Market Brief

Toll Brothers signed 5% more homes last quarter. It also sold fewer of them per community than a year ago.

Toll Brothers grew net signed contracts 5% last quarter, but contracts per community fell to 5.4 from 5.6 and adjusted gross margin dropped 190 points.

The daily read on the numbers that set Florida housing costs: tax policy, insurance, mortgage rates and construction, and what they mean for a buyer or seller in Northeast Florida this week.

The headline number is true and it is not the whole number

Toll Brothers reported its fiscal third quarter, ended July 31, on August 18. Chief executive Karl Mistry led with this: "We also grew net signed contracts by 5% year over year." That is accurate. Contracted homes came to 2,508 against 2,388 a year earlier, and contract value rose to $2.52 billion from $2.41 billion.

Four lines further down the same release is a figure that changes how the first one reads. Net signed contracts per community were 5.4 units, against 5.6 a year ago.

Toll is opening communities faster than it is selling homes. The company reaffirmed guidance to grow community count 8% to 10% in fiscal 2026, its third consecutive year at that pace, ending the year with 480 to 490 selling communities. Open 9% more stores, sell 4% less per store, and total sales rise about 5%. That is the arithmetic of the quarter.

This is not an accusation of anything. Both numbers are published by the company in the same table, and the per-community figure is a standard homebuilder disclosure precisely because the industry knows the headline total is a function of community count. It is a distinction worth making because the two numbers support very different conclusions about demand.

Everything below the top line moved the other way

The rest of the quarter, all against the same quarter last year:

• Net income $280.1 million, against $369.6 million. Down about 24%.
• Diluted earnings per share $2.97, against $3.73. Down about 20%.
• Home sales revenue $2.65 billion, against $2.88 billion. Down about 8%.
• Homes delivered 2,662, against 2,959. Down about 10%.
• Adjusted gross margin 25.6%, against 27.5%. Down 190 basis points.
• Selling, general and administrative costs 10.0% of home sales revenue, against 8.8%.
• Backlog $6.24 billion and 5,312 homes, against $6.38 billion and 5,492.

Margin down 190 points while the cost of running the business rose 120 points as a share of revenue is the shape of a builder paying to move product. Toll booked $17.7 million of inventory impairments inside home sales cost of revenues in the quarter, and a further $39.6 million of impairment ran through income from unconsolidated entities, against nothing in that line a year ago.

Two things did improve, and they belong in an honest account. Cancellations fell to 5.4% of contracts signed in the quarter from 7.5%, and to 2.6% of beginning-quarter backlog from 3.2%. Buyers who signed were more likely to close. Average delivered price held at $996,400 and the average price in backlog actually rose, to $1,174,400 from $1,161,000.

What one builder can and cannot tell you

Toll builds at the top of the market. Its average delivered home is a $996,400 house, which is roughly three times the median closed price in Northeast Florida. Nothing here transfers automatically to a $350,000 market, and a single company's quarter is not an industry.

What makes it worth reading anyway is that the pattern matches what the wider data has been saying. New-home sales and the builder-discount picture were covered separately in this newsroom: new homes are now running well below existing homes on price, and the July new-home sales release has the volume side. Toll's quarter is the same story told from the income statement: volume is being bought, and margin is the currency.

What it looks like in Northeast Florida

Our own realMLS records show the local version of a builder holding more finished product than it would like. In our analysis of standing builder inventory, a new-construction home finished in an earlier year than it closed took a median 106 days on market across January to July 2026, against 35 days for a resale, and closed at 95.6% of its original asking price against 99.2% for a home built to order.

The concession data points the same way. Builders in this market now pay buyer costs more often than homeowners do, at a median of $14,456 against $7,600 on a resale.

Toll itself is expanding here. Its Maris Cove community in Yulee, in Nassau County, was announced in August with 30 homesites and sales anticipated in early 2027, per the company's own release of August 13. Community count growth is not an abstraction in this region; it is arriving on the ground.

