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What changed in NVR, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NVR, Inc.'s 2023 and 2024 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 2024 report.

+174 added−170 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-14)

Top changes in NVR, Inc.'s 2024 10-K

174 paragraphs added · 170 removed · 144 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSee “Risk Factors” in Item 1A of this Form 10-K for additional information regarding these risks. 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.
Biggest changeAdditionally, 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.
Our principal internet 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.
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.
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 and Tennessee. Our NVHomes and Heartland Homes products are marketed primarily to move-up and luxury buyers.
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.
Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates” or the negative thereof or other comparable terminology. All statements other than of historical facts are forward looking statements.
Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “may,” “will,” “should,” "could," or “anticipates” or the negative thereof or other comparable terminology. All statements other than of historical facts are forward looking statements.
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 over the internet 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. 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 .
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 fifteen 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-six 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, 2023 backlog during 2024. 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, 2024 backlog during 2025. See “Risk Factors” in Item 1A and “Seasonality” in Item 7 of this Form 10-K.
Segment information for our homebuilding and mortgage banking businesses is included in Note 2 in the accompanying consolidated financial statements. 1 Table of Contents Homebuilding Products We offer single-family detached homes, townhomes and condominium buildings with many different home designs. These home designs have a variety of elevations and numerous other options.
Segment information for our homebuilding and mortgage banking businesses is included in Note 2 in the accompanying consolidated financial statements. 1 Table of Contents Homebuilding Products We offer single-family detached homes, townhomes and condominiums with many different home designs. These home designs have a variety of elevations and numerous other options.
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 25 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 30 years and is designed to motivate and retain highly qualified and experienced employees.
During the four quarters of each of 2023, 2022 and 2021, approximately 4% in 2023, 4% in 2022 and 3% in 2021 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 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.
Expressed as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 13%, 14% and 9% in 2023, 2022, and 2021, 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 14%, 13% and 14% in 2024, 2023, and 2022, respectively.
Because NVRM originates mortgage loans almost exclusively for our homebuilding customers, NVRM is dependent on our homebuilding segment. In 2023, NVRM closed approximately 15,900 loans with an aggregate principal amount of approximately $5.7 billion as compared to approximately 17,000 loans with an aggregate principal amount of approximately $6.3 billion in 2022.
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.
Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by us and our customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by us in our homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which we have little or no control.
Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by us and our customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by us in our homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which we have little or no control as well as risks and uncertainties identified under Item 1A "Risk Factors" and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations.
The average price of homes in backlog decreased to $465,000 at December 31, 2023 from $472,200 at December 31, 2022. 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 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.
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 and Georgia Backlog Backlog, which represents homes sold but not yet settled with the customer, totaled 10,229 units and approximately $4.8 billion at December 31, 2023 compared to 9,162 units and approximately $4.3 billion at December 31, 2022.
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.
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 10,000 finished square feet. During 2023, the prices at which we settled homes ranged from approximately $190,000 to $2.6 million and averaged $450,700.
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.
Human Capital As of December 31, 2023, 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, compared to December 31, 2022, when we had approximately 6,550 full time employees, of whom approximately 5,500 worked in our homebuilding operations, and approximately 1,050 worked in our mortgage banking operations.
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.
During 2022, our average price of homes settled was $454,300. 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 $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.
In addition, see Notes 3, 4 and 5 in the accompanying consolidated financial statements included herein for additional information regarding LPAs, joint ventures and land under development, respectively. In addition to building and selling homes, we provide a number of mortgage-related services through our mortgage banking operations.
In addition, see Notes 3, 4 and 5 in the accompanying consolidated financial statements included herein for additional information regarding LPAs, joint ventures and land under development, respectively. We provide a number of mortgage and title-related services through our mortgage banking operations. Through operations in each of our homebuilding markets, NVRM originates mortgage loans exclusively for our homebuyers.
Through operations in each of our homebuilding markets, NVRM originates mortgage loans almost exclusively for our homebuyers. NVRM generates revenues primarily from origination fees, gains on sales of loans and title fees. NVRM sells almost all of the mortgage loans it closes into the secondary markets on a servicing released basis.
NVRM generates revenues primarily from origination fees, gains on sales of loans and title fees. NVRM sells the mortgage loans it closes into the secondary markets primarily on a servicing released basis.
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 in connection with mortgage loan closings for which they receive commissions and fees.
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.
NVRM sells almost all of the mortgage loans it closes to investors in the secondary markets 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 $2.9 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.
Removed
However, increased construction activity and demand for building materials, coupled with the ongoing effects of the COVID-19 pandemic, led to supply chain disruptions and longer construction cycle times during 2021 and 2022. During 2023, we began to see improvements in our supply chains and in turn improvement in our construction cycle times.
Removed
NVRM’s mortgage loans in process that had not closed had an aggregate principal balance of approximately $2.9 billion as of December 31, 2023 compared to approximately $2.5 billion as of December 31, 2022.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeProduct liability litigation and warranty claims may adversely impact our operations. Construction defect and home warranty claims are common and can represent a substantial risk for the homebuilding industry. The cost of insuring against construction defect and product liability claims, as well as the claims themselves, can be high.
Biggest changeThe cost of satisfying our legal obligations in these instances may be significant, and we may be unable to recover the cost of repairs from subcontractors, suppliers and insurers. Product liability litigation and warranty claims may adversely impact our operations. Construction defect and home warranty claims are common and can represent a substantial risk for our homebuilding operations.
Our business is affected by the risks generally incident to the residential construction business, including, but not limited to: • actual and expected direction of interest rates, which affect the availability of mortgage financing for potential purchasers of homes; • the availability of adequate land in desirable locations on favorable terms; • employment levels, consumer confidence and spending and unexpected changes in customer preferences; and • changes in the national economy and in the local economies of the markets in which we operate.
