Century Communities, Inc. (CCS) Risk Factors

Verbatim Item 1A Risk Factors from Century Communities, Inc.'s latest 10-K. Filing date: 2026-01-29. Accession: 0001576940-26-000005.

This page reproduces the company's own Item 1A Risk Factors text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.

Informational only - not investment advice. See Disclaimer.

Extracted from Item 1A Risk Factors to the first Item 1B/1C/2 boundary after HTML sanitization. Confidence: high. Source form: 10-K. Character span: 74078-153645.

Back to CCS company profile

ITEM 1A.RISK FACTORS

Our business, operating results, financial condition, stock price, and future prospects are subject to risks and uncertainties. The risks described below are not the only ones we face. Additional risks, including those not currently known or considered immaterial, could materially and adversely affect our business, operating results, and financial condition. This section contains “forward-looking statements” and should be read together with the “Cautionary Note about Forward-Looking Statements” section and the rest of this Form 10-K. The summary below is not complete and should be read together with the risk factors that follow.

Summary

Risks Related to our Homebuilding Business and Industry

Fluctuations in the demand for our homes may continue to materially affect our business, operating results, and financial condition.

Adverse changes in general economic conditions, including in particular inflation, interest rates, and employment rates, may continue to reduce the demand for our homes and, as a result, continue to have a material adverse effect on our business, operating results, and financial condition.

Since many of our homebuyers require mortgage financing, the sale of our homes is dependent upon the availability of affordable mortgage financing.

Our success depends upon our ability to successfully identify and acquire desirable land and lots at reasonable prices, manage our land and lot inventory, develop our communities within expected timeframes and budgets, and adapt to changing home buying patterns and trends, population growth rates, and other demographics.

Our geographic concentration exposes us to localized economic, regulatory, and environmental risks.

We face risks regarding utility, resource, raw material, and building supply shortages and price fluctuations.

Our homebuilding operations expose us to product liability, warranty, personal injury, environmental, and other liability risks, which may not be covered by or may exceed our insurance or contractual protections, and harm our reputation.

Adverse weather and geological conditions could increase costs, delay projects, and reduce housing demand.

Poor relations with our communities or other negative publicity could harm our business and reputation.

The homebuilding industry is cyclical, seasonal, and competitive.

A significant portion of our historical growth is due to acquisitions, which may not continue.

Risk Related to Our Multi-Family Rental Business

Our multi-family rental business, which is relatively new for us, is subject to many of the same risks associated with our core homebuilding business, as well as other additional risks, and may not be successful.

Risk Related to Our Financial Services Business

Our home sales depend on our Financial Services business and our ability to originate loans and resell them into the secondary market. This business subjects us to additional risks and is competitive.

Risks Related to Human Capital Management

Our failure to identify, recruit, retain, and develop highly skilled and competent personnel and contractors may adversely affect our standards of service and business.

We rely heavily on contractors, which exposes us to additional risks, and labor shortages, costs, or disruptions could cause project delays or increased costs.

Risks Related to Governmental, Regulatory, Legal and Compliance Matters

Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses, or limit our homebuilding or other activities.

We are subject to various laws and regulations, which may increase our costs and potential liability.

Risks Related to Our Indebtedness and Liquidity

Our business is capital-intensive and any difficulty in obtaining capital or refinancing our indebtedness, or the cost thereof, could impair our business and operating results.

We have substantial indebtedness, which restricts our operations and could adversely affect our business.

Risks Related to Tax Policies and Regulation

Tax policies and regulation, including with respect to tax benefits associated with homeownership or increases in property, sales, and other taxes, may adversely affect our operating results.

Risks Related to Ownership of our Common Stock

Our stock price can be volatile especially if we miss our guidance or fail to meet analyst expectations.

We cannot assure you we will continue to pay quarterly cash dividends at the current rate.

We have anti-takeover mechanisms that may discourage acquisition proposals.

Insider ownership and family relationships amongst our management may raise conflicts of interest.

General Risk Factors

We are subject to several other general risks, including without limitation, IT failures or data security breaches; the rise of artificial intelligence; and the possibility of becoming a target of activist investors.

