 finished lots.
The increase in the average settlement price is attributable to a 2% higher average price of units in backlog entering 2024 compared to backlog entering 2023, coupled with a 5% higher average price of New Orders for the first six months of 2024 compared to the same period of 2023.
The increase in the average settlement price was primarily attributable to a 9% higher average sales price of units in backlog entering 2025 compared to backlog entering 2024, coupled with a 9% increase in the average sales price of New Orders in the first six months of 2025 compared to the same period in 2024.
The following table summarizes the results of our mortgage banking operations and certain statistical data for each of the last three years: Year Ended December 31, 2024 2023 2022 Loan closing volume: Total principal $ 6,260,428 $ 5,736,532 $ 6,313,416 Loan volume mix: Adjustable rate mortgages 2 % 2 % 8 % Fixed-rate mortgages 98 % 98 % 92 % Operating profit: Segment profit $ 159,201 $ 138,313 $ 125,756 Equity-based compensation expense (4,266) (5,520) (3,606) Mortgage banking income $ 154,935 $ 132,793 $ 122,150 Capture rate: 86 % 87 % 83 % Mortgage banking fees: Net gain on sale of loans $ 188,544 $ 162,658 $ 152,668 Title services 43,135 40,754 46,793 Servicing fees 375 185 203 $ 232,054 $ 203,597 $ 199,664 Loan closing volume in 2024 increased by approximately $523,900, or 9%, from 2023.
The following table summarizes the results of our mortgage banking operations and certain statistical data for each of the last three years: Year Ended December 31, 2025 2024 2023 Loan closing volume: Total principal $ 6,039,621 $ 6,260,428 $ 5,736,532 Loan volume mix: Adjustable rate mortgages 7 % 2 % 2 % Fixed-rate mortgages 93 % 98 % 98 % Operating profit: Segment profit $ 156,161 $ 159,201 $ 138,313 Equity-based compensation expense (4,112) (4,266) (5,520) Mortgage banking income $ 152,049 $ 154,935 $ 132,793 Capture rate: 86 % 86 % 87 % Mortgage banking fees: Net gain on sale of loans $ 187,750 $ 188,544 $ 162,658 Title services 41,516 43,135 40,754 Servicing fees 424 375 185 $ 229,690 $ 232,054 $ 203,597 Loan closing volume in 2025 decreased by approximately $220,800, or 4%, from 2024.
Lot Purchase Agreements ("LPAs") We controlled approximately 155,000 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $764,900 and $8,700, respectively. Included in the number of controlled lots are approximately 10,700 lots for which we have recorded a contract land deposit impairment allowance of approximately $58,600 as of December 31, 2024.
Lot Purchase Agreements ("LPAs") We controlled approximately 169,250 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $920,100 and $4,600, respectively. Included in the number of controlled lots are approximately 18,200 lots for which we have recorded a contract land deposit impairment allowance of approximately $111,000 as of December 31, 2025.
Options and RSUs which are subject to a performance condition are treated as a separate award from the “service-only” Options and RSUs, and compensation expense is recognized when it becomes probable that the stated performance target will be achieved. We calculate the fair value of our Options, which are not publicly traded, using the Black-Scholes option-pricing model.
Options and RSUs which are subject to a performance condition are treated as a separate award from the “service-only” Options and RSUs, and compensation expense is recognized when it becomes probable that the stated performance target will be achieved.
Changes in management’s judgment of the expected term and the expected volatility could have a material effect on the grant-date fair value calculated and expensed within the income statement.
To estimate expected volatility, we analyze the historical volatility of our common stock over a period equal to the Option’s expected term. Changes in management’s judgment of the expected term and the expected volatility could have a material effect on the grant-date fair value calculated and expensed within the income statement.
Cash was used primarily to repurchase 256,871 shares of our common stock at an aggregate purchase price of $2,057,677 under our ongoing common stock repurchase program, discussed above. Cash was provided from stock option exercise proceeds totaling $161,625. For the year ended December 31, 2023, cash, restricted cash and cash equivalents increased by $640,926.