Our business is affected by the risks generally incident to the residential construction business, including, but not limited to: • actual and expected changes in interest rates, which affect the availability of mortgage financing for potential purchasers of homes; • the availability of adequate land in desirable locations on favorable terms; • employment levels, consumer confidence and spending and unexpected changes in customer preferences; and • changes in the national economy and in the local economies of the markets in which we operate.
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 eventually 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 number of homes that can be built within the boundaries of a particular area.
If potential customers or the buyers of our customers’ current homes are not able to obtain suitable financing, the result could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.
If potential customers or the buyers of our customers’ current homes are not able to obtain suitable mortgage financing, the result 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 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, 2023 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. 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.
Additionally, we have continued to elevate our monitoring capabilities to enhance early detection and rapid response to potential security anomalies. Our management team regularly reviews our response readiness and completes tabletop exercises on potential cybersecurity breaches with the assistance of a third party cybersecurity consultant.
Additionally, we have continued to elevate our monitoring capabilities to enhance early detection and rapid response to potential security anomalies. Our management team regularly reviews our response readiness and completes tabletop exercises on potential cybersecurity incidents with the assistance of a third party cybersecurity consultant.
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, consumer confidence, inflation and interest rates.
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.
In the event that disruptions to the secondary markets tighten or eliminate the available liquidity within the secondary markets for mortgage loans, or the underwriting requirements by our secondary market investors continue to 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 is 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 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 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.
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.
If the housing industry suffers a downturn, our sales may decline which could have a material adverse effect on our profitability, stock performance, ability to service our debt obligations and future cash flows. Interest rate movements, inflation and other economic factors can negatively impact our business.
If the economy suffers a downturn, our sales may decline which could have a material adverse effect on our profitability, stock performance, ability to service our debt obligations and future cash flows. Interest rate movements, inflation and other economic factors can negatively impact our business.
High rates of inflation generally affect the homebuilding industry adversely because of their adverse impact on interest rates. High interest rates not only increase the cost of borrowed funds to homebuilders and developers but also have a significant adverse effect on housing demand and on the affordability of permanent mortgage financing to prospective purchasers.
High rates of inflation generally affect the homebuilding industry adversely because of their impact on interest rates and costs. High interest rates not only increase the cost of borrowed funds to homebuilders and developers but also have a significant adverse effect on the affordability of mortgage financing to prospective purchasers and the demand for housing.
Insofar as we underwrite our originated loans to those standards, we bear no increased concentration of credit risk from the issuance of loans, except in certain limited instances where 6 Table of Contents repurchases or early payment defaults occur.
Insofar as we underwrite our originated loans to those standards, we bear no increased concentration of credit risk from the issuance of loans, except in certain limited instances where repurchases or early payment defaults occur.
We also require employees to complete training sessions regarding matters such as cybersecurity threats and data protection on a regular basis. These security measures may not be sufficient for all possible occurrences and may be vulnerable to hacking, employee error, malfeasance, system error, faulty password management or other irregularities.
We also require employees to complete training sessions regarding matters such as cybersecurity threats and data protection on a regular basis. These security measures may not be sufficient for all possible occurrences and our information technology systems may remain vulnerable to hacking, employee error, malfeasance, system error, faulty password management or other irregularities.
Our financial results also are affected by the risks attributable to our mortgage banking business, including interest rate levels, the impact of government regulation on mortgage loan originations and servicing and the need to issue forward commitments to fund and sell mortgage loans. Our homebuilding customers account for almost all of our mortgage banking business.
Our financial results also are affected by other risks attributable to our mortgage banking business, including the impact of government regulation on mortgage loan originations and servicing and the need to issue forward commitments to fund and sell mortgage loans. Our homebuilding customers account for all of our mortgage banking business.
Because almost all of our customers require mortgage financing, limited availability of suitable mortgage financing could impair the affordability of our homes, lower demand for our products, and limit our ability to fully deliver our backlog. Our business and earnings depend on the ability of our potential customers to obtain mortgages for the purchase of our homes.
Because almost all of our customers require mortgage financing, limited availability of suitable mortgage financing could impair the affordability of our homes, lower demand for our products, and increase cancellation of homes in our backlog. Our business and earnings depend on the ability of our potential customers to obtain mortgages for the purchase of our homes.
Our failure to maintain the security of our electronic and other confidential information could expose us to liability and materially adversely affect our financial condition and results of operations. Privacy, security, and compliance concerns have continued to increase as technology has evolved.
Cybersecurity incidents affecting our electronic and other confidential information could expose us to liability and materially adversely affect our financial condition and results of operations. Privacy, security, and compliance concerns have continued to increase as technology has evolved.
An insufficient supply of building lots in one or more of our markets, an inability of our developers to deliver finished lots in a timely fashion due to their inability to secure financing to fund development activities or for other reasons, or our inability to purchase or finance building lots on reasonable terms could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.
An insufficient supply of building lots in one or more of our markets, an inability of our developers to deliver finished lots in a timely fashion, or our inability to purchase or finance building lots on reasonable terms could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.
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.
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.
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.
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.
Our mortgage banking operations compete primarily on the basis of customer service, variety of products offered, interest rates offered, prices of ancillary services and relative financing availability and costs. We might not be able to continue to compete successfully in our homebuilding or mortgage banking operations.
Our mortgage banking operations compete primarily on the basis of customer service, variety of products offered, interest rates offered, prices of ancillary services and relative financing availability and 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. Significant increases in costs resulting from these shortages, or delays in construction of homes, could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.
