M/I Homes doubles down on specs as other builders pull back

M/I Homes' decision to maintain a high percentage of spec homes in their sales mix is a notable strategy in the current market. While other builders are pulling back on spec homes due to economic uncertainty, M/I Homes is doubling down on this approach. This move has contributed to a 15% increase in closings, with 2,387 homes closed in the second quarter. The company's ability to drive sales through spec homes suggests that they are effectively managing their inventory and meeting demand from buyers.

The fact that M/I Homes' gross margin slipped to 22.0% is a reminder that the current market is highly competitive, and builders are facing pressure to balance sales volume with profitability. Despite this, the company's spec home strategy appears to be paying off, at least in terms of sales volume. It will be interesting to see how this approach plays out in the long term, particularly if market conditions continue to shift. As the market evolves, it's likely that other builders will be watching M/I Homes' strategy closely to see if it's a model that can be replicated.

As the industry continues to navigate economic uncertainty, it's likely that builders will be closely watching M/I Homes' performance to see if their spec home strategy is sustainable. The company's ability to drive sales volume through spec homes will be an important factor to watch, particularly if other builders begin to follow suit. Additionally, the impact of this strategy on M/I Homes' profitability will be closely monitored, as the company seeks to balance sales volume with gross margin. ASID professionals will want to keep a close eye on these developments, as they could have implications for the broader real estate market and the demand for design services.

Originally reported by housingwire.com. ASIDNews adds analysis for real estate & property readers.