Cash was used primarily to repurchase 256,871 shares of our common stock at an aggregate purchase price of $2,057,677 under our ongoing common stock repurchase program, discussed above. Cash was provided from stock option exercise proceeds totaling $161,625. As of December 31, 2025 and 2024, restricted cash totaled $40,395 and $53,692, respectively.
Our backlog of homes sold but not yet settled with the customer as of December 31, 2024 decreased on a unit basis by 3% to 9,953 units and increased on a dollar basis by 1% to $4,791,870 when compared to December 31, 2023.
Our backlog of homes sold but not yet settled with the customer as of December 31, 2025 decreased on a unit basis by 15% to 8,448 units and decreased on a dollar basis by 16% to $4,008,043 when compared to December 31, 2024.
As noted above, we calculate the fair value of our Options using the Black-Scholes option-pricing model. While the Black-Scholes model is a widely accepted method to calculate the fair value of options, its results are dependent on input variables, two of which, expected term and expected volatility, are significantly dependent on management’s judgment.
While the Black-Scholes model is a widely accepted method to calculate the fair value of options, its results are dependent on input variables, two of which, expected term and expected volatility, are significantly dependent on management’s judgment. We have concluded that our historical exercise experience is the best estimate of future exercise patterns to determine an Option’s expected term.
For the year ended December 31, 2024, we repurchased 256,871 shares of our common stock at an aggregate purchase price of $2,057,677. As of December 31, 2024, we had approximately $868,200 available under Board approved repurchase authorizations.
For the year ended December 31, 2025, we repurchased 243,082 shares of our common stock at an aggregate purchase price of $1,818,595. As of December 31, 2025, we had approximately $549,600 available under Board approved repurchase authorizations.
The increase in the average sales price of New Orders was primarily attributable to a relative shift to higher priced communities in certain markets year over year. Mid East The Mid East segment had an approximate $33,000, or 13%, increase in segment profit in 2024 compared to 2023.
The increase in the average sales price of New Orders was primarily attributable to a relative shift to higher priced communities in certain markets year over year. 18 Table of Contents Mid East The Mid East segment had an approximate $23,800, or 8%, decrease in segment profit in 2025 compared to 2024, due primarily to a decrease in gross profit margins to 21.1% in 2025 from 22.3% in 2024.
As a result, our quarterly results of operations are not necessarily indicative of the results that may be expected for the full year. Effective Tax Rate Our consolidated effective tax rates in 2024 and 2023 were 20.50% and 17.46%, respectively.
However, in recent years our typical seasonal trends have been affected by significant changes in market conditions. As a result, our quarterly results of operations are not necessarily indicative of the results that may be expected for the full year. Effective Tax Rate Our consolidated effective tax rates in 2025 and 2024 were 23.96% and 20.50%, respectively.
In addition, NVRM’s operating results may be 21 Table of Contents adversely affected in future periods due to tightening and volatility of the credit markets, changes in investor funding times, increased regulation of mortgage lending practices and increased competition in the mortgage market.
In addition, NVRM’s operating results may be adversely affected in future periods due to tightening and volatility of the credit markets, changes in investor funding times, increased regulation of mortgage lending practices and increased competition in the mortgage market. 21 Table of Contents Seasonality We historically have experienced variability in our quarterly results, generally having higher New Order activity in the first half of the year and higher home settlements, revenue and net income in the second half of the year.
(iii) Obligations under operating and finance leases related primarily to office space and our production facilities.
(iii) Obligations under operating and finance leases related primarily to corporate and division offices, production facilities, model homes, and certain office and production equipment.
Income before tax from our mortgage banking segment totaled $154,935 in 2024, an increase of 17% when compared to $132,793 in 2023.
Income before tax from our mortgage banking segment totaled $152,049 in 2025, a decrease of 2% when compared to $154,935 in 2024.