Significant increases in costs resulting from these market conditions, or delays in construction of homes, could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows. We rely on subcontractors to construct our homes. The failure of our subcontractors to properly construct our homes may be costly.
An inability to effectively compete may have an adverse impact on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows. Our inability to secure and control an adequate inventory of lots could adversely impact our operations.
We might not be able to continue to compete successfully in our homebuilding or mortgage banking operations, which could have an adverse impact on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows. Any inability to secure and control an adequate inventory of lots could adversely impact our operations.
The volume of our continuing homebuilding operations therefore affects our mortgage banking business. Our mortgage banking business also is affected by interest rate fluctuations.
The volume of our continuing homebuilding operations therefore affects our mortgage banking business.
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. In addition, demand could be negatively impacted 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.
We rely on subcontractors to construct our homes. The failure of our subcontractors to properly construct our homes may be costly. 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.
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.
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. We are subject to litigation proceedings that could harm our business if an unfavorable ruling were to occur.
The 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.
Removed
The occurrence of such events could require us to repair the homes in accordance with our standards and as required by law. The cost of satisfying our legal obligations in these instances may be significant, and we may be unable to recover the cost of repairs from subcontractors, suppliers and insurers.
Added
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.
Added
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.
Added
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.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CIO has over 35 years of experience and in his 19 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 17 years with NVR in progressively more senior information security roles.
Biggest changeOur 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.
In 2023, our CIO and CISO presented updates on our cybersecurity initiatives quarterly; twice to our Audit Committee and twice to our full Board.
In 2024, our CIO and CISO presented updates on our cybersecurity initiatives quarterly; twice to our Audit Committee and twice to our full Board.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEach of these leases contains various options for extensions of the lease and for the purchase of the facility. Additionally, certain facility leases have early termination options. These leases currently expire between 2027 and 2040. We have entered into lease agreements for new production facilities in Fayetteville, North Carolina and Lavonia, Georgia.
Biggest changeThese facilities range in size from approximately 40,000 square feet to 400,000 square feet and total approximately 1.5 million square feet. Each of these leases contains various options for extensions of the lease and for the purchase of the facility. Additionally, certain facility leases have early termination options. These leases currently expire between 2027 and 2040.
Our plant utilization was 56% and 58% of total capacity in 2023 and 2022, 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.
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 connection with the operation of the homebuilding business, we lease production facilities in the following seven locations: Thurmont, Maryland; Burlington County, New Jersey; Farmington, New York; Kings Mountain, North Carolina; Darlington, Pennsylvania; Portland, Tennessee; and Richmond, Virginia. These facilities range in size from approximately 40,000 square feet to 400,000 square feet and total approximately one million square feet.
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.
The Lavonia facility will be approximately 170,000 square feet with a lease term of 15 years from the commencement date which is expected to be later in 2024, and contains an option for four five year extensions. In addition, we own a production facility of approximately 100,000 square feet in Dayton, Ohio.
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.
The Fayetteville facility will be approximately 145,000 square feet with a lease term of 10 years from the commencement date, which is expected to be in the first quarter of 2024, and contains an option for three five year extensions.
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.
Added
The 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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, 2018 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, 2018. .
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. .
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 12, 2024, there were 158 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 10, 2025, there were 151 shareholders of record of our common stock.
On November 9, 2023, we publicly announced that our Board of Directors had approved a new repurchase authorization in the amount of up to $750 million. 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 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.
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, 2023, we fully utilized the remaining amount available under a $500 million share repurchase authorization that was publicly announced on August 2, 2023.
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.
Repurchase activity is conducted pursuant to publicly announced Board authorizations, and is typically executed in accordance with the safe-harbor provisions of Rule 10b-18 and Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended.
In addition, the repurchase authorizations specifically prohibit us from purchasing shares from our officers, directors, Profit Sharing Plan Trust or Employee Stock Ownership Plan Trust. Repurchase activity is typically executed in accordance with the safe-harbor provisions of Rule 10b-18 and Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended.
For the Year Ended December 31, Comparison of 5 Year Cumulative Total Return 2018 2019 2020 2021 2022 2023 NVR, Inc. $ 100 $ 156 $ 167 $ 242 $ 189 $ 287 S&P 500 $ 100 $ 131 $ 156 $ 200 $ 164 $ 207 Dow Jones US Home Construction $ 100 $ 148 $ 183 $ 278 $ 217 $ 391
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
Removed
In addition, the repurchase authorizations specifically prohibit us from purchasing shares from our officers, directors, Profit Sharing Plan Trust or Employee Stock Ownership Plan Trust.
Removed
The following table provides information regarding common stock repurchases during the quarter ended December 31, 2023: 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, 2023 32,486 $ 5,984.32 32,486 $ 17,891 November 1 - 30, 2023 — $ — — $ 767,891 December 1 - 31, 2023 (1) 14,262 $ 6,452.19 14,262 $ 675,870 Total 46,748 $ 6,127.06 46,748 (1) Of the shares repurchased in December 2023, 2,823 shares were repurchased under the August 2, 2023 authorization, which fully utilized the August 2023 authorization.
