What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-14 · 62 added, 45 removed, 254 unchanged (30% of the section changed)

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• employment levels and job and personal income growth;

• the supply of and prices for available new or existing homes (including lender-owned homes acquired through foreclosures and short sales) and other housing alternatives, such as apartments and other residential rental property;

• availability and pricing of financing for homebuyers;

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• federal and state personal income tax rates and provisions, including provisions for the deduction of residential consumer mortgage loan interest payments and other expenses;

• homebuyer interest in our current or new product designs and community locations, and general consumer interest in purchasing a home compared to choosing other housing alternatives;

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We cannot predict their occurrence or severity, nor can we provide assurance that our strategic responses to their impacts would be successful.

Housing market conditions improved in 2024, as interest rates continued to hover around 7% and consumer confidence continued to improve.

However, any decline in the homebuilding and mortgage lending industries and overall economy could decrease the market value of our inventory which could have a negative impact on our gross margins from home sales.

Housing market conditions were challenging in 2025 and consumer confidence weakened as affordability concerns were exacerbated by elevated mortgage interest rates and uncertain trade policies.

Declines in the homebuilding and mortgage lending industries and overall economy could decrease the market value of our inventory which could have a negative impact on our gross margins from home sales as we experienced in 2025 compared to 2024.

We recorded an aggregate charge of $47.7 million during 2025 that included $11.8 million of write-offs of land deposits and pre-acquisition costs for land we no longer intend to purchase and $35.9 million of inventory impairments.

Of these charges, $6.7 million and $41.0 million were attributable to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively.

A reduction in our gross margins from home sales could have a significantly negative impact on our financial position and results of operations.

Additional external factors, such as foreclosure rates, mortgage availability, high inflation, and unemployment rates, could also negatively impact our results.

Additional external factors, such as foreclosure rates, mortgage availability, high inflation, competition and unemployment rates, could also negatively impact our results.

Increased mortgage interest rates have made it increasingly difficult for potential customers to qualify for sufficient financing, which is contributing to the affordability issues negatively impacting the homebuilding and mortgage lending industries.

Customers may be less willing or able to buy our homes if these conditions continue to impact the homebuilding industry.

We closely monitor our sales prices and offer sales incentives and mortgage rate buydown programs and adjust base sales prices in certain circumstances and in certain communities, which negatively impacted our sales prices and gross margins in 2024.

We closely monitor our sales prices and offer sales incentives and mortgage rate buydown programs and adjust base sales prices in

certain circumstances and in certain communities, which negatively impacted our sales prices and gross margins in 2025.

We may or may not continue to offer these incentives in 2026.

In the future, our pricing strategies may be limited by market conditions.

We may be unable to change the mix of our home offerings, reduce the costs of the homes we build or offer more

affordable homes to maintain our gross margins or satisfactorily address changing market conditions in other ways.

We may be unable to change the mix of our home offerings, reduce the costs of the homes we build or offer more affordable homes to maintain our gross margins or satisfactorily address changing market conditions in other ways.

In addition, cancellations of home sales contracts in backlog may increase.

Although our absorption rate, cancellation rate and new contracts improved during 2024 compared to prior year, any decline in sales activity could adversely affect our results of operations, financial condition and cash flows.

Our absorption rate and new contracts declined in 2025 compared to prior year while our cancellation rate increased year over year.

Any further decline in sales activity could adversely affect our results of operations, financial condition and cash flows.

Our financial services business is closely related to our homebuilding business as it originates mortgage loans principally on behalf of purchasers of the homes we build.

If demand for our homes declines in the future, the financial results of our financial services segment will also decline.

If demand for our homes declines in the future, the financial results of our financial services segment may also decline.

Additionally, we may be subject to increased counterparty risks, including purchasers of mortgages originated by M/I Financial being unwilling or unable to perform their obligations to us.

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Increased competition can also result in us selling fewer homes or experiencing a higher number of cancellations by homebuyers.

If, for example, prices for new homes decline, competitors increase their use of sales incentives, interest rates increase, the availability of mortgage financing diminishes, current homeowners find it difficult to sell their current homes, homebuyers are concerned about rising inflation, or there is a downturn in local or regional economies or in the national economy, homebuyers may choose to terminate their existing home purchase contracts with us in order to negotiate for a lower price or because they cannot, or will not, complete the purchase and our remedies generally do not extend beyond the retention of deposits.