Mortgage Banking Segment We conduct our mortgage banking activity through NVRM, a wholly owned subsidiary. NVRM focuses exclusively on serving the homebuilding segment customer base.
These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled. 20 Table of Contents Mortgage Banking Segment We conduct our mortgage banking activity through NVRM, a wholly owned subsidiary. NVRM focuses exclusively on serving the homebuilding segment customer base.
Despite a 13% decrease in the average number of active communities year over year, New Orders were favorably impacted by a 22% higher sales absorption rate year over year. Sales demand remained favorable in certain markets within the segment due to a limited supply of homes in the resale market.
New Orders were negatively impacted by a 9% lower sales absorption rate due to weaker demand and a 4% decrease in the average number of active communities year over year. The average sales price of New Orders was favorably impacted by a shift to higher priced communities in certain markets within the segments year over year.
Our net income for 2024 was $1,681,928, or $506.69 per diluted share, increases of 6% and 9% compared to 2023 net income and diluted earnings per share, respectively. Our homebuilding gross profit margin percentage was 23.7% in 2024 compared to 24.3% in 2023. Settlements for the year ended December 31, 2024 totaled 22,836 units, an increase of 11% from 2023.
Our net income for 2025 was $1,339,816, or $436.55 per diluted share, decreases of 20% and 14% compared to 2024 net income and diluted earnings per share, respectively. Our homebuilding gross profit margin percentage was 21.2% in 2025 compared to 23.7% in 2024. Settlements for the year ended December 31, 2025 totaled 21,915 units, a decrease of 4% from 2024.
External corporate interest expense is primarily comprised of interest charges on our 3.00% Senior Notes due 2030, and is not charged to the operating segments because the charges are included in the corporate capital allocation discussed above. 19 Table of Contents Year Ended December 31, 2024 2023 2022 Homebuilding consolidated gross profit: Mid Atlantic $ 1,105,469 $ 1,023,993 $ 1,280,596 North East 303,650 243,634 226,666 Mid East 414,449 372,671 476,659 South East 634,847 629,843 751,734 Consolidation adjustments and other (16,539) (6,734) (71,156) Homebuilding consolidated gross profit $ 2,441,876 $ 2,263,407 $ 2,664,499 Year Ended December 31, 2024 2023 2022 Homebuilding consolidated profit before taxes: Mid Atlantic $ 816,255 $ 745,323 $ 994,027 North East 217,225 169,012 157,333 Mid East 290,834 257,865 343,236 South East 388,158 440,538 577,030 Reconciling items: Contract land deposit impairment adjustment (1) 6,228 3,279 (27,300) Equity-based compensation expense (2) (69,659) (93,987) (78,931) Corporate capital allocation (3) 330,897 288,805 302,904 Unallocated corporate overhead (156,470) (175,208) (129,998) Consolidation adjustments and other (4) 26,424 44,619 (1,719) Corporate interest income 137,530 142,083 32,457 Corporate interest expense (26,851) (26,749) (37,995) Reconciling items sub-total 248,099 182,842 59,418 Homebuilding consolidated profit before taxes $ 1,960,571 $ 1,795,580 $ 2,131,044 (1) This item represents changes to the contract land deposit impairment allowance, which are not allocated to our reportable segments.
See further discussion of contract land deposit impairment charges in Reportable Homebuilding Segments above. 19 Table of Contents Year Ended December 31, 2025 2024 2023 Homebuilding consolidated profit before taxes: Mid Atlantic $ 722,599 $ 816,255 $ 745,323 North East 213,546 217,225 169,012 Mid East 266,990 290,834 257,865 South East 202,011 388,158 440,538 Reconciling items: Contract land deposit impairment adjustment (2) (72,276) 6,228 3,279 Equity-based compensation expense (65,101) (69,659) (93,987) Corporate capital allocation (3) 368,698 330,897 288,805 Unallocated corporate overhead (146,123) (156,470) (175,208) Consolidation adjustments and other (4) 62,872 26,424 44,619 Corporate interest income 84,158 137,530 142,083 Corporate interest expense (27,491) (26,851) (26,749) Reconciling items sub-total 204,737 248,099 182,842 Homebuilding consolidated profit before taxes $ 1,609,883 $ 1,960,571 $ 1,795,580 (2) This item represents changes to the contract land deposit impairment allowance, which are not allocated to our reportable segments.