Removed
The remaining 11,439 shares were repurchased under the November 9, 2023 share repurchase authorization. On February 14, 2024, the Board of Directors approved an additional repurchase authorization of up to an aggregate of $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 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, 2023 2022 2021 Revenues: Mid Atlantic $ 4,189,957 $ 4,766,329 $ 4,049,871 North East 948,289 892,543 767,828 Mid East 1,723,514 2,147,262 1,891,729 South East 2,452,845 2,520,636 1,992,265 Year Ended December 31, 2023 2022 2021 Gross profit margin: Mid Atlantic $ 1,023,993 $ 1,280,596 $ 987,926 North East 243,634 226,666 163,990 Mid East 372,671 476,659 391,405 South East 629,843 751,734 469,520 Year Ended December 31, 2023 2022 2021 Gross profit margin percentage: Mid Atlantic 24.4 % 26.9 % 24.4 % North East 25.7 % 25.4 % 21.4 % Mid East 21.6 % 22.2 % 20.7 % South East 25.7 % 29.8 % 23.6 % Year Ended December 31, 2023 2022 2021 Segment profit: Mid Atlantic $ 745,323 $ 994,027 $ 734,941 North East 169,012 157,333 105,432 Mid East 257,865 343,236 271,756 South East 440,538 577,030 329,982 16 Table of Contents Segment Operating Activity: Year Ended December 31, 2023 2022 2021 Units Average Price Units Average Price Units Average Price New orders, net of cancellations: Mid Atlantic 8,434 $ 515.5 7,816 $ 526.6 8,749 $ 522.4 North East 1,879 $ 573.2 1,679 $ 528.3 1,685 $ 497.4 Mid East 4,514 $ 396.5 4,344 $ 400.5 5,567 $ 369.3 South East 6,902 $ 366.4 5,325 $ 399.4 6,720 $ 363.6 Total 21,729 $ 448.4 19,164 $ 462.8 22,721 $ 436.1 Year Ended December 31, 2023 2022 2021 Units Average Price Units Average Price Units Average Price Settlements: Mid Atlantic 8,032 $ 521.5 9,042 $ 527.1 8,310 $ 487.3 North East 1,736 $ 546.2 1,763 $ 506.3 1,666 $ 460.9 Mid East 4,391 $ 392.4 5,518 $ 389.1 5,414 $ 349.4 South East 6,503 $ 377.2 6,409 $ 393.3 6,150 $ 323.9 Total 20,662 $ 450.7 22,732 $ 454.3 21,540 $ 403.9 Year Ended December 31, 2023 2022 2021 Units Average Price Units Average Price Units Average Price Backlog: Mid Atlantic 4,094 $ 522.5 3,692 $ 536.3 4,918 $ 534.8 North East 1,028 $ 602.0 885 $ 553.9 969 $ 511.5 Mid East 1,976 $ 412.1 1,853 $ 403.2 3,027 $ 381.3 South East 3,131 $ 378.4 2,732 $ 405.7 3,816 $ 393.7 Total 10,229 $ 465.0 9,162 $ 472.2 12,730 $ 454.2 Operating Data: Year Ended December 31, 2023 2022 2021 New order cancellation rate: Mid Atlantic 12.8 % 14.4 % 9.0 % North East 11.9 % 12.2 % 8.6 % Mid East 13.9 % 16.4 % 10.2 % South East 12.3 % 12.6 % 8.8 % Year Ended December 31, 2023 2022 2021 Average active communities: Mid Atlantic 166 160 155 North East 36 36 34 Mid East 110 126 129 South East 115 93 106 Total 427 415 424 17 Table of Contents Homebuilding Inventory: As of December 31, 2023 2022 Sold inventory: Mid Atlantic $ 796,591 $ 727,501 North East 220,511 156,798 Mid East 268,269 278,034 South East 412,873 413,576 Total (1) $ 1,698,244 $ 1,575,909 As of December 31, 2023 2022 Unsold lots and housing units inventory: Mid Atlantic $ 116,165 $ 111,816 North East 18,804 23,013 Mid East 20,559 17,044 South East 60,953 31,791 Total (1) $ 216,481 $ 183,664 (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 $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.
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. These costs are subsequently recorded through the 20 Table of Contents 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 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.
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 24 Table of Contents 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 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.
Mortgage Repurchase Reserve We originate several different loan products to our customers to finance the purchase of their home. We sell all of the loans we originate into the secondary mortgage market, typically on a servicing released basis and within 30 days from closing.
Mortgage Repurchase Reserve We originate several different loan products for our customers to finance the purchase of their home. We sell all of the loans we originate into the secondary mortgage market, typically on a servicing released basis and within 30 days from closing.
North East: New Jersey and Eastern Pennsylvania Mid East: New York, Ohio, Western Pennsylvania, Indiana and Illinois South East: North Carolina, South Carolina, Georgia, Florida and Tennessee Our lot acquisition strategy is predicated upon avoiding the financial risks associated with direct land ownership and development.
North East: New Jersey and Eastern Pennsylvania Mid East: New York, Ohio, Western Pennsylvania, Indiana and Illinois South East: North Carolina, South Carolina, Georgia, Florida, Tennessee and Kentucky Our lot acquisition strategy is predicated upon avoiding the financial risks associated with direct land ownership and development.
Although we consider the warranty and product liability accrual reflected on the December 31, 2023 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, 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 allowance for losses on contract land deposits reflected on the December 31, 2023 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, 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 believe that the compensation costs recognized in 2023 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 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 consider the mortgage repurchase reserve reflected on the December 31, 2023 consolidated balance sheet to be adequate (see Note 15 to the accompanying consolidated financial statements included herein), there can be no assurance that this reserve will prove to be adequate over time to cover losses due to unanticipated changes to the assumptions used to estimate the mortgage repurchase reserve.
Although we consider the mortgage repurchase reserve reflected on the December 31, 2024 consolidated balance sheet to be adequate (see Note 15 to the accompanying consolidated financial statements included herein), there can be no assurance that this reserve will prove to be adequate over time to cover losses due to unanticipated changes to the assumptions used to estimate the mortgage repurchase reserve.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 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, 2022.
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.
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 2023.