Risks Related to our Homebuilding Business and Industry

Fluctuations in the demand for our homes may continue to materially affect our business, operating results, and financial condition.

Demand for our homes fluctuates, often due to factors beyond our control, including interest rates and Federal Reserve policy; inflation; consumer confidence and spending; employment levels; economic conditions; conditions in the financial, credit and mortgage markets; availability, cost and terms of mortgage financing; lending standards and regulatory requirements; availability and prices of new and existing homes; competition; demographic trends; changing consumer preferences; tariffs and geopolitical uncertainty; and other factors described in this Form 10-K and our other SEC filings. A decline in consumer confidence, economic uncertainty, and continued elevated interest rates contributed to reduced demand for our homes in 2025 compared to the prior year, adversely affecting our 2025 operating results, and this trend could continue in 2026 and beyond. Since demand for our homes is highly sensitive to factors beyond our control, any of these factors could materially and adversely affect our business, operating results, and financial condition. In a housing market downturn, reduced demand typically adversely affects our revenues and operating results and may result in inventory impairments and other write-offs, significant gross margin compression, and reduced profitability. At any particular time, we cannot accurately predict whether housing market conditions will improve, deteriorate, or continue as they exist at that time.

Adverse changes in general economic conditions may continue to reduce the demand for our homes and, as a result, continue to have a material adverse effect on our business, operating results, and financial condition.

The residential homebuilding industry is cyclical and highly sensitive to local, national and global economic conditions, including:

consumer confidence, employment levels, job growth, spending levels, wage and personal income growth, personal indebtedness levels, and household debt-to-income levels of potential homebuyers;

the availability, terms and cost of financing for homebuyers or restrictive mortgage standards, including private and federal mortgage financing programs, and governmental regulation of lending practices;

U.S. and global financial system and credit markets, including short- and long-term interest rates and inflation, bank failures, and any effects from potential U.S. government shutdowns or defaults;

housing demand from population growth, household formations, new home buying catalysts (such as marriage and children), second home buying catalysts (such as retirement), home sale catalysts (such as an aging population), demographic changes (including immigration levels and trends in urban and suburban migration), generational shifts, or otherwise, or perceptions regarding the strength of the housing market, and home price appreciation and depreciation resulting therefrom;

competition from other real estate investors with capital, including other real estate operating companies and developers, institutional investment funds, and companies focused on single-family rentals;

the supply of new or existing homes, including foreclosures, and other housing alternatives, such as apartments and other residential rental property, and the aging of existing housing inventory; and

real estate taxes and federal and state income tax provisions, including provisions for the deduction of mortgage interest payments.

These factors and others have in the past, and may in the future, reduce demand for and pricing of our homes, increase cancellations and our use of selling incentives, and put downward pressure on our margins and the value of our inventory, potentially leading to inventory impairments and otherwise materially adversely affecting our business, operating results, financial condition, and prospects. In 2025, reduced consumer confidence, tariff-related economic uncertainty, inflation, and recessionary concerns reduced demand for our homes

compared to the prior year and negatively impacted our operating results. If these conditions persist, the homebuilding market could experience a prolonged downturn, adversely affecting our business and operating results for multiple years. We cannot predict whether market or economic conditions will improve, deteriorate or remain unchanged at any given time.

Additionally, many homebuyers must sell existing homes to purchase new ones. Difficulties in doing so, due to weak economic conditions, elevated interest rates, oversupply of homes, restrictive lending standards, or other factors may reduce our home sales, increase cancellations, or force us to lower our prices or offer additional incentives thereby harming our operating results. Because we carry a significant number of spec homes, adverse conditions could require rapid price reductions and use of incentives to avoid excess inventory, further adversely affecting our operating results and financial condition.

Since many of our homebuyers require mortgage financing, the sale of our homes is dependent upon the availability of affordable mortgage financing.

