Dream Finders Homes is looking to cut costs as a result of decreasing sales prices and shrinking margins.

The Jacksonville, Florida-based homebuilder and lender posted net income of $27.8 million for the three-month period ending June 30, falling 50.8% from $56.5 million a year earlier. Compared to the first quarter of 2026, profits more than doubled from $13.6 million, according to the company's earnings report.

This marked the third consecutive quarter Dream Finders' earnings per share missed expectations, coming in $0.03 shy at $0.27 as aggressive pricing tactics like mortgage buydowns have broadly lowered builder margins.

"The homebuilding market continues to be challenging, but our teams have worked hard to identify opportunities to improve our cost structure with the goal of delivering more affordable homes to our customers," Co-Chairman and CEO Patrick Zalupski said in a press release Thursday. "We believe costs will need to continue to trend down, perhaps significantly, to have a meaningful impact on market-wide housing results.

Homebuilding revenues for the second quarter totaled $1 billion, a 8% decrease from a year prior. The drop was driven by lower average selling prices, which fell from $481,027 to $438,171 from a year earlier as a result of changes in the company's geographic and product mix, it said. 

Selling, general and administration expense decreased 5% annually to $128 million from $135 million. But as a percentage of homebuilding revenues, it increased 50 basis points to 12.8% due to fewer homes sold per community and increased investments in technology and growth initiatives.

"We can streamline and right-size our operations to better manage our overhead costs in the current environment," Zalupski said. "This process is well underway, and we hope to be completed by year-end."

The price issues were partially offset by a 3% jump in home closings and 15% spike in net sales, each totaling a company record for the second quarter at 2,290 and 2,232, respectively. The cancellation rate also dropped from 14% to 11.1%. 

The number of sales and low cancellation rate demonstrated an ongoing commitment to delivering high-quality homes at affordable price points, supported by mortgage buydown programs and sales incentives, the company said.

Dream Finders' homebuilding gross margin percentage decreased to 14.2% from 16.5% in the quarter, primarily as the result of higher land and financing costs, according to its release. 

The homebuilder maintained its guidance of about 9,250 home closings for the full year. Its stock had dropped about 13.5% to $13.34 per share Thursday.

Acquisitions and new hirings

Dream Finders endured a tumultuous quarter in other ways aside from its earnings setback, engaging in hostile efforts to acquire Beazer Homes that proved unsuccessful during the period.

The company has had some other success in acquisitions, closing on its purchase of Alliant National Title in April, and the purchase of a remaining state in Cherry Creek Mortgage a month earlier. 

It also acquired Jet Home Loans in July 2024, which contributed to a $5 million, or 11%, increase in Dream Finders' financial services revenues in the second quarter. 

The homebuilder announced a few leadership moves in the quarter as well. It appointed Rick Beckwitt, as co-chairman, and Steve Fischer to its board of directors, along with Clint Szubinski as chief operating officer.