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M/I Homes cuts gross margin to speed up spec home sales
In Q2 2026, spec homes drove 78% of sales, with gross margin falling to 22.0% as revenue grew 15% year over year.
M/I Homes is prioritizing spec-driven speed to keep homebuilding deliveries aligned with buyer demand, even as it accepts lower profitability, HousingWire reports. The strategy is designed to protect sales momentum by putting more homes in place before contracts are signed.
In Q2 2026, the builder said total sales rose 15% year over year while gross margin fell to 22.0%, down from 24.7%. HousingWire also notes that 78% of sales came from spec homes during the quarter.
The outlet says M/I is effectively trading some margin for growth by using demand incentives, including mortgage-rate buydowns, closing-cost assistance, and price incentives. HousingWire argues the approach is broader than just buying volume, emphasizing how reducing the time between a buyer’s decision and home delivery can be a competitive advantage in an uncertain housing market.
HousingWire frames the economics as potentially rational even with lower margin, using M/I Homes 2025 revenue of $4.4 billion as a baseline. It estimates that a 15% revenue increase to $5.06B at a 22.0% gross margin would yield about $1.113 billion in gross profit, compared with about $1.087 billion at the prior 24.7% gross margin, implying roughly $26.4 million in additional gross profit despite a 2.7 percentage point margin drop.