Our home sales depend on homebuyers’ ability to obtain affordable mortgage financing. Reduced mortgage availability, tighter lending standards, or higher interest rates or other costs, particularly for first-time homebuyers, which is an important customer segment for us, could significantly reduce demand for our homes and negatively impact our business and operating results. Since the federal government plays a significant role in the mortgage market through Fannie Mae, Freddie Mac, the FHA and the VA, changes to these programs, such as stricter underwriting standards, higher insurance premiums, lower loan limits, or potential restructuring, privatization or elimination of Fannie Mae or Freddie Mac, could reduce liquidity in the mortgage market and limit the availability or increase the cost of long-term, fixed-rate loans. Any such changes could adversely affect interest rates, mortgage availability, and our home sales. Past periods of mortgage-market instability have shown that tightened credit standards, reduced investor appetite for mortgage-backed securities, and the elimination of certain loan products can materially reduce the pool of qualified buyers, especially first-time and move-up purchasers. Similar conditions in the future, including changes to federal programs or tax policies, could again depress demand for our homes. Additionally, since many homebuyers must sell existing homes to purchase new ones, limited mortgage financing or higher costs for could delay or prevent closings, adversely affecting our business and operating results.

Interest rate increases have adversely affected and could continue to adversely affect our revenues and other operating results.

Many of our homebuyers rely on mortgage financing, often through our Financial Services business. Historically low mortgage rates from 2020–2022 made the homes we sold more affordable, but rates have risen sharply since 2022 and remained high through 2025, reducing homeowner purchasing power and demand for our homes. Higher interest rates also typically decrease homebuyer confidence and hinder our ability to realize our backlog since our home purchase contracts typically provide customers with a financing contingency. Financing contingencies allow customers to cancel their home purchase contracts if they cannot obtain adequate financing. As a result, rising interest rates typically adversely affect our home sales and mortgage originations. In addition, monetary policy actions affecting interest rates or fiscal policy actions and new legislation related to taxation, spending levels, or borrowing limits, along with the related political debates, conflicts and compromises associated with such actions, may negatively impact the financial markets and consumer confidence. Such events in the past have and in the future could hurt the U.S. economy and the housing market, and in turn, adversely affect our operating results. In response to interest rate volatility and to maintain sales momentum, we have offered and may continue to offer increased incentives across our communities, such as discounts and financing promotions, which negatively impact our homebuilding margins.

Inflation has adversely affected and could continue to adversely affect our operating results.

Inflation increases our costs for land, materials, labor, and capital. If we cannot raise home prices enough to offset these higher costs, due to affordability constraints, competitive market conditions, sales prices being set months before delivery, or otherwise, our margins and other operating results could be adversely affected. Inflation is also often accompanied by higher interest rates, which can reduce housing demand. In addition, the announcements and implementation of widespread tariffs by the current U.S. Presidential Administration and retaliatory tariffs imposed in response thereto have resulted in and could continue to result in an inflationary environment having similar adverse effects. Future actions by the government to stimulate the economy may further increase the risk of inflation, which may have an adverse impact on our business and operating results. Inflation also reduces the purchasing power of our cash and increases our financing costs.

Employment rates affect home demand and loan delinquencies potentially adversely affecting our operating results.

People who are not employed, are underemployed, or are concerned about the loss of their jobs are less likely to purchase new homes, may be forced to try to sell their existing homes, or may face difficulties in making required mortgage payments. Therefore, an increase in unemployment or underemployment may lead to an increase in loan delinquencies and have an adverse impact on our business by both reducing the demand for our homes and increasing the supply of homes for sale, which also would adversely affect our Financial Services business, since it is dependent upon sales of our homes. In addition, an increase in unemployment or underemployment may result in increased default rates on mortgage loans we originated, which could expose us to repurchase obligations or other liabilities,

reduce our ability to sell or finance the loans we originate or on less favorable terms, lead us to impose stricter loan qualification standards, or result in us no longer being able to offer financing terms that are attractive to potential buyers, all of which would adversely affect our business and operating results.

Home cancellation rates have adversely affected and could continue to adversely affect our operating results.

