Company: LGIH
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0001580670-25-000043
Chunk: 90

Company: LGI Homes, Inc.
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 8
Chunk 90
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 31,2025 (4)2024 (5)Net orders (1)1,437 1,828 Cancellation rate (2)16.3 %16.8 %Ending backlog – homes (3)1,040 1,335 Ending backlog – value (3)$406,166 $519,507 

(1)Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period.

(2)Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period.

(3)Ending backlog consists of retail homes at the end of the period that are under a purchase contract that has been signed by homebuyers who have met our preliminary financing criteria but have not yet closed and wholesale contracts with varying terms.  Ending backlog is valued at the contract amount.

(4)As of March 31, 2025, we had 253 units related to bulk sales agreements associated with our wholesale business.

(5)As of March 31, 2024, we had 178 units related to bulk sales agreements associated with our wholesale business.

Land Acquisition Policies and Development

We had 146 and 151 active communities as of March 31, 2025 and December 31, 2024, respectively. Generally, it takes us two to three years to turn raw or undeveloped land into an active community. To mitigate our exposure to real estate inventory risks, we have utilized, on a limited and strategic basis, land banking financing arrangements.

Our lot inventory decreased to 67,792 owned or controlled lots as of March 31, 2025 from 70,899 owned or controlled lots as of December 31, 2024, primarily related to our discipline in the evaluation and selective approval of new land deals.

We have land banking financing arrangements with a third-party land banker to repurchase land that we sold to the land banker as a method of acquiring finished lots in staged takedowns, while limiting risk and minimizing the use of funds from our available cash or other financing sources. In consideration for this repurchase option, we paid a non-refundable commitment fee. Based on our right to control the ultimate economic outcome of these finished lots, these assets will continue to be held as real estate not owned within our inventory and a corresponding obligation was established within our accrued