If, for example, prices for new homes decline, competitors increase their use of sales incentives, mortgage interest rates increase, the availability of mortgage financing diminishes, current homeowners find it difficult to sell their current homes, homebuyers are concerned about rising inflation, or there is a downturn in local or regional economies or in the national economy, homebuyers may choose to terminate their existing home purchase contracts with us in order to negotiate for a lower price or because they cannot, or will not, complete the purchase and our remedies generally do not extend beyond the retention of deposits.

These competitive pressures may negatively impact our future financial and operating results.

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To the extent that we are unable to adequately compete with other companies that originate mortgage loans, the results of operations of our mortgage operations may be negatively impacted.

Further reduction in the availability of mortgage financing or continued increases in mortgage interest rates or down payment requirements could adversely affect our business.

Mortgage interest rates have remained elevated since rising in 2022 after a period of historically low rates, which increased the costs of owning a home and reduced the demand for our homes.

Despite the Federal Reserve reducing rates by 100 basis points during the second half of 2024, mortgage rates continue to hover between 6% and 7%.

Any increases by the Federal Reserve could further increase the costs of owning a home and reduce the demand for our homes.

In addition, any reduction in the availability of the financing provided by Fannie Mae and Freddie Mac could adversely affect interest rates, mortgage availability and our sales of new homes and origination of mortgage loans.

Reductions in the availability of mortgage financing, continued elevated mortgage interest rates for prolonged periods and further increases in mortgage interest rates or down payment requirements could adversely affect our business.

Mortgage interest rates have remained elevated since rising in 2022 after a period of historical low rates, which has increased the costs of owning a home and reduced the demand for our homes.

Despite the Federal Reserve reducing rates by an additional 75 basis points during 2025, mortgage rates continue to hover between 6% and 7%.

Any rate increases by the Federal Reserve could further increase the costs of owning a home and reduce the demand for our homes.

Demand for new homes may also further decline or fail to improve if mortgage interest rates remain elevated for a longer period of time.

In addition, any reduction in the availability of the financing provided by Fannie Mae and Freddie Mac could adversely affect mortgage interest rates, mortgage availability and our sales of new homes and origination of mortgage loans.

FHA and VA mortgage financing support remains an important factor in marketing our homes.

Any increases in down payment requirements, lower maximum loan amounts, or limitations or restrictions on the availability of FHA and VA financing support could adversely affect interest rates, mortgage availability and our sales of new homes and origination of mortgage loans.

Any increases in down payment requirements, lower maximum loan amounts, or limitations or restrictions on the availability of FHA and VA financing support

could adversely affect mortgage interest rates, mortgage availability and our sales of new homes and origination of mortgage loans.

Even if potential customers do not need financing, changes in the availability of mortgage products may make it harder for them to sell their current homes to potential buyers who need financing, which may reduce demand for new homes.

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Economic conditions could require us to sell homes or land at a loss, hold land in inventory longer than planned or walk away from land that we no longer intend to purchase resulting in write-offs of land deposits, which could significantly impact our financial condition, results of operations, cash flows and stock performance.

We are required to periodically evaluate our inventory for potential impairment, which may result in additional valuation adjustments that could be significant and negatively impact our results of operations and financial condition.

We cannot make any assurances that the measures we employ to manage inventory risks and costs will be successful.

Additionally, we are required to periodically evaluate our inventory for potential impairment, which may result in valuation adjustments that could be significant and negatively impact our results of operations and financial condition.

We cannot make any assurances that the measures we employ to manage inventory risks and costs will be successful or that we will not record additional inventory impairment charges or write-offs of land deposits and pre-acquisition costs.

Supply shortages and risks related to the demand for labor and building materials could increase costs and delay deliveries.

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Inflation can have a long-term adverse impact on us because if our costs of land, materials and labor increase, we would need to increase the sale prices of our homes to maintain satisfactory margins.

As a result of the historically high rates of inflation we experienced in 2022 and into early 2023, we experienced increases in the costs of land, materials and labor.

We may continue to experience high rates of inflation in the future, and in a high inflationary environment, we may not be able to raise home prices enough to keep pace with the increased costs of land and house construction, which could reduce our profit margins.