The decrease in backlog units was attributable to a higher backlog turnover rate year over year as the number of units settled exceeded New Orders year over year.
The decrease in backlog units was attributable to a 10% decrease in New Orders year over year, coupled with a higher backlog turnover rate in 2025. Backlog dollars were lower primarily due to the decrease in backlog units in 2025.
Segment revenues in 2024 were higher by approximately $388,200, or 16%, due to a 19% increase in the number of units settled, offset by a 3% decrease in the average price of units settled year over year.
Segment revenues in 2025 decreased by approximately $196,200, or 7%, due primarily to a 6% decrease in the number of units settled year over year.
Our backlog represents homes sold but not yet settled with our customers. As of December 31, 2024, our backlog decreased on a unit basis by 3% to 9,953 units, but increased on a dollar basis by 1% to $4,791,870 when compared to 10,229 units and $4,756,926, respectively, as of December 31, 2023.
As of December 31, 2025, our backlog decreased on a unit basis by 15% to 8,448 units, and decreased on a dollar basis by 16% to $4,008,043 when compared to 9,953 units and $4,791,870, respectively, as of December 31, 2024.
In addition, the Credit Agreement provides for a $100,000 sublimit for the issuance of letters of credit of which there was approximately $14,600 outstanding as of December 31, 2024. The Credit Agreement termination date is February 12, 2026. There were no borrowings outstanding under the Credit Agreement as of December 31, 2024.
Credit Agreement We have an unsecured revolving credit agreement (the "Credit Agreement") which provides for aggregate revolving loan commitments of $300,000, and a $100,000 sublimit for the issuance of letters of credit of which there was approximately $9,700 outstanding as of December 31, 2025. There were no borrowings outstanding under the Credit Agreement as of December 31, 2025.
The increase in 2023 from 2022 was primarily attributable to a four year block grant of Options and RSUs in May 2022. See further discussion of equity-based compensation in Note 11 in the accompanying consolidated financial statements. (3) This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments.
See further discussion of contract land deposit impairment charges in Note 3 in the accompanying consolidated financial statements. (3) This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments.
Lots Controlled and Land Deposits: As of December 31, 2024 2023 Total lots controlled: Mid Atlantic 50,900 46,000 North East 17,000 14,300 Mid East 24,100 22,200 South East 70,400 59,000 Total 162,400 141,500 As of December 31, 2024 2023 Contract land deposits, net: Mid Atlantic $ 258,333 $ 222,922 North East 105,062 61,182 Mid East 65,147 46,804 South East 306,855 253,292 Total $ 735,397 $ 584,200 Mid Atlantic The Mid Atlantic segment had an approximate $70,900, or 10%, increase in segment profit in 2024 compared to 2023, driven by an increase in segment revenues of approximately $233,800, or 6%, coupled with an increase in gross profit margins.
Lots Controlled and Land Deposits: As of December 31, 2025 2024 Total lots controlled: Mid Atlantic 60,100 50,900 North East 19,000 17,000 Mid East 28,100 24,100 South East 72,900 70,400 Total 180,100 162,400 As of December 31, 2025 2024 Contract land deposits, net: Mid Atlantic $ 347,941 $ 258,333 North East 105,051 105,062 Mid East 85,515 65,147 South East 317,516 306,855 Total $ 856,023 $ 735,397 Mid Atlantic The Mid Atlantic segment had an approximate $93,700, or 11%, decrease in segment profit in 2025 compared to 2024.
Segment New Orders increased 7% while the average sales price of New Orders remained flat year over year. The increase in New Orders was primarily attributable to a 28% increase in the average number of active communities year over year, offset partially by a 16% lower absorption rate within the segment year over year.
