Company: HOVVB
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0001753926-25-001938
Chunk: 40

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-12-22
Form: 10-K
Item: Item 6
Chunk 40
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, volatility in
the broader economy and affordability constraints caused many consumers to
delay purchasing a new home. As a result of this more difficult sales
environment, we experienced a decrease in net contracts compared to fiscal 2024. Even as mortgage rates increased and we focused on increasing sales
pace versus price, we were still able to raise net prices in approximately 36% of our communities during the fourth quarter of fiscal 2025. 

There remains a great degree of
uncertainty due to inflation, tariffs, the continued possibility of an economic
recession, employment risk and the potential for further mortgage rate
increases. While we continue to experience certain supply chain issues, we remain
focused on continuing to shorten our construction cycle times and building on
our national initiatives to drive down costs with our material providers and
trade partners. The changing conditions in the housing market, and in the
general economy, make it difficult to predict how strongly our business will
be impacted by these external factors over fiscal 2026 and
beyond.

Our cash position allowed us to spend $859.4 million on land purchases and land development for long-term growth during fiscal 2025 and still have total liquidity of $404.1 million, including $272.8 million of homebuilding cash and cash equivalents and $125.0 million of borrowing capacity under our senior secured revolving credit facility as of October 31, 2025. In addition, our September 2025 issuance of $900.0
million in aggregate amount of senior unsecured notes to refinance all of our
senior secured notes and secured term loan facility contributed to our ongoing
efforts to manage and simplify the Company’s capital structure and strengthen
its financial position. 

Additional information on our results for the year ended October 31, 2025 were as follows: 

● For the year ended October 31, 2025, sale of homes revenues decreased 0.8% as compared to the prior year, due to a 3.5% decrease in average sales prices, partially offset by a 2.8% increase in homes delivered. The increase in deliveries in fiscal 2025 was primarily the result of a 7.7% increase in community count as well as an increase in QMI contracts.

● Homebuilding gross margin percentage decreased from 18.7% for the year ended October 31, 2024 to 12.7% for the year ended October 31