Although inflation declined in 2025 compared to the past several years, many of the increases in costs that we experienced from 2022 through 2024 have persisted.

We may experience high rates of inflation in the future, and in a high inflationary environment, we may not be able to raise home prices enough to keep pace with the increased costs of land and house construction, which could reduce our profit margins.

Our limited geographic diversification could adversely affect us if the demand for new homes in our markets declines.

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Our limited geographic diversification could adversely impact us if the demand for new homes or the level of homebuilding activity in our current markets declines, since there may not be a balancing opportunity in a stronger market in other geographic regions.

Moreover, certain insurance companies doing business in states in which we operate could restrict, curtail or suspend the issuance of homeowners’ insurance policies on single-family homes.

This could both reduce the availability of hurricane, fire and other types of natural disaster insurance, in general, and increase the cost of such insurance to prospective purchasers of homes.

Mortgage financing for a new home is conditioned, among other things, on the availability of adequate homeowners’ insurance.

We may write off intangible assets, such as goodwill.

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We record warranty and other reserves for the homes we sell based on a number of factors, including historical experience in our markets, insurance and actuarial assumptions and our judgment with respect to the qualitative risks associated with the types of homes we build.

Because of the high degree of judgment required in determining these liability reserves, our actual future liability could differ significantly from our reserves.

We recorded $11.2 million in additional warranty claims in 2025 in two communities in Florida primarily relating to attic ventilation issues.

Because of the high degree of judgment required in determining these liability

reserves, our actual future liability could differ significantly from our reserves.

Given the inherent uncertainties, we cannot provide assurance that our insurance coverage, our subcontractor arrangements and our reserves will adequately address all of our construction defect, product liability and warranty claims.

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When we identify these defects, we repair them in accordance with our warranty obligations.

As mentioned above, we recorded an additional $11.2 million for warranty claims in two or our Florida communities primarily relating to attic ventilation issues.

Improper construction processes and defective products widely used in the homebuilding industry can result in the need to perform extensive repairs to large numbers of homes.

The cost of complying with our warranty obligations may be significant if we are unable to recover the cost of repairs from

subcontractors, materials suppliers and insurers.

The cost of complying with our warranty obligations may be significant if we are unable to recover the cost of repairs from subcontractors, materials suppliers and insurers.

We also can suffer damage to our reputation, and may be exposed to possible liability, if subcontractors fail to comply with applicable laws, including laws involving matters that are not within our control.

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Our indebtedness could adversely affect our financial condition, and we and our subsidiaries may incur additional indebtedness, which could increase the risks created by our indebtedness.

As of December 31, 2024, we had approximately $695.0 million of indebtedness (net of debt issuance costs), excluding issuances of letters of credit and our $300 million mortgage repurchase facility, with M/I Financial as borrower (the “MIF Mortgage Repurchase Facility”), and we had $569.6 million of remaining availability for borrowings under the Credit Facility.

As of December 31, 2025, we had approximately $696.3 million of indebtedness (net of debt issuance costs), excluding issuances of letters of credit, our $200 million mortgage repurchase facility, with M/I Financial as borrower (the “MIF Mortgage Repurchase Facility”) and our $100 million master repurchase facility, with M/I Financial as borrower (the “MIF Master Repurchase Facility), and we had $806.8 million of remaining availability for borrowings under the Credit Facility.

In addition, under the terms of the Credit Facility, the indentures governing the 2030 Senior Notes and the 2028 Senior Notes and the documents governing our other indebtedness, we have the ability, subject to applicable debt covenants, to incur additional indebtedness.

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• a significant portion of our cash flow may be required to pay principal and interest on our indebtedness, which could reduce the funds available for working capital, capital expenditures, acquisitions or other purposes;

• borrowings under the Credit Facility bear, and borrowings under any new facility could bear, interest at floating rates, which could result in higher interest expense in the event of an increase in interest rates;

• the terms of our indebtedness could limit our ability to borrow additional funds or sell assets to raise funds, if needed,

for working capital, capital expenditures, acquisitions or other purposes;

• the terms of our indebtedness could limit our ability to borrow additional funds or sell assets to raise funds, if needed, for working capital, capital expenditures, acquisitions or other purposes;

• our debt level and the various covenants contained in the Credit Facility, the indentures governing our 2030 Senior Notes and 2028 Senior Notes and the documents governing our other indebtedness could place us at a relative competitive disadvantage compared to some of our competitors;

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If we cannot obtain surety bonds when required, our results of operations and/or cash flows could be adversely impacted.