The decrease in New Orders was primarily attributable to a 21% lower absorption rate due to weaker demand, offset partially by the aforementioned increase in the average number of active communities within the segment year over year. Absorption rates continue to be negatively impacted by rising resale and new home inventory in several of the markets within the segment.
The increase in settlements was attributable primarily to a 15% higher backlog balance entering 2024 compared to the backlog entering 2023, coupled with a higher backlog turnover rate year over year. The decrease in the average settlement price was attributable primarily to a 7% lower average sales price of units in backlog entering 2024 compared to backlog entering 2023.
The decrease in the number of units settled is primarily attributable to an 11% lower backlog unit balance entering 2025 compared to backlog entering 2024, offset partially by a higher backlog turnover rate year over year.
The increase was primarily attributable to a 9% increase in the number of loans closed, resulting from an 11% increase in the homebuilding segment’s number of homes settled in 2024 as compared to 2023.
The decrease was primarily attributable to a 5% decrease in the number of loans closed, resulting from a 4% decrease in the homebuilding segment’s number of homes settled in 2025 as compared to 2024. Segment profit in 2025 decreased by approximately $3,000, or 2%, from 2024, which was primarily attributable to a decrease in fees from title services.
The increase in the number of units settled was primarily attributable to a 12% higher backlog unit balance entering 2024 compared to the same period in 2023, coupled with a higher backlog turnover rate. The gross profit margin percentage in 2024 decreased to 23.7% from 24.3% in 2023 .
The decrease in the number of units settled was primarily attributable to a 3% lower backlog unit balance entering 2025 compared to the same period in 2024, coupled with an 11% decrease in new orders in the first six months of 2025 compared to the same period in 2024.
Cash was used primarily to repurchase 181,499 shares of our common stock at an aggregate purchase price of $1,081,815 under our ongoing common stock repurchase program, discussed above. Cash was provided from stock option exercise proceeds totaling $250,509. As of December 31, 2024 and 2023, restricted cash totaled $53,692 and $52,550, respectively.
Cash was used primarily to repurchase 243,082 shares of our common stock at an aggregate purchase price of $1,833,316 under our ongoing common stock repurchase program, discussed above (which includes the associated excise tax payments). Cash was provided from stock option exercise proceeds totaling $80,146.
New Orders were slightly higher despite a 12% decrease in the average number of active communities year over year, due to a 14% higher sales absorption rate year over year. Sales demand remained favorable in certain markets within the segment due to a limited supply of homes in the resale market.
New Orders were lower primarily due to a 6% decrease in the average number of active communities, coupled with a 5% lower sales absorption rate year over year due to weaker demand.
The grant date fair value of the RSUs is the closing price of our common stock on the day immediately preceding the date of grant. The reversal of compensation expense previously recognized for grants forfeited is recorded in the period in which the forfeiture occurs.
The reversal of compensation expense previously recognized for grants forfeited is recorded in the period in which the forfeiture occurs. As noted above, we calculate the fair value of our Options using the Black-Scholes option-pricing model.
The increase in the average sales price of New Orders was primarily attributable to a relative shift to higher priced communities in certain markets year over year. North East The North East segment had an approximate $48,200, or 29%, increase in segment profit in 2024 compared to 2023.
New Orders were lower primarily due to a 15% decrease in the average number of active communities year over year. North East The North East segment had an approximate $3,700, or 2%, decrease in segment profit in 2025 compared to 2024, despite a 3% increase in segment revenues year over year.
The segment’s gross profit margin percentage increased to 22.3% in 2024 from 21.6% in 2023. Gross profit margin was favorably impacted by the improved leveraging of certain operating costs as settlement activity increased, offset partially by higher lot costs and closing cost assistance year over year.
The segment's gross profit margin percentage decreased to 18.3% in 2025 from 22.3% in 2024. Gross profit margins were negatively impacted primarily by higher lot costs, an increase in certain operating costs, and an increase in lot deposit impairment charges year over year.
