LGI’s cancellation rate hit 48.9% as Century’s locked loans averaged about 4.9%
Two builders of lower-priced homes are paying heavily to keep deals together, which gives entry-level buyers room to ask for a lower rate and a finished home.
By Katia Clara · · 3 min read
LGI Homes canceled 48.9% of its contracts in the first nine months of the year, up from 28.1% a year earlier [3]. Its backlog shrank to 685 homes worth $273.7 million from 1,305 homes worth $498.7 million [3].
At Century Communities, Executive Chairman Dale Francescon said higher rates and inflation weighed on “first-time homebuyers in particular” [1].
Century cut prices by 10% and bought a Dallas builder
Century delivered 2,442 homes, 1.8% fewer than a year earlier, at an average of $345,000, down from $384,200 [1]. Inventory impairments rose to $19.6 million from $3.2 million, and net income fell to $12.6 million from $37.4 million [1].
Its Century Complete brand grew revenue 4.5% to $234.4 million, we calculate, while the West segment swung to a $13.5 million pretax loss [2]. On Oct. 7, Century bought HistoryMaker Homes for about $160.2 million in initial cash, adding 29 communities to Texas [2].
| Q3 2026 | Century Communities | LGI Homes |
|---|---|---|
| Homes closed | 2,442 (−1.8%) | 1,189 (+11.6%) |
| Average price | $345,000 | $367,962 |
| Gross margin | 15.0% (17.9% a year ago) | 20.2% (21.5% a year ago) |
| Adjusted gross margin | 19.3% | 23.7% |
| Communities at quarter end | 343 | 151 |
| Backlog, homes | 1,106 | 685 |
| Lots owned and controlled | 60,969 | 58,400 |
LGI closed more homes but has a large stock of finished houses
LGI closed 1,189 homes, 11.6% more than a year earlier, and earned $24.6 million [3]. CEO Eric Lipar said “affordability remains the key consideration for today’s buyers” [3].
LGI held 2,147 completed homes, including information centers, and 1,626 homes under construction at Sept. 30 [3]. We calculate about 14 completed homes for each of its 151 communities. LGI also had 85 homes under bulk sales agreements, up from 60 a year earlier [3].
How to use this
For first-time buyers
- Ask the builder to quote its financed rate and the dollar cost of reaching it. On a $345,000 home with 10% down, we calculate principal and interest at about $2,116 a month at Freddie Mac’s 7.24% average [4] and about $1,648 at 4.9%, the average rate in Century’s locked loan pipeline [2].
- Request a completed home and a closing date inside 30 days. LGI had about 14 finished homes per community at Sept. 30 [3].
- Get full loan approval in writing before you sign. LGI’s nine-month cancellation rate of 48.9% [3] shows how often contracts at that builder fell apart before closing.
For land and lot sellers
- Offer Century an option structure. It controls 45.1% of its 60,969 lots through options, up from 41.4% a year ago [1].
- Expect less interest from LGI in new land. By our math LGI owns 86% of its 58,400 lots [3], and it guides to 150 to 160 communities at year-end, close to the 151 it has now [3].
For investors and lenders
- Compare LGI’s guidance with its backlog. It narrowed full-year closings to 4,600 to 4,800 at an average price of $360,000 to $370,000 [3], with only 685 homes in backlog.
- Watch Century’s mortgage pipeline. Its lock commitments totaled $152.6 million in principal [2], and the 4.9% average rate sits more than two points below the market.
This is market commentary, not investment advice.
Sources
- [1]Century Communities, Inc., Century Communities reports third quarter 2026 results (SEC Form 8-K, Exhibit 99.1), Oct 28, 2026.
- [2]Century Communities, Inc., Quarterly report for the period ended Sept. 30, 2026 (SEC Form 10-Q), Oct 28, 2026.
- [3]LGI Homes, Inc., LGI Homes reports third quarter 2026 results (SEC Form 8-K, Exhibit 99.1), Nov 3, 2026.
- [4]Freddie Mac, Primary Mortgage Market Survey, week of Oct. 29, 2026, Oct 29, 2026.