The M/I Financial repurchase facility will expire in 2025.

M/I Financial uses the MIF Mortgage Repurchase Facility to finance eligible residential mortgage loans originated by M/I Financial.

This facility will expire on October 21, 2025.

If we are unable to renew or replace the MIF Mortgage Repurchase Facility when it matures, the activities of our financial services segment could be impeded and our home sales and homebuilding and financial services results of operations may be adversely affected.

The M/I Financial repurchase facilities will expire in 2026.

M/I Financial uses the MIF Mortgage Repurchase Facility and the MIF Master Repurchase Facility to finance eligible residential mortgage loans originated by M/I Financial.

These facilities will expire on October 20, 2026.

If we are unable to renew or replace the MIF Mortgage Repurchase Facility or the MIF Master Repurchase Facility when they mature, the activities of our financial services segment could be impeded and our home sales and homebuilding and financial services results of operations may be adversely affected.

Capital allocation strategies could adversely affect our operating results and shareholder value.

Our goal is to allocate capital to maximize our overall long-term returns.

This includes growing profitability, improving balance sheet efficiency and generating returns above our cost of capital.

If we do not properly allocate our capital, we may fail to produce optimal financial results and we may experience a reduction in shareholder value, including increased volatility in the price of our common shares.

As part of our capital allocation strategy, from time to time we have returned, and may continue to return, value to our shareholders through share repurchases.

For example, during 2025 we repurchased 1.6 million outstanding common shares under our share repurchase programs at an aggregate purchase price of $202.0 million.

In addition, in November 2025 we announced a new share repurchase program that authorizes the Company to purchase up to $250 million of its outstanding common shares through open market transactions, privately negotiated transactions or otherwise in accordance with all applicable laws (the “Second 2025 Share Repurchase Program”).

The timing, amount and other terms and conditions of any

additional repurchases under the Second 2025 Share Repurchase Program is based on a variety of factors, including the market price of the Company’s common shares, business considerations, general market and economic conditions and legal requirements.

Decisions with respect to share repurchases are subject to the discretion of our Board of Directors and are based on a variety of factors, including the price and availability of our shares, trading volume, our earnings and financial condition, general market conditions and other capital allocation opportunities.

The share repurchase program may be suspended or discontinued at any time in the future without prior notice.

Repurchases under our share repurchase program may reduce the market liquidity for our common shares, potentially affecting its trading volatility and price.

Future share repurchases may also diminish our cash reserves, which may also impact our ability to pursue other opportunities.

We have financial needs that we meet through the capital markets, including the debt and secondary mortgage markets, and disruptions in these markets could have an adverse impact on our results of operations, financial condition and/or cash flows.

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If the non-defaulting lenders are unable or unwilling to cover or acquire a defaulting lender’s respective commitment, the borrowing and letter of credit capacities under our Credit Facility may be more limited.

In addition, if a buyer under the MIF Mortgage Repurchase Facility, which M/I Financial uses to fund mortgage originations, fails or is unable or unwilling to fulfill its obligations, M/I Financial’s borrowing capacity under the MIF Mortgage Repurchase Facility may be limited and have an adverse effect on our liquidity and ability to provide mortgage loans to our homebuyers.

In addition, if a buyer under the MIF Mortgage Repurchase Facility or the MIF Master Repurchase Facility, which M/I Financial uses to fund mortgage originations, fails or is unable or unwilling to fulfill its obligations, M/I Financial’s borrowing capacity under the MIF Mortgage Repurchase Facility or the MIF Master Repurchase Facility may be limited and have an adverse effect on our liquidity and ability to provide mortgage loans to our homebuyers.

Regulatory and Legal Risks

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These statutes, ordinances, rules and regulations may cause delays, may cause us to incur substantial compliance, remediation or other costs, and can prohibit or severely restrict development and homebuilding activity.

In addition, any failure to comply therewith could give rise to fines, penalties or other liabilities, obligations to remediate, permit revocations or other sanctions and have an adverse effect on our results of operations, financial condition or business.

