ARLINGTON, Texas, April 27, 2026, 05:28 CDT
Forestar Group’s shares kicked off the week with investors sorting out a firmer 2026 lot-delivery goal that’s been dialed in, while the developer’s revenue outlook hasn’t budged. The company just filed its quarterly results, showing second-quarter profit on the rise. The stock ended April 24 at $28.12, gaining 0.61% for the session.
Timing is the snag. Forestar moves finished residential lots to homebuilders, landing its business squarely where expensive mortgages, wary buyers, and builders’ hunt for affordable, shovel-ready land collide. Freddie Mac’s latest read put the average 30-year fixed mortgage at 6.23% as of April 23, a slight dip from 6.30% the week before—still elevated, so affordability remains front and center.
Forestar reported a 7% jump in second-quarter revenue to $374.3 million, and pre-tax income up 8% at $43.9 million. Net income attributable to the company came in at $32.1 million, or 63 cents per diluted share, a 2% increase.
Volume told a different story. The number of lots sold dropped 14% from last year to 2,938, according to the filing, even as the average price per lot climbed to $112,800 from $101,700. The company attributed the lower residential lot sales revenue to the volume decline, with some help from higher average prices, a result of changes in the regional mix.
Forestar narrowed its 2026 lot delivery outlook to 14,000 to 14,500 lots, trimming the top end from the previous 14,000-15,000 range. Revenue guidance remains unchanged at $1.6 billion to $1.7 billion, according to Chairman Donald J. Tomnitz, who pointed to “ongoing affordability constraints and cautious consumer sentiment” still weighing on new-home sales. Forestar Group Inc.
D.R. Horton’s grip on Forestar is still significant. As of March 31, the homebuilder held roughly 62% of Forestar’s common shares. During the quarter, Forestar delivered 2,450 lots to D.R. Horton, pulling in $284.4 million in residential lot revenue from those sales.
Forestar benefits from steady demand thanks to that tie-up, but most of its eggs are in a single basket. D.R. Horton reported 11% growth in second-quarter net sales orders, hitting 24,992 homes. Executive Chairman David Auld pointed to lingering affordability challenges and hesitant buyers, warning that sales incentives will likely stay high through fiscal 2026.
Forestar wrapped up the quarter holding 94,400 lots, either owned outright or under control. Of the lots it owns, 24,100 were already under contract for sale—potentially bringing in roughly $2.2 billion down the line. Another 18,100 lots carry a right of first offer for D.R. Horton.
Margin pressure remains a sticking point. Forestar reported $6.3 million in land purchase contract deposit and pre-acquisition cost write-offs for the quarter, a jump from $0.9 million the prior year. These write-offs hit when land deals fall apart or are likely to get scrapped, suggesting certain projects have slipped below return thresholds.
Chief Operating Officer Mark Walker told analysts gross profit margin landed at 21.4%, slipping from last year’s 22.6%—that figure factors in $6.3 million in land option charges. Chief Executive Andy Oxley described those charges as linked to “a handful of communities,” adding Forestar would “simply move on” from deals that don’t meet underwriting standards. The Motley Fool
The company’s liquidity position buys it time. Forestar wrapped up March holding $362.2 million in unrestricted cash, plus $672.1 million it could still borrow—adding up to roughly $1.0 billion in total liquidity. No senior notes come due within the next year.
NYSE:FOR shareholders now face the question: can the company convert its contracted backlog into actual deliveries, and hold onto margins in the process? A dip in mortgage rates offers some relief. Even so, FOR’s filings continue to highlight a housing market juggling uneven prices, uncertain sales velocity and shaky buyer confidence.
