Company: HOVVB
Filing Date: 2025-05-30
Form Type: 10-Q
Source: 0001753926-25-000907
Chunk: 14

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-05-30
Form: 10-Q
Item: Part I, Item 2
Chunk 14
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 million for the six months ended April 30, 2025 compared to the same periods in the prior year. The increase for the three and six months ended April 30, 2025 compared to the same periods in the prior year was primarily due to an increase in selling overhead from higher advertising costs and an increase in total compensation expense as a result of an increase in headcount from opening more communities along with the cost of annual merit increases. 

Homebuilding: Key Performance Indicators

Net Contracts Per Active Selling Community

Net contracts per active selling community for the three and six months ended April 30, 2025 were 11.2 and 20.8, respectively, compared to 13.9 and 24.2 for the same periods in the prior year, respectively. Our reported level of sales contracts (net of cancellations) was impacted by uneven demand caused by overall market uncertainty along with affordability constraints. 

Contract Cancellation Rates

The following table provides historical quarterly cancellation rates, which represents the number of cancelled contracts in the quarter divided by the number of gross sales contracts executed in the quarter, excluding unconsolidated joint ventures:

 Quarter  

2025

2024 

2023 

2022 

2021 

 First  

16
%
 
14
%
 
30
%
 
14
%
 
17
% 

 Second  

15
%
 
14
%
 
18
%
 
17
%
 
16
% 

 Third  

17
%
 
16
%
 
27
%
 
16
% 

 Fourth  

18
%

25
%

41
%

15
%    

33