Our backlog reflects the number and value of homes for which we have entered into a sales contract with a customer but have not yet delivered the home. The cancellation of these contracts by homebuyers negatively impacts the number of closed homes, net new home orders, home sales revenue, and our other operating results. An increase in cancellation rates will negatively impact our operating results and could lead to imprecise estimates related to our home deliveries and potentially inventory impairments. While cancellation rates during 2025 were below our historical range, significant cancellations in the past have had and in the future could again have a material adverse effect on our operating results as a result of lost revenue and the accumulation of unsold housing inventory. Home order cancellations can result from a number of factors, including declines or slow appreciation in the market value of homes, increases in the supply of homes available to be purchased, increased competition, higher mortgage interest rates, the inability of homebuilders to sell their existing homes or obtain suitable financing, including providing sufficient down payments, and adverse changes in economic conditions.

Our long-term growth depends upon our ability to successfully identify and acquire desirable land lots at reasonable prices for residential build-out.

Our future growth depends upon our ability to successfully identify and acquire attractive land lots for development of our homes at reasonable prices and with terms that meet our underwriting criteria. Availability of new lots may be limited by, among other factors, market conditions, competition, financing constraints, zoning and environmental restrictions, or sellers refusing to sell lots at reasonable prices or honor option contracts. There can be no assurance that an adequate supply of homebuilding lots will continue to be available to us on terms similar to those available in the past. We strategically balance our land inventory between owned and controlled lots. Our use of controlled as opposed to owned lots substantially reduces our investment in land. However, if landowners who are parties to the options or contracts, possibly including land banks, were to refuse to honor them, we could lose access to land at the time we want to use it in our homebuilding activities. A shortage of suitable land or an inability to secure lots on favorable terms could restrict our ability to start new projects, reduce our home sales revenue, and otherwise negatively impact our operating results.

We face substantial inherent and other risks with respect to our land and lot inventory, which could adversely affect our operating results, as could our failure to manage our land acquisition, inventories, and development and construction processes.

We own a significant amount of undeveloped land, buildable lots, and housing inventories, the value of which can fluctuate significantly due to, among other factors, changes in market conditions, economic trends, regulatory requirements, and interest or inflation rates. If housing demand falls below our expectations, we may be unable to recover our costs, resulting in lower margins or impairment losses. Our inventory carrying costs can be significant, especially if we must hold on to our land and lots longer than we planned. In declining markets, we may forgo deposits and pre-acquisition costs on option agreements or sell land or homes at a loss. While we regularly review and manage our inventory, adverse market conditions could require us to write down our land and lot values, reduce asset values on our consolidated balance sheet, and otherwise materially impact our operating results and financial condition.

In addition, we purchase a significant amount of land, lots, and inventories each year and therefore are dependent on our ability to process a large number of transactions (which include, among other things, evaluating the lot purchase, designing the layout of the development, sourcing materials and subcontractors, and managing contractual commitments) efficiently and accurately. Employee errors, failure to comply with regulatory requirements and conduct of business rules, failings or inadequacies in internal control processes, inabilities to obtain desired approvals and entitlements, cost overruns, equipment failures, natural disasters, or the failure of external systems, including those of our suppliers or counterparties, could result in operational losses that could adversely affect our business, operating results, and financial condition, as well as harm our relationships with customers.

Our inability to develop our communities successfully and within expected timeframes and budgets could harm our operating results.

Before a community generates any revenues, significant time and material expenditures are required to acquire land, obtain development approvals, and construct significant portions of project infrastructure, amenities, model homes, and sales facilities. Our land option contracts often include provisions under which delays in land development and/or longer land takedown periods cause us to incur additional costs. It can take several years from the time we acquire control of an undeveloped property to the time we make our first home sale on the site. Cost increases and delays in the development of communities, including increased costs and delays associated with subcontractors performing the development activities or entitlements, expose us to the risk of changes in market conditions for homes. A decline in our ability to develop and market our communities successfully, especially in our more recent or new markets where it may be more difficult to do so, and to generate positive cash flow from these operations in a timely manner, could have a material

adverse effect on our business, operating results, and financial condition. In addition, higher than expected absorption rates in our communities may result in lower than expected inventory levels until the development for replacement communities is completed.

Our future success depends upon our ability to adapt our business strategy to changing home buying patterns and trends.

