M/I Homes, Inc.

What they do

M/I Homes designs, markets, constructs and sells single-family homes and attached townhomes to first-time, move-up, empty-nester and luxury buyers, primarily in planned development and mixed-use communities. It also sells land and lots. Financial services operations, through 100%-owned M/I Financial, LLC and wholly owned title subsidiaries, originate and sell mortgages and collect title insurance and closing fees for the company's homebuyers.

Revenue drivers

• Homebuilding (Northern and Southern regions) — Represents 97% of consolidated revenue in 2025 and 2024; averaged a $479,000 sales price on homes delivered in 2025, with 232 communities offered for sale at December 31, 2025.
• Financial services — Mortgage origination and sale plus title insurance and closing fees; accounted for 3% of consolidated revenues in 2025 and 2024.
• Land and lot sales — Homebuilding operations generate additional revenue from selling land and lots to third parties, alongside home closings.

Recent performance

In the second quarter of 2026, new contracts rose 15% to a second-quarter record 2,387, while homes delivered fell 6% to 2,206 and revenue declined 9% to $1.1 billion. Gross margin was 22%, pre-tax income was $104.6 million (including $4.2 million of inventory charges), and net income was $79.1 million, or $3.02 per diluted share, versus $121.2 million and $4.42 a year earlier. For the first half of 2026, pre-tax income was $193.7 million and net income $146.9 million, or $5.57 per diluted share. Second-quarter cancellation rate improved to 8% from 13% a year ago. Backlog at June 30, 2026 was 2,426 homes worth $1.31 billion, down 8% in value year over year, with an average sales price of $538,000.

Strategy

Management points to a quality geographic footprint, product diversity and focus on well-located communities as positioning for 2026. The company repurchased $50 million of common stock in the second quarter of 2026 and reported record shareholders' equity of $3.2 billion. It has no borrowings under its $900 million unsecured credit facility and a homebuilding debt-to-capital ratio of 18%, with net debt-to-capital of negative 1%. S&P upgraded the company's credit rating to BB+.

Risks

• Cyclical housing demand — The homebuilding industry is cyclical and affected by employment levels, consumer confidence, interest rates and the supply and pricing of new and existing homes.
• Affordability and mortgage rates — The company cites persistent affordability pressures from elevated mortgage interest rates, inflation and rising lot costs.
• Backlog and delivery mix — Backlog sales value fell 8% year over year to $1.31 billion at June 30, 2026, and second-quarter deliveries declined 6%, pressuring revenue.
• Tariffs and trade policy — Risk factors flag changes in trade policy such as new or increased tariffs and potential retaliatory tariffs as a factor that could affect results.

Outlook

CEO Robert H. Schottenstein said results were solid despite continued challenging market conditions, citing the record contract quarter, 22% gross margin, 10% pre-tax margin and 10% return on equity. He said the company is confident in long-term housing fundamentals and believes it is well positioned to have a solid 2026 given its footprint, product offering and community locations.