M/I Homes, Inc. reported a decline in financial performance for the first quarter of 2025, with total revenue of $976.1 million, down 7% from $1.05 billion in the same period last year. The decrease was primarily attributed to an 8% drop in the number of homes delivered, totaling 1,976 homes, despite a slight increase in the average sales price from $471,000 to $476,000. Net income also fell by 19% to $111.2 million, or $3.98 per diluted share, compared to $138.1 million, or $4.78 per diluted share, in the prior year. The company's effective tax rate increased to 23.9% from 23.4% year-over-year.
In terms of operational metrics, M/I Homes experienced a 10% decline in new contracts, totaling 2,292 compared to 2,547 in the first quarter of 2024. The company’s gross margin decreased by 120 basis points to 25.9%, reflecting the impact of increased sales incentives and mortgage interest rate buydowns offered to homebuyers in response to challenging market conditions. The company’s financial services segment, however, achieved a record revenue of $31.5 million, up 17% from the previous year, driven by higher margins on loans sold.
M/I Homes has been actively managing its inventory and land acquisition strategies, ending the quarter with approximately 51,100 lots under control, an 8% increase from the previous year. The company opened 27 new communities while closing 21, resulting in a total of 226 active communities. The company plans to increase its average community count by about 5% throughout 2025. Additionally, M/I Homes invested $146 million in land acquisitions and $101.6 million in land development during the first quarter.
Looking ahead, M/I Homes anticipates continued challenges in the housing market due to elevated mortgage interest rates and affordability concerns. The company remains focused on managing overhead costs, controlling land spending, and selectively offering incentives to support homebuyer demand. Despite the current market conditions, M/I Homes maintains a strong balance sheet with shareholders' equity reaching a record high of $3 billion, positioning the company to navigate the uncertain economic landscape effectively.
About M/I HOMES, INC.
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