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.
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 at December 31, 2023 compared to December 31, 2022.
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.
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 $172,050, 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 $145,050, with $27,000 due within the next twelve months.
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 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
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.
(ii) Payment obligations totaling approximately $391,300 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 $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.
Insofar as 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.
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.
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.
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.
We were in compliance with all covenants under the Senior Notes at December 31, 2023. Credit Agreement We have an unsecured revolving credit agreement (the "Credit Agreement") with a group of lenders which may be used for working capital and general corporate purposes. The Credit Agreement provides for aggregate revolving loan commitments of $300,000 (the "Facility").
We were in compliance with all covenants under the Senior Notes as of December 31, 2024. Credit Agreement We have an unsecured revolving credit agreement (the "Credit Agreement") with a group of lenders which may be used for working capital and general corporate purposes. The Credit Agreement provides for aggregate revolving loan commitments of $300,000 (the "Facility").
Capital Resources Senior Notes As of December 31, 2023, we had a total of $900,000 in outstanding Senior Notes which mature in May 2030.
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.
Insofar as we underwrite our originated loans to those standards, we bear no increased concentration of credit risk from the issuance of loans, except in certain limited instances where repurchases or early payment defaults occur.
To the extent we underwrite our originated loans to those standards, we bear no increased concentration of credit risk from the issuance of loans, except in certain limited instances where repurchases or early payment defaults occur.
During the four quarters of each of 2023, 2022 and 2021, approximately 4% in 2023, 4% in 2022 and 3% in 2021, 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 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.
Repurchase Agreement Our mortgage banking subsidiary, NVRM, has an unsecured revolving mortgage repurchase agreement (the "Repurchase Agreement") which is non-recourse to NVR. The purpose of the Repurchase Agreement is to finance the origination of mortgage loans by NVRM. The Repurchase Agreement provides borrowing capacity up to $150,000, subject to certain sublimits. The Repurchase Agreement expires on July 17, 2024.
Repurchase Agreement Our mortgage banking subsidiary, NVRM, has an unsecured revolving mortgage repurchase agreement (the "Repurchase Agreement") which is non-recourse to NVR. The purpose of the Repurchase Agreement is to finance the origination of mortgage loans by NVRM. The Repurchase Agreement provides borrowing capacity up to $150,000, subject to certain sublimits. The Repurchase Agreement expires on July 14, 2025.
Calculated as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 13%, 14% and 9% in 2023, 2022, and 2021, respectively.
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.
Warranty/Product Liability Reserves We establish warranty and product liability reserves to provide for estimated future expenses as a result of construction and product defects, product recalls and litigation incidental to our homebuilding business.
Warranty/Product Liability Reserves We establish warranty and product liability reserves to provide for estimated future expenses as a result of construction and product defect claims, product recalls and litigation incidental to our homebuilding business.
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. Net cash used by financing activities in 2023 was $832,967.
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.
Joint Venture Limited Liability Corporations (“JVs”) We had an aggregate investment totaling approximately $29,200 in four JVs, expected to produce approximately 5,200 lots. Of the lots to be produced by the JVs, approximately 4,850 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 $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.
In addition, the Credit Agreement provides for a $100,000 sublimit for the issuance of letters of credit of which there was approximately $13,000 outstanding at December 31, 2023. The Credit Agreement termination date is February 12, 2026. There were no borrowings outstanding under the Credit Agreement as of December 31, 2023.
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.
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, 2023 totaled $9,518,202, a decrease of 10% from $10,526,434 in 2022.
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 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, 2023, we controlled approximately 141,500 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, 2024, we controlled approximately 162,400 lots as discussed below.
At December 31, 2023, 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, 2023, cash, restricted cash and cash equivalents increased by $640,926.
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.
As of December 31, 2023, we had a strong liquidity position with approximately $3,100,000 in cash and cash equivalents, approximately $287,000 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, 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.
For presentation purposes below, the contract land deposit reserve at December 31, 2023 and 2022 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, 2024 and 2023 has been allocated to the reportable segments for the respective years to show contract land deposits on a net basis.
Lot Purchase Agreements ("LPAs") We controlled approximately 134,900 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $617,000 and $7,700, respectively. Included in the number of controlled lots are approximately 10,700 lots for which we have recorded a contract land deposit impairment reserve of approximately $53,400 as of December 31, 2023.
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.
General and administrative expenses decreased by $3,800, or 4%, which was the result of decreased personnel costs. Mortgage Banking – Other We sell all of the loans we originate into the secondary mortgage market.
General and administrative expenses increased by $11,100, or 13%, which was the result of increased personnel costs. Mortgage Banking – Other We sell all of the loans we originate into the secondary mortgage market.
Our backlog represents homes sold but not yet settled with our customers. As of December 31, 2023, our backlog increased on a unit basis by 12% to 10,229 units and on a dollar basis by 10% to $4,756,926 when compared to 9,162 units and $4,325,876, respectively, as of December 31, 2022.
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.
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 Overview section above. 25 Table of Contents
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.
We believe that we are well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of our balance sheet and our disciplined lot acquisition strategy.
Although we are unable to predict the extent to which this will impact our operational and financial performance, we believe that we are well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of our balance sheet and our disciplined lot acquisition strategy.
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, 2023 2022 2021 Loan closing volume: Total principal $ 5,736,532 $ 6,313,416 $ 6,073,934 Loan volume mix: Adjustable rate mortgages 2 % 8 % 3 % Fixed-rate mortgages 98 % 92 % 97 % Operating profit: Segment profit $ 138,313 $ 125,756 $ 176,251 Equity-based compensation expense (5,520) (3,606) (4,647) Mortgage banking income $ 132,793 $ 122,150 $ 171,604 Capture rate: 87 % 83 % 89 % Mortgage banking fees: Net gain on sale of loans $ 162,658 $ 152,668 $ 205,582 Title services 40,754 46,793 42,958 Servicing fees 185 203 792 $ 203,597 $ 199,664 $ 249,332 Loan closing volume in 2023 decreased by approximately $576,900, or 9%, from 2022.