The rate backdrop has barely moved

Freddie Mac put the 30-year fixed at 6.65% in its survey for the week ending August 20, down from 6.67% the week before, with the 15-year at 5.95%. Daily trackers had the 30-year around 6.68% on August 26. This week's Freddie Mac survey publishes at noon on August 27 and is not reflected here.

The Federal Open Market Committee has held its target range at 3.5% to 3.75% for all of 2026 and next meets on September 16, after the September 4 employment report and the September 11 consumer price report. Anyone attributing this quarter's builder margin compression to an imminent change in rates is guessing. The rate has been roughly flat for months; the margin was not.

What this does not mean

It does not mean demand is collapsing. Toll's contract count rose, its cancellation rate improved and its backlog price rose. It does not mean the per-community figure is the true measure and the total is the false one; both are real, and a company that is deliberately investing in community growth will show exactly this pattern for a while whether demand is strong or weak. And it does not mean this reads across to the entry-level and mid-market builders who do most of the volume in Northeast Florida, because Toll does not compete there.

People also ask

What did Toll Brothers report for its fiscal 2026 third quarter?

For the quarter ended July 31, 2026, Toll Brothers reported net income of $280.1 million and $2.97 per diluted share, against $369.6 million and $3.73 a year earlier. Home sales revenue was $2.65 billion on 2,662 homes delivered, against $2.88 billion on 2,959 homes. Net signed contracts were $2.52 billion on 2,508 homes, against $2.41 billion on 2,388. Adjusted home sales gross margin was 25.6%, down from 27.5%. The company reaffirmed full-year guidance of roughly $10.5 billion in home sales revenue. Figures are as reported by the company on August 18, 2026, and are deemed reliable but not guaranteed.

Why do net signed contracts per community matter more than total contracts?

Because total contracts move with the number of stores a builder has open. Toll is growing community count 8% to 10% in fiscal 2026 and expects to end the year with 480 to 490 selling communities. A builder that opens roughly 9% more communities and sells roughly 4% fewer homes in each of them still books a total increase of about 5%. Contracts per community strips the store count out and measures how the average community is actually performing. Toll's fell to 5.4 units from 5.6.

Does a national builder's quarter say anything about the Jacksonville market?

Only indirectly, and with limits. Toll Brothers delivered homes at an average price of $996,400 last quarter, which is roughly three times the median closed price in Northeast Florida, so it competes in a segment most local buyers are not in. What travels is the pattern rather than the numbers: our own realMLS records show finished builder inventory in this region taking a median 106 days to sell against 35 for a resale, and closing at 95.6% of original asking price against 99.2% for a built-to-order home. Figures are per Momentum Research analysis of data provided by realMLS and are deemed reliable but not guaranteed.

The takeaway

The quotable line from Toll Brothers' quarter is that signed contracts rose 5%. The line worth keeping is that contracts per community fell, margin fell 190 basis points, deliveries fell 10% and earnings per share fell 20%. Growth came from opening more communities, not from more demand in each one. For a buyer in Northeast Florida, the practical translation is that a builder in this posture has room to negotiate, and is more likely to give it through incentives and closing costs than through the sticker price.

Sources: Toll Brothers, Inc., "Toll Brothers Reports FY 2026 Third Quarter Results," August 18, 2026, read in full at globenewswire.com; all Toll figures including net signed contracts per community are from that release. Toll Brothers Maris Cove announcement, August 13, 2026. Freddie Mac Primary Mortgage Market Survey, week ending August 20, 2026. Momentum Research analysis of data provided by realMLS for the Northeast Florida figures. Figures are as reported and are deemed reliable but not guaranteed. Equal Housing Opportunity.

Disclosure: Jon Brooks is a co-founder of Momentum Realty, a Florida real estate brokerage that owns and funds Florida Housing Intelligence. Momentum has a financial interest in Florida real estate transactions, including in markets named here. See our editorial standards.