LGI Homes Narrows 2026 Closings Outlook After Sales Slow

The Tip Desk · November 10, 2026 · 3 min read

Third-quarter homebuilding revenue reached $437.5 million as the company now expects 4,600 to 4,800 closings for the year.

LGI Homes, Inc. (LGIH) reported third-quarter 2026 homebuilding revenues of $437.5 million, up 10.3% year over year, and narrowed its 2026 closings outlook to 4,600 to 4,800 homes after slower sales activity in the third quarter, citing affordability pressures that continued to weigh on demand.

The homebuilder said it is maintaining the remainder of its full-year 2026 guidance, including homebuilding gross margin of 19.0% to 21.0% and adjusted homebuilding gross margin of 22.5% to 24.5%, as well as average sales price of $360,000 to $370,000.

Year-over-year closings growth accelerated in the third quarter. Total home closings were 1,222, including 33 currently and previously leased homes, up 10.4% from a year earlier, after an 8.8% year-over-year increase in the second quarter. Home closings of 1,189 rose 11.6% year over year, after a 3.2% increase in the prior quarter.

Homebuilding revenues were $437.5 million, up 10.3% year over year, after a 3.7% year-over-year increase in the second quarter. Total revenues were $444.5 million, up 10.2%. Average sales price per home closed was $367,962, down 1.2% year over year, after a 0.5% year-over-year increase in the second quarter.

Homebuilding gross margin was 20.2% of homebuilding revenues, up 40 basis points sequentially from 19.8% in the second quarter. Adjusted homebuilding gross margin was 23.7%, up 50 basis points sequentially from 23.2% in the second quarter. Chairman and Chief Executive Officer Eric Lipar said both figures were above the midpoint of previous guidance ranges and reflected the company’s predominantly self-developed, on-balance-sheet land position, a disciplined approach to balancing affordability and profitability, and cost management.

SG&A expenses declined on an absolute-dollar basis, and SG&A as a percentage of total revenues improved 180 basis points year over year. Net income was $24.6 million, or $1.05 a share, compared with $27.0 million, or $1.16 a share, in the second quarter.

The company ended the quarter with 151 active communities, a 7.1% increase compared with the same time last year. Net debt to capital ratio was 40.6% at September 30, 2026, a 420 basis point improvement year over year. Total liquidity was $447.7 million, including cash and cash equivalents of $69.4 million and $378.3 million of availability under the revolving credit facility.

Lipar said the company continues to see interest in homeownership and is leaning into sales and marketing strategies to improve sales pace while maintaining its approach to affordability and profitability. As it heads into the final quarter, he said affordability remains the key consideration for buyers and that the company has intentionally broadened its sales process to work with more prospective customers who may need additional time to qualify.

The outlook assumes general economic conditions, including input costs, materials, product and labor availability, interest rates and mortgage availability, remain similar to those experienced to date in 2026, and that construction costs, land availability and land development costs are consistent with recent experience. It does not take into account additional changes to U.S. trade policies, including tariffs and duties on homebuilding products.