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.
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, 2023 2022 2021 Homebuilding consolidated gross profit: Mid Atlantic $ 1,023,993 $ 1,280,596 $ 987,926 North East 243,634 226,666 163,990 Mid East 372,671 476,659 391,405 South East 629,843 751,734 469,520 Consolidation adjustments and other (6,734) (71,156) (74,263) Homebuilding consolidated gross profit $ 2,263,407 $ 2,664,499 $ 1,938,578 Year Ended December 31, 2023 2022 2021 Homebuilding consolidated profit before taxes: Mid Atlantic $ 745,323 $ 994,027 $ 734,941 North East 169,012 157,333 105,432 Mid East 257,865 343,236 271,756 South East 440,538 577,030 329,982 Reconciling items: Contract land deposit impairment reserve (1) 3,279 (27,300) 22,163 Equity-based compensation expense (2) (93,987) (78,931) (53,587) Corporate capital allocation (3) 288,805 302,904 252,787 Unallocated corporate overhead (175,208) (129,998) (139,611) Consolidation adjustments and other (4) 44,619 (1,719) (56,511) Corporate interest income 142,083 32,457 2,840 Corporate interest expense (26,749) (37,995) (51,393) Reconciling items sub-total 182,842 59,418 (23,312) Homebuilding consolidated profit before taxes $ 1,795,580 $ 2,131,044 $ 1,418,799 (1) This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments.
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.
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, 2023 2022 2021 Corporate capital allocation charge: Mid Atlantic $ 135,618 $ 143,251 $ 124,316 North East 33,269 30,623 25,431 Mid East 39,005 51,376 43,686 South East 80,913 77,654 59,354 Total corporate capital allocation charge $ 288,805 $ 302,904 $ 252,787 (4) The consolidation adjustments and other in each period are primarily driven by changes in units under construction as well as significant fluctuations in lumber prices year over year.
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.
Income before tax from our mortgage banking segment totaled $132,793 in 2023, an increase of 9% when compared to $122,150 in 2022. 14 Table of Contents 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, 2023 2022 2021 Financial data: Revenues $ 9,314,605 $ 10,326,770 $ 8,701,693 Cost of sales $ 7,051,198 $ 7,662,271 $ 6,763,115 Gross profit margin percentage 24.3 % 25.8 % 22.3 % Selling, general and administrative expenses $ 588,962 $ 532,353 $ 474,808 Operating data: New orders (units) 21,729 19,164 22,721 Average new order price $ 448.4 $ 462.8 $ 436.1 Settlements (units) 20,662 22,732 21,540 Average settlement price $ 450.7 $ 454.3 $ 403.9 Backlog (units) 10,229 9,162 12,730 Average backlog price $ 465.0 $ 472.2 $ 454.2 New order cancellation rate 12.8 % 14.2 % 9.2 % Consolidated Homebuilding Homebuilding revenues decreased 10% in 2023 compared to 2022, as a result of a 9% decrease in the number of units settled and a 1% decrease in the average settlement price.
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.
See further discussion of contract land deposit impairment charges in Note 3 in the accompanying consolidated financial statements. (2) The increase in equity-based compensation expense in both 2023 and 2022 was primarily attributable to a four year block grant of Options and RSUs in May 2022.
See further discussion of contract land deposit impairment charges in Note 3 in the accompanying consolidated financial statements. (2) The decrease in equity-based compensation expense in 2024 was primarily attributable to the Options and RSUs issued as part of the 2018 four-year block grant being fully vested as of December 31, 2023.
Our backlog of homes sold but not yet settled with the customer as of December 31, 2023 increased on a unit basis by 12% to 10,229 units and increased on a dollar basis by 10% to $4,756,926 when compared to December 31, 2022.
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.
See “Risk Factors” in Item 1A of this Form 10-K. 15 Table of Contents The backlog turnover rate is impacted by various factors, including, but not limited to, changes in New Order activity, internal production capacity, external subcontractor capacity, building material availability and other external factors over which we do not exercise control.
The rate at which we turn over our backlog is impacted by various factors, including, but not limited to, changes in New Order activity, internal production capacity, external subcontractor capacity, building material availability and other external factors over which we do not exercise control.
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. For the year ended December 31, 2022, cash, restricted cash and cash equivalents decreased by $62,466.
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.
The increase in the average settlement price was primarily attributable to an 8% higher average sales price of units in backlog entering 2023 compared to backlog entering 2022, coupled with a 10% increase in the average sales price of New Orders during the first six months of 2023 compared to the same period in 2022.
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 decrease in the number of units settled was primarily attributable to a 28% lower backlog unit balance entering 2023 compared to the same period in 2022, offset partially by a higher backlog turnover rate. The gross profit margin percentage in 2023 decreased to 24.3% from 25.8% in 2022 .
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 effective tax rate is primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $153.6 million and $50.3 million for 2023 and 2022, 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 $95,100 and $153,600 for 2024 and 2023, respectively.
The increase in the average sales price of New Orders was attributable to a shift in New Orders to higher priced markets within the segment, coupled with a shift to higher priced communities in certain markets. Mid East The Mid East segment had an approximate $85,400, or 25%, decrease in segment profit in 2023 compared to 2022.