Changing home buying patterns and trends could materially affect demand for our homes and our operating results. Our strategy focuses on offering more affordable housing options in our markets. We believe that due to anticipated generational shifts, changing demographics, and other factors, the demand for more entry-level and affordable homes will continue to increase. Our Century Complete brand targets first-time homebuyers through an asset-light model with limited customization. We also have shifted our Century Communities brand toward more affordable price points. No assurance can be provided that our current business strategy to focus on more affordable homes will be effective or that we will successfully anticipate and react to future changing home buying patterns and trends, which may include higher levels of single-family rental demand. In addition, if demand for new homes increases as a result of changing home buying patterns and trends or otherwise, the risk of shortages and cost increases in residential lots, labor, and materials available to the homebuilding industry also will likely increase.

Our geographic concentration exposes us to localized economic, regulatory, and environmental risks.

Because we operate in selected markets across 16 states, our operating results are heavily influenced by regional economic conditions, industry-specific downturns, and local events. Prolonged weakness in any of these markets, or in industries important to them, could weaken housing demand in that market and adversely affect our business, operating results, and financial condition. For example, if the oil and gas industry is negatively impacted by declining commodity prices, climate change, legislation, or other factors, it could result in reduced demand for our homes in Texas. Our West Coast communities face restrictive regulations and environmental laws, and in states like Arizona, California, Colorado, Florida, North Carolina, and Texas, insurers have limited coverage or raised premiums due to natural disasters, making homeowners’ insurance less available or affordable. Because mortgage financing requires adequate insurance, this can reduce qualified homebuyers and home sales. In addition, local infrastructure constraints, such as limited school, road, or utility capacity, may restrict our ability to obtain permits for new development. Although our operations are geographically diversified, a sustained downturn or adverse event in one of our key markets could materially affect our business, operating results, and financial condition, and impact us more significantly than larger homebuilders with broader national footprints.

Utility and resource shortages or rate fluctuations could adversely affect our business and operating results.

Some of our markets, particularly in the Western United States, have experienced shortages of electricity, water, and other resources. Resource constraints may limit regulatory approvals for new developments, increase permit costs, impose stricter efficiency or landscaping requirements, or result in fines and higher utility rates, all of which can raise the cost of homebuilding and home ownership. Utility and resource cost fluctuations, which can be exacerbated by inflation, weather, or supply chain disruptions, also can delay construction, increase development costs, and negatively impact regional economies, potentially reducing demand for our homes and adversely affecting our operating results.

Raw material and building supply shortages or price fluctuations could increase construction costs and delay home deliveries, adversely affecting our operating results.

The homebuilding industry is subject to shortages and price volatility for key materials, such as lumber, steel, concrete, and drywall, as well as petroleum products used in transportation and construction. Shortages can be amplified during periods of strong housing demand, after natural disasters, or due to trade regulations, tariffs, inflation, or geopolitical events. These conditions can delay community development and increase construction costs. We generally are unable to pass on increases in construction costs to customers who have already entered into home purchase contracts and may not be able to sufficiently increase the price of our homes remaining to be sold due to affordability concerns or otherwise. Sustained cost increases may negatively affect our margins and other operating results, and also could impact the regional economies in which we operate and reduce demand for our homes.

Our homebuilding operations expose us to significant product liability, warranty, personal injury, environmental, and other liability risks, that may not be fully covered by or exceed our insurance or contractual protections, and also could harm our reputation.

As a homebuilder, we routinely face warranty and construction defect claims, some of which could be significant and arise long after completion. Defects in our homes or developments could lead to substantial liabilities. While we maintain insurance, seek subcontractor indemnities, and establish warranty and other reserves, these protections may not fully cover future claims. Indemnities can be hard to enforce, insurance may have exclusions or limits, and coverage for construction defects has become more costly and restricted. If we cannot recover from subcontractors or insurers, our losses may increase. Unexpected costs related to construction defects or sub-surface conditions arising on a development project could materially affect our business, operating results, and reputation.

