Century Communities Rides Strong Demand to Record-Breaking Quarter
Century Communities delivered a stellar fourth quarter and full year 2024, defying mortgage rate volatility with record-breaking home deliveries, sales revenue, and profitability. The company's strong performance was driven by a combination of factors, including its diversified community count, efficient operations, and innovative financing solutions.
Deliveries of 3,198 homes in the fourth quarter were not only the highest quarterly total in the company's history but also a testament to Century Communities' ability to meet the strong demand for new homes. This was achieved despite the volatility in mortgage rates that affected the industry throughout the year. The company's deliveries for the full year reached a record 11,007 homes, representing a 15% increase over the same period last year.
Adjusted gross margin rose by an impressive 80 basis points to 23.3%, driven by the company's effective cost management and leverage of fixed costs. This improvement was also reflected in its adjusted net income, which increased by 36% for the full year and 18% in the fourth quarter.
Century Communities' commitment to growth was evident through two strategic acquisitions completed and fully integrated in 2024. The company's organic growth strategy remains strong, with net new contracts increasing by 21% year-over-year to 10,676 homes. This momentum is expected to continue in 2025, with the company aiming for further improvements in its selling, general, and administrative expenses as a percentage of wholesale revenues.
The company's community count reached a record high of 322 communities, demonstrating its ability to scale and meet the growing demand for new homes. The average sales price remained low at approximately $390,000, making Century Communities' offerings more affordable than those of many other publicly traded homebuilders.
Innovative financing solutions were also key to the company's success. Its captive mortgage subsidiary, inspire home loans, provided financing options that helped make homes more affordable for entry-level buyers. In the fourth quarter, over 60% of the mortgages closed by inspire home loans were for FHA, USDA, or VA loans, which typically carry lower interest rates and down payment requirements.
The company's focus on affordability was reflected in its sales strategy, with nearly all homes built on a spec basis in the fourth quarter. This approach allowed Century Communities to reduce costs, maintain an appropriate supply of quick move-in homes, and provide buyers with certainty of financing at low market interest rates.
As the homebuilding industry continues to navigate challenges presented by mortgage rate volatility, Century Communities' strong performance provides a beacon of hope. The company's commitment to innovation, cost management, and customer satisfaction has enabled it to achieve record-breaking results in a year marked by uncertainty. As the company looks ahead to 2025, its focus on growth, profitability, and customer satisfaction is expected to continue driving success.