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 decrease was primarily attributable to a 7% decrease in the number of loans closed, driven by a 9% decrease in the homebuilding segment’s number of homes settled in 2023 as compared to 2022.
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.
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.
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.
For the year ended December 31, 2023, we repurchased 181,499 shares of our common stock at an aggregate purchase price of $1,081,815. As of December 31, 2023, we had approximately $675,870 available under Board approved repurchase authorizations.
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.
Other than those units that are cancelled, we expect to settle substantially all of our December 31, 2023 backlog during 2024.
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.
The decrease in segment profit was driven by a decrease in segment revenues of approximately $423,700, or 20%, coupled with a decrease in gross profit margins. Segment revenues decreased due to a 20% decrease in settlements year over year, offset partially by a 1% increase in the average settlement price.
The increase in segment profit was driven by an increase in segment revenues of approximately $138,200, or 8%, coupled with an increase in gross profit margins year over year. Segment revenues increased due to a 4% increase in settlements year over year, coupled with a 3% increase in the average settlement price.
New orders, net of cancellations (“New Orders”) during 2023 were 21,729, an increase of 13% from 2022 while our average New Order sales price decreased 3% to $448.4 in 2023.
New orders, net of cancellations (“New Orders”) during 2024 were 22,560, an increase of 4% from 2023 while our average New Order sales price increased 2% to $457.7 in 2024.
Selling, general and administrative ("SG&A") expenses in 2023 increased by approximately $56,600 compared to 2022, and as a percentage of revenue increased to 6.3% in 2023 from 5.2% in 2022. The increase in SG&A expense was due primarily to an increase of approximately $42,400 in personnel costs attributable in part to higher earned incentive compensation.
Selling, general and administrative ("SG&A") expenses in 2024 increased by approximately $9,200 compared to 2023, and as a percentage of revenue decreased to 5.8% in 2024 from 6.3% in 2023. The increase in SG&A expense was due primarily to an increase of approximately $21,000 in personnel costs attributable to an increase in headcount year over year.
Our net income for 2023 was $1,591,611, or $463.31 per diluted share, decreases of 8% and 6% compared to 2022 net income and diluted earnings per share, respectively. Our homebuilding gross profit margin percentage was 24.3% in 2023 compared to 25.8% in 2022. Settlements for the year ended December 31, 2023 totaled 20,662 units, a decrease of 9% from 2022.
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.
We expect continued tax rate volatility in future years attributable to the recognition of excess tax benefits from equity plan activity and distributions from the deferred compensation plans. Recent Accounting Pronouncements Pending Adoption See Note 1 to the accompanying consolidated financial statements for discussion of recently issued accounting pronouncements applicable to us.
We expect continued tax rate volatility in future years attributable to the recognition of excess tax benefits from equity plan activity and distributions from the deferred compensation plans.
Lots Controlled and Land Deposits: As of December 31, 2023 2022 Total lots controlled: Mid Atlantic 46,000 48,200 North East 14,300 11,300 Mid East 22,200 21,800 South East 59,000 50,600 Total 141,500 131,900 As of December 31, 2023 2022 Contract land deposits, net: Mid Atlantic $ 222,922 $ 212,273 North East 61,182 54,558 Mid East 46,804 44,813 South East 253,292 191,332 Total $ 584,200 $ 502,976 Mid Atlantic The Mid Atlantic segment had an approximate $248,700, or 25%, decrease in segment profit in 2023 compared to 2022, driven by a decrease in segment revenues of approximately $576,400, or 12%, coupled with a decrease in gross profit margins.
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.
We had additional funding commitments totaling approximately $11,500 to one of the JVs at December 31, 2023. Land Under Development We owned land with a carrying value of approximately $36,900 that we intend to develop into approximately 1,750 finished lots.
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.
Gross profit margins were negatively impacted primarily by higher incentives and closing costs, offset partially by lower lumber costs. Segment New Orders increased 4% while the average sales price of New Orders decreased 1% in 2023 compared to 2022.
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.
Seasonality We generally have higher New Order activity in the first half of the year and higher home settlements, revenues and net income in the second half of the year. However, since 2020 our typical seasonal New Order and settlement trends have been affected by the pandemic, supply chain disruptions and the significant fluctuations in mortgage interest rates.
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. However, in recent years our typical seasonal trends have been affected by significant changes in market conditions.
Cash was provided from stock option exercise proceeds totaling $196,717. At December 31, 2023 and 2022, restricted cash totaled $52,550 and $51,429, respectively. Restricted cash was attributable to customer deposits for certain home sales and cash collected from customers for loans in process and closed mortgage loans held for sale.
Restricted cash was attributable to customer deposits for certain home sales and cash collected from customers for loans in process and closed mortgage loans held for sale.
Segment profits were favorably impacted by an increase in segment revenue of approximately $55,700, or 6%. The increase in segment revenues was attributable to an 8% increase in the average settlement price.
Segment profits were favorably impacted by an increase in segment revenue of approximately $217,600, or 23%. Segment revenues were favorably impacted by a 13% increase in the number of units settled and an 8% increase in the average settlement price year over year.
We employ a quality control department to ensure that our underwriting controls are effective, and further assess the underwriting function as part of our assessment of internal controls over financial reporting. 21 Table of Contents 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.
We believe that all of the loans that we originate are underwritten to the standards and specifications of the ultimate investor to whom we sell our originated loans. We employ a quality control department to ensure that our underwriting controls are effective, and further assess the underwriting function as part of our assessment of internal controls over financial reporting.
This favorable impact was offset partially by the recognition of previously deferred home package costs that included higher priced lumber. Mortgage Banking Segment We conduct our mortgage banking activity through NVRM, a wholly owned subsidiary. NVRM focuses almost exclusively on serving the homebuilding segment customer base.