Gross profit margins were favorably impacted primarily by the improved leveraging of certain operating costs attributable to the increase in settlement activity, offset partially by higher lot costs and closing cost assistance year over year. Segment New Orders increased 1% while the average sales price of New Orders increased 2% in 2024 compared to 2023.
Gross profit margin was negatively impacted by higher lot costs and certain operating costs, as well as by pricing pressure due primarily to continued affordability challenges. Segment New Orders decreased 13% while the average sales price of New Orders increased 5% in 2025 compared to 2024.
As of December 31, 2024, there was no debt outstanding under the Repurchase Agreement and there were no borrowing base limitations. See Note 8 of this Form 10-K for additional disclosures regarding our Senior Notes, Credit Agreement and Repurchase Agreement. Cash Flows For the year ended December 31, 2024, cash, restricted cash and cash equivalents decreased by $550,777.
Repurchase Agreement Our mortgage banking subsidiary, NVRM, has an unsecured revolving mortgage repurchase facility (the "Repurchase Agreement") which provides for aggregate borrowing up to $150,000. As of December 31, 2025, there were no borrowings outstanding under the Repurchase Agreement. See Note 7 of this Form 10-K for additional information regarding our Senior Notes, Credit Agreement and Repurchase Agreement.
South East The South East segment had an approximate $52,400, or 12%, decrease in segment profit in 2024 compared to 2023 due primarily to a decrease in gross profit margins to 22.3% in 2024 from 25.7% in 2023. Gross profit margins were negatively impacted primarily by higher lot costs and closing cost assistance.
The decrease was due primarily to a decrease in gross profit margins to 23.3% in 2025 from 25.0% in 2024. Gross profit margins were negatively impacted by higher lot costs and pricing pressure due primarily to continued affordability challenges. Segment New Orders decreased 13% and the average sales price of New Orders decreased 1% in 2025 compared to 2024.
Segment revenues increased due to a 6% increase in the number of units settled which was primarily attributable to an 11% higher backlog unit balance entering 2024 compared to backlog entering 2023. The Mid Atlantic segment’s gross profit margin percentage increased to 25.0% in 2024 from 24.4% in 2023.
Segment profit was negatively impacted by a decrease in the segment's gross profit margin percentage to 25.5% in 2025 from 26.0% in 2024 due primarily to an increase in certain material costs. Segment revenues were favorably impacted by a 9% increase in the average settlement price year over year, offset by a 5% decrease in the number of units settled.
Net cash provided by operating activities was $1,497,993, due primarily to cash provided by earnings in 2023 and net cash proceeds of $46,136 from mortgage loan activity. Cash was primarily used to fund the increase in inventory of $161,875 attributable to an increase in units under construction as of December 31, 2023 compared to December 31, 2022.
Cash was primarily used to fund the increase in contract land deposits of $200,657 attributable to an increase in the number of lots under control as of December 31, 2025 compared to December 31, 2024, and net mortgage loan activity of $238,260. Net cash used in investing activities in 2025 was $71,208.
Segment New Orders and the average sales price of New Orders each increased 3% in 2024 compared to 2023. Despite an 8% decrease in the average number of active communities year over year, New Orders were favorably impacted by 12% higher absorption rates year over year.
SG&A expenses were 12% higher year over year, resulting primarily from higher personnel and marketing costs attributable to a 23% increase in the average number of active communities year over year. Segment New Orders decreased 3% while the average sales price of New Orders remained flat year over year.
Net cash used in investing activities in 2023 was $24,100. Cash was used primarily for purchases of property, plant and equipment of $24,877. 23 Table of Contents Net cash used by financing activities in 2023 was $832,967.