We also may incur property damage, personal liability, environmental, and other liabilities that are uninsured, underinsured, or uninsurable. Such losses could result in the loss of invested capital, lost income, repair or remediation obligations, and continued liability for debt or other obligations related to the affected property. For example, we have faced, and in the future may face, claims related to indoor exposure to toxic mold, which can cause health effects, including allergic reactions. Mold can grow on many common building materials when moisture is present, and it is impossible to eliminate all mold or mold spores indoors. If mold or other airborne contaminants are found in our homes, we need to undertake costly remediation, and impaired indoor air quality could result in liability for property damage or personal injury and harm our reputation. Additionally, homebuilding sites are inherently hazardous, exposing us to health and safety risks. Failures in health and safety performance could lead to regulatory penalties, costly incidents, and negative publicity, which could adversely affect our reputation, home sales, regulatory relationships, and ability to secure new business, potentially impacting our operating results and financial condition. Insurance covering these risks may be unavailable, or we may be unable to obtain, in sufficient amounts or at acceptable costs.

Adverse weather and geological conditions could increase costs, delay projects, and reduce housing demand, which could adversely affect our business and operating results.

Significant weather conditions and natural disasters in the geographic areas where we operate, which could increase or be more severe due to climate change, could damage or delay projects, increase costs, and reduce housing demand. Extreme weather conditions and natural disasters also could disrupt or cause shortages in labor or materials, which also could increase costs and delay projects. Some of the locations in which we operate, including in particular Colorado, Texas, Nevada and coastal areas, present increased risks of adverse weather or natural disasters, such as wildfires, earthquakes, hurricanes and coastal flooding, and soil subsidence, which could adversely affect our home sales. While we maintain insurance, our policies may not fully cover losses resulting from these events or related business interruptions, and a significant uninsured loss could materially and adversely affect our business, operating results, and financial condition.

Poor relations with the residents of our communities or other negative publicity could negatively impact our operating results and stock price.

Residents of communities we develop rely on us to resolve issues or disputes that may arise in connection with the operation or development of their communities and any unsatisfactory efforts by us to resolve these issues or disputes could adversely affect our sales or reputation or cause us to incur material expenditures, which could adversely affect our operating results. In addition, other unfavorable publicity or analyst or other reports related to us, our industry, or Company brands, marketing, personnel, operations, business performance, or prospects may adversely affect our business, operating results, and financial condition, as well as our stock price, despite their accuracy or inaccuracy.

We face significant competition in the homebuilding industry and may be unable to compete effectively.

The homebuilding industry is highly competitive, with relatively low barriers to entry. We compete with national, regional, and local homebuilders for customers, land, financing, labor, and materials. Many competitors are larger, more geographically diversified, financially stronger, and have established relationships with subcontractors and suppliers, enabling them to operate more efficiently, absorb higher costs, and withstand economic fluctuations. As we expand into new markets, we face established competitors and may lack the relationships and reputations we have in our legacy markets. Industry consolidation could increase pricing pressure and the cost of land, labor, and materials. We also compete with sellers of existing homes, foreclosures, and single-family rental properties, which may reduce demand for our homes and adversely affect our revenue and margins.

Our quarterly operating results may fluctuate because of the seasonal nature of our business and other factors; and, accordingly, our historical performance may not predict our future results.

Our quarterly home sales, earnings and other operating results may fluctuate due to seasonality and other factors. For example, more home sale contracts are signed during the spring and summer months. Weather-related problems, typically in the fall, late winter, and early spring, may delay housing starts or closings, thereby increasing our costs and reducing our profitability. Natural disasters such as hurricanes, floods, and fires also may disrupt development and increase our costs, which we may not be able to recover through higher home sale prices. In addition, home deliveries may be staggered over different periods of the year and concentrated in particular quarters. Other factors that may lead to fluctuations in our quarterly operating results include, without limitation:

the timing of home closings and land sales;

changes in demand for our homes;

our ability to continue to acquire land or secure option contracts to acquire land on acceptable terms;

the number of active selling communities and timing of new community openings and close-outs;

conditions in the real estate markets where we operate, the homebuilding industry, and general economy;

inventory impairments or other material write-downs or charges;

raw material and subcontractor and labor shortages; and

other changes in operating expenses, including the cost of personnel, labor and raw materials, and general economic conditions.