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.
The segment’s gross profit margin percentage remained relatively flat. Segment New Orders and the average sales price of New Orders increased 12% and 9%, respectively, in 2023 compared to 2022. New Orders were impacted by higher absorption rates attributable to improved demand as previously discussed in the "Consolidated Homebuilding" section above.
The segment’s gross profit margin percentage remained relatively flat. 18 Table of Contents Segment New Orders and the average sales price of New Orders increased 6% and 9%, respectively, in 2024 compared to 2023.
These properties are controlled with cash deposits and letters of credit totaling approximately $13,000 and $100, respectively, as of December 31, 2023, of which approximately $3,800 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 $20,400 as of December 31, 2024, of which approximately $8,400 is refundable if we do not perform under the contract.
Segment revenues decreased due primarily to an 11% decrease in the number of units settled and a 1% decrease in the average settlement price. The decrease in settlements was primarily attributable to a 25% lower backlog unit balance entering 2023 compared to backlog entering 2022.
The increase in settlements was primarily attributable to a 16% higher backlog unit balance entering 2024 compared to backlog entering 2023. The increase in the average settlement price was primarily attributable to a 9% higher average sales price of units in backlog entering 2024 compared to backlog entering 2023.
New Orders were favorably impacted by improved demand in 2023 attributable to a limited supply of homes in the resale market and by a 3% increase in the average number of active communities.
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.
Gross profit margins were negatively impacted by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs. New Orders increased 13% while the average sales price of New Orders decreased 3% in 2023 when compared to 2022.
Gross profit margins were negatively impacted by higher lot costs and closing cost assistance. New Orders and the average sales price of New Orders increased 4% and 2%, respectively, in 2024 when compared to 2023, despite the number of active communities remaining flat year over year.
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 22,700 lots. Some of these properties may require rezoning or other approvals to achieve the expected yield.
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.
At December 31, 2023 and 2022, we had repurchase reserves of approximately $18,600 and $21,800, respectively. NVRM is dependent on our homebuilding operation’s customers for business. If new orders and selling prices of the homebuilding segment decline, NVRM’s operations will also be adversely affected.
If new orders and selling prices of the homebuilding segment decline, NVRM’s operations will also be adversely affected.
In addition, SG&A expense was higher due to an increase in equity-based compensation of approximately $13,800 due to the issuance of a four year block grant of non-qualified stock options to purchase shares of NVR common stock ("Options") and restricted stock units ("RSUs") in the second quarter of 2022.
These increases were partially offset by a $24,000 decrease in equity-based compensation year over year due primarily to the non-qualified stock options to purchase shares of NVR common stock ("Options") and restricted stock units ("RSUs") issued as part of the 2018 four-year block grant being fully vested as of December 31, 2023.
Segment profit in 2023 increased by approximately $12,600, or 10%, from 2022, which was primarily attributable to an increase in net interest income and a decrease in general and administrative expenses. Net interest income increased by approximately $4,800, or 41%, due to higher interest rates in 2023 when compared to 2022.
Segment profit in 2024 increased by approximately $20,900, or 15%, from 2023, which was primarily attributable to an increase in mortgage banking fees, partially offset by an increase in general and administrative expenses. Mortgage banking fees increased by approximately $28,500, or 14%, due to higher gains on sales of loans.
New Orders were favorably impacted by higher absorption rates attributable to improved demand as previously discussed in the "Consolidated Homebuilding" section above and by a 4% increase in the average number of active communities. North East The North East segment had an approximate $11,700, or 7%, increase in segment profit in 2023 compared to 2022.
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.
The increase in New Orders was primarily attributable to a 24% increase in the average number of active communities year over year. In addition, New Orders were impacted favorably by higher absorption rates attributable to improved demand as previously discussed in the "Consolidated Homebuilding" section above.
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 segment profit was primarily driven by a decrease in segment revenues of approximately $67,800, or 3%, coupled with a decrease in gross profit margins. Segment revenues decreased due to a 4% decrease in the average settlement price, partially offset by a 1% increase in settlements.
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.
The decrease in settlements was largely attributable to a 39% lower backlog unit balance entering 2023 compared to the backlog unit balance entering 2022, offset partially by a higher backlog turnover rate. The segment’s gross profit margin percentage decreased to 21.6% in 2023 from 22.2% in 2022.
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.
Net cash provided by operating activities was $1,870,101, due primarily to cash provided by earnings in 2022 and by a decrease in inventory of $159,091 attributable to a decrease in units under construction at December 31, 2022 compared to December 31, 2021.
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.

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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) 2024 2025 2026 2027 2028 Thereafter Total Fair Value Mortgage banking segment Interest rate sensitive assets: Mortgage loans held for sale $ 216,211 — — — — — $ 216,211 $ 222,560 Average interest rate 6.5 % — — — — — 6.5 % Other: Forward trades of mortgage-backed securities (a) $ (18,297) — — — — — $ (18,297) $ (18,297) Forward loan commitments (a) $ 60,982 — — — — — $ 60,982 $ 60,982 Homebuilding segment Interest rate sensitive assets: Interest-bearing deposits $ 3,085,220 — — — — — $ 3,085,220 $ 3,085,220 Average interest rate 5.3 % — — — — — 5.3 % Interest rate sensitive liabilities: Fixed rate obligations $ — — — — — $ 900,000 $ 900,000 $ 803,646 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 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.
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 at December 31, 2023.
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.
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. At December 31, 2023, 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, 2024, there was no debt outstanding under our credit facility or loan repurchase facility.

Other NVR 10-K year-over-year comparisons