Various advocacy groups and government agencies and the general public are increasingly focusing on the impact of climate change.

Government restrictions, standards and regulations intended to mitigate climate change, such as greenhouse gas emissions standards, are emerging and may increase in the future in the form of additional restrictions or regulations on land development and home construction in certain areas.

Such restrictions and regulations could increase our operating and compliance costs and have an adverse effect on our results of operations, financial condition or business.

ESG matters have also attracted increasing governmental and societal attention, which may expand our reporting, diligence, and disclosure on topics including climate change, waste production, water usage, human capital, labor, and risk oversight, and the nature, scope, and complexity of matters that we are required to control, assess, and report.

The rapidly evolving laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, relating to ESG matters including climate change may create challenges for the Company, alter the environment in which we do business and increase compliance costs, which could adversely impact our results of operations and cash flows.

In addition, any failure to comply therewith could

give rise to fines, penalties or other liabilities, obligations to remediate, permit revocations or other sanctions and have an adverse effect on our results of operations, financial condition or business.

We must also obtain licenses, permits and approvals from various governmental authorities in connection with our development activities, and these governmental authorities often have broad discretion in exercising their approval authority.

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administrative policy may strain international trade relations and lead to the imposition of non-tariff barriers or domestic preference procurement requirements and/or the imposition of retaliatory tariffs and other reactionary measures by foreign countries, including but not limited to Mexico, Canada, China and European countries.

On February 1, 2025, President Trump

signed executive orders imposing additional tariffs on Canada, Mexico and China under the International Emergency Economic Powers Act.

While the imposition of tariffs on Canada and Mexico was subsequently paused on February 3, 2025, uncertainty remains around the logistics of international trade in the future.

Any existing, new or increased tariffs could increase the cost of, and reduce the demand for, homes we build and any cost increases will either require us to increase prices or negatively impact our margins.

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We use information technology, digital communications and other computer resources to carry out important operational and marketing activities and to maintain our business records.

We have implemented systems and processes intended to address ongoing and evolving cyber security risks, secure our information technology, applications and computer systems, and prevent unauthorized access to or loss of sensitive, confidential and personal data.

We have implemented systems and processes intended to address ongoing and evolving cybersecurity risks, secure our information technology, applications and computer systems, and prevent unauthorized access to or loss of sensitive, confidential and personal data.

We adhere to the National Institute of Standards and Technology (“NIST”) CSF Framework to ensure we have proper controls in place to reduce our risk to cyber security threats.

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However, cyberattacks or other security breaches may remain undetected over an extended period of time and may not be addressed in a timely manner to minimize the impact, which could result in substantial costs.

Many of our information technology and other computer resources are provided to us and/or maintained on our behalf by third-party service providers pursuant to agreements that specify to varying degrees certain security and service level standards.

We also rely upon our third-party service providers to maintain effective cyber security measures to keep our information secure and to carry cyber insurance.

We also rely on our third-party service providers to maintain effective cyber security measures to keep our information secure and to carry cyber insurance.

Although we and our service providers employ what we believe are adequate security, disaster recovery and other preventative and corrective measures, our security measures, taken as a whole, may not be sufficient for all possible situations and may be vulnerable to, among other things, hacking, employee error, system error and faulty password management.

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A significant disruption in the functioning of these resources, or breach thereof, including our website, could damage our reputation and cause us to lose customers, sales and revenue.

In addition, breaches of our information technology systems or data security systems, including cyberattacks and malicious uses of artificial intelligence, could result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying and confidential information (including information we collect and retain in connection with our business about our homebuyers, business partners and employees), and require us to incur significant expense (that we may not be able to recover in whole or in part from our service providers or responsible parties, or their or our insurers) to address and remediate or otherwise resolve.

our business about our homebuyers, business partners and employees), and require us to incur significant expense (that we may not be able to recover in whole or in part from our service providers or responsible parties, or their or our insurers) to address and remediate or otherwise resolve.

The unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying or confidential information may also lead to litigation or other proceedings against us by affected individuals and/or business partners and/or by regulators, and the outcome of such proceedings, which could include losses, penalties, fines, injunctions, expenses and charges recorded against our earnings, could have a material and adverse effect on our financial condition, results of operations and cash flows and harm our reputation.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors