Taylor Morrison Home Corp

What they do

Taylor Morrison designs, builds, and sells single-family homes across three operating segments: East, Central, and West. The company also operates Taylor Morrison Home Funding (TMHF), a mortgage lender; Inspired Title, a title insurance agency; and TMIS, an insurance agency, to support homebuyers. The financial services arm generates revenue through originating and selling residential mortgage loans and providing title and escrow services.

Revenue drivers

• East segment — Largest segment by closings revenue; in Q1 2026 generated $469.1 million in net home closings revenue on 869 homes closed at an average selling price of $540,000.
• West segment — Second-largest segment; Q1 2026 home closings revenue of $571.2 million on 841 homes at an average price of $679,000, with the highest average selling price across segments.
• Central segment — Smallest segment by revenue; Q1 2026 home closings revenue of $271.2 million on 558 homes at an average price of $486,000, the lowest average price.
• Financial services (TMHF, Inspired Title, TMIS) — Provides mortgage origination, title, and insurance services, acting as a sales tool and managing backlog quality; revenue is earned from originating and selling mortgages and through title/escrow and insurance agency fees.

Recent performance

For Q1 2026, Taylor Morrison reported net income of $99 million, or $1.01 per diluted share, and adjusted net income of $109 million, or $1.12 per diluted share. Home closings revenue fell 28.3% year over year to $1.31 billion on 2,268 closings (down 25.6%) as opening backlog was lower and the company shifted its sales mix. Home closings gross margin contracted to 20.0% (adjusted: 20.6%) from 24.0% in the prior-year quarter. Net sales orders were 2,914 at an average price of $603,000, and backlog grew 23% sequentially to 3,465 homes. Full-year 2025 revenue was $8.12 billion with net income of $782.5 million, down from 2024's $8.17 billion and $883.3 million, respectively.

Strategy

Management is refocusing on the entry-level, move-up, and resort lifestyle segments, with land investments concentrated in well-located core submarkets. The company plans to decrease quick move-in homes and increase to-be-built orders, which has reduced closings as the mix rebalances. Taylor Morrison intends to open more than 125 new communities in 2026 and is managing starts cadence and incentives to rebuild backlog. In Q1 2026, it invested $503 million in land and development and repurchased approximately 2.5 million shares for $150 million. The company emphasizes diversified consumer segments, with the resort lifestyle segment (Esplanade) growing year over year in Q1.

Risks

• High mortgage rates and inflation — Consumer apprehension driven by elevated mortgage rates and inflation has suppressed demand, reduced net sales orders, and increased cancellations across all segments.
• Elevated cancellation rate — Total company cancellation rate rose to 13.2% in 2025 from 9.5% in 2024, partly due to lower required customer deposits used to stimulate sales, which can lead to more cancellations.
• Backlog decline — Total backlog units and sales value fell 40.6% and 41.8% year-over-year at December 31, 2025, reducing future revenue visibility; Q1 2026 backlog remained down 31.6% year over year.
• Regulatory and data privacy costs — Compliance with state data privacy laws, especially in California, Nevada, Texas, and Colorado, has incurred costs that may increase significantly and could lead to penalties if noncompliance occurs.

Outlook

Management reaffirmed full-year 2026 guidance, expecting approximately 11,000 home closings, an average closing price of $580,000–$590,000, and a home closings gross margin (excluding inventory charges) of at least 20% in Q2. The company projects around 370 ending communities in Q2 and 365–370 for the full year, with homebuilding land investment of approximately $2 billion and share repurchases of about $400 million. Q2 2026 home closings are guided to 2,500–2,600 at an average price of approximately $575,000. Management expects a meaningful reacceleration in growth in 2027 and beyond.