A significant portion of our historical growth has been due to our prior acquisitions, and we may not be able to continue to grow through acquisitions. In addition, acquisitions, as well as other investments, involve risk.

A significant portion of our historical growth has been due in part to our prior acquisitions and we intend to continue to explore future acquisitions of, or significant investments in, land and businesses that support our growth objectives. Since 2013, we have made nine acquisitions, including two in 2024. We cannot assure you that we will continue to identify attractive acquisition targets and consummate acquisitions. Acquisitions and investments involve risks, such as:

difficulties in assimilating the acquired operations, land and personnel;

diversion of our management’s attention from ongoing business concerns;

disruption to our existing operations and plans;

inability to effectively manage our expanded operations;

our potential inability to maximize our financial and strategic position through the successful incorporation or disposition of operations;

difficulties or delays in integrating and assimilating operations, including information and financial systems, or in realizing projected efficiencies, growth prospects, cost savings, and synergies;

maintenance of uniform standards, controls, procedures and policies;

impairment of existing relationships with employees, contractors, suppliers, and customers as a result of the integration of new management personnel and cost-saving initiatives;

adverse impact on profitability if our expanded operations do not achieve anticipated financial results and due to the effect of any required step-up to the historical basis of an acquired home;

reallocation of capital from other operating initiatives and/or an increase in our leverage and debt service requirements to pay acquisition purchase prices or other investment costs, which could in turn restrict our ability to access additional capital when needed or pursue other elements of our business strategy;

inaccurate assessment of additional post-acquisition or business venture investments, undisclosed, contingent or other liabilities or problems, unanticipated costs associated with an acquisition or other business venture, and an inability to recover or manage such liabilities and costs;

incorrect estimates made in the accounting for acquisitions and incurrence of non-recurring charges; and

write-off of significant amounts of goodwill or other assets as a result of deterioration in the performance of an acquired business, adverse market conditions, changes in the competitive landscape, changes in laws or regulations that restrict activities of an acquired business, or other circumstances.

We cannot guarantee that we will be able to successfully integrate any company or business that we may acquire in the future, and our failure to do so could harm our business. In addition, we may not realize the anticipated benefits of an acquisition at all or within a reasonable time period and there may be other unanticipated or unidentified effects. While we try and seek protection, for example, through warranties and indemnities, significant liabilities may not be identified during the due diligence investigation or may come to light after the expiry of warranty or indemnity periods. Additionally, while we try and seek to limit our ongoing exposure, for example, through liability caps, time limits and indemnities, some warranties and indemnities may give rise to unexpected and significant liabilities. Any claims arising in the future may adversely affect our business, operating results, and financial condition.

Risk Related to Our Multi-Family Rental Business

Our multi-family rental business, which is relatively new for us, is subject to many of the same risks as with our core homebuilding business, as well as other additional risks, and we may not be successful in this business.

Our Century Living subsidiary is engaged in the development, construction, management, and sales of multi-family rental properties, currently in Colorado. This business, which is relatively new for us and which we believe leverages and complements our core homebuilding operations, is subject to many of the same risks associated with our homebuilding business. For example, before a multi-family rental unit generates any revenues, we are required to make significant expenditures to acquire land; obtain permits, development approvals and entitlements; and construct the building. To date, we have funded these significant expenditures with additional debt financing, including amounts under our construction loan agreements. However, no assurance can be provided that we will be able to continue to obtain such debt financing or that we will not pursue private equity or joint venture financing, which may not be available on acceptable terms or at all. Like our homebuilding business, demand for our rental apartments is subject to fluctuations and is difficult to predict, often due to factors outside of our control, such as employment levels; consumer confidence and spending; housing demand; availability of financing; interest rates; availability, quality and prices of new homes, rental apartments, and other living arrangements;

and demographic trends, among other factors. Similar to our homebuilding business, if there is a market downturn in the housing industry, our sales and other operating results for our multi-family rental business likely will be adversely affected and we may incur significant inventory impairments and other write-offs. In addition, like our homebuilding business, the multi-family rental business is competitive, especially in