Cash was used primarily to fund investments in unconsolidated joint ventures totaling $47,614 and purchases of property, plant and equipment of $24,508. Net cash used by financing activities in 2025 was $1,757,898.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeMaturities (000's) 2025 2026 2027 2028 2029 Thereafter Total Fair Value Mortgage banking segment Interest rate sensitive assets: Mortgage loans held for sale $ 352,489 — — — — — $ 352,489 $ 355,209 Average interest rate 6.2 % — — — — — 6.2 % Other: Forward trades of mortgage-backed securities (a) $ 5,700 — — — — — $ 5,700 $ 5,700 Forward loan commitments (a) $ 9,196 — — — — — $ 9,196 $ 9,196 Homebuilding segment Interest rate sensitive assets: Interest-bearing deposits $ 2,529,235 — — — — — $ 2,529,235 $ 2,529,235 Average interest rate 4.4 % — — — — — 4.4 % Interest rate sensitive liabilities: Fixed rate obligations $ — — — — — $ 900,000 $ 900,000 $ 811,161 Average interest rate — % — — — — 3.0 % 3.0 % (a) Represents the fair value recorded pursuant to ASC 815, Derivatives and Hedging . 26 Table of Contents Item 8.
Biggest changeBecause we sell all of the mortgage loans we originate into the secondary markets, we have made the assumption that the portfolio of mortgage loans held for sale will mature in the first year. 25 Table of Contents Maturities (000's) 2026 2027 2028 2029 2030 Thereafter Total Fair Value Mortgage banking segment Interest rate sensitive assets: Mortgage loans held for sale $ 557,540 — — — — — $ 557,540 $ 571,596 Average interest rate 6.0 % — — — — — 6.0 % Other: Forward trades of mortgage-backed securities (a) $ 112 — — — — — $ 112 $ 112 Forward loan commitments (a) $ 37,279 — — — — — $ 37,279 $ 37,279 Homebuilding segment Interest rate sensitive assets: Interest-bearing deposits $ 1,827,493 — — — — — $ 1,827,493 $ 1,827,493 Average interest rate 3.6 % — — — — — 3.6 % Interest rate sensitive liabilities: Fixed rate obligations $ — — — — $ 900,000 — $ 900,000 $ 852,930 Average interest rate — % — — — 3.0 % — 3.0 % (a) Represents the fair value recorded as of December 31, 2025. 26 Table of Contents Item 8.
See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 8 to the accompanying consolidated financial statements included herein for further discussion of these debt instruments. Our mortgage banking segment is exposed to interest rate risk as it relates to its lending activities, including originating mortgage loans and providing rate lock commitments to borrowers.
See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 7 to the accompanying consolidated financial statements included herein for further discussion of these debt instruments. Our mortgage banking segment is exposed to interest rate risk as it relates to its lending activities, including originating mortgage loans and providing rate lock commitments to borrowers.
We do not engage in speculative derivative activities. All of the mortgage banking segment’s loan portfolio is held for sale and subject to forward sale commitments. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 14 to the accompanying consolidated financial statements included herein for further discussion of these items.
We do not engage in speculative derivative activities. All of the mortgage banking segment’s loan portfolio is held for sale and subject to forward sale commitments. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 13 to the accompanying consolidated financial statements included herein for further discussion of these items.
For variable rate debt, interest rate changes generally will not affect the fair value of the variable debt instruments but will affect earnings and cash flow. As of December 31, 2024, there was no debt outstanding under our credit facility or loan repurchase facility.
For variable rate debt, interest rate changes generally will not affect the fair value of the variable debt instruments but will affect earnings and cash flow. As of December 31, 2025, there was no debt outstanding under our credit facility or loan repurchase facility.
The following table represents the contractual balances of our on-balance sheet financial instruments at the expected maturity dates, as well as the fair values of those on-balance sheet financial instruments as of December 31, 2024.
The following table represents the contractual balances of our on-balance sheet financial instruments at the expected maturity dates, as well as the fair values of those on-balance sheet financial instruments as of December 31, 2025.
Removed
Because we sell all of the mortgage loans we originate into the secondary markets, we have made the assumption that the portfolio of mortgage loans held for sale will mature in the first year.

Other NVR 10-K year-over-year comparisons