Company: LGIH
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001580670-25-000058
Chunk: 189

Company: LGI Homes, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part II, Item 7
Chunk 189
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 homes in backlog are currently under construction or complete. Ending backlog represents the number of homes in backlog from the previous period plus the number of net orders (new orders for homes less cancellations) generated during the current period minus the number of homes closed during the current period. Our backlog at any given time will be affected by cancellations, the number of our active communities and the timing of home closings. Homes in backlog are generally closed within one to two months, although home closings have been, and may continue to be, delayed. In addition, we may experience cancellations of purchase contracts at any time prior to closing. It is important to note that net orders, backlog and cancellation metrics are operational, rather than accounting data, and should be used only as a general gauge to evaluate performance. Backlog may be impacted by customer cancellations for various reasons that are beyond our control, and in light of our minimal required deposit, there is little negative impact to the potential homebuyer from the cancellation of the purchase contract. 

Our net orders decreased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to ongoing affordability constraints and other challenges in the overall housing market including muted consumer sentiment impacting customers’ willingness to purchase new homes.  As a result of the slower sales pace, the number of homes in our backlog at June 30, 2025 decreased 42.0% compared to June 30, 2024. 

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As of the dates set forth below, our net orders, cancellation rate and ending backlog homes and value were as follows (dollars in thousands):

Backlog DataSix Months Ended June 30,2025 (4)2024 (5)Net orders (1)2,528 3,541 Cancellation rate (2)24.2 %19.5 %Ending backlog – homes (3)808 1,393 Ending backlog – value (3)$322,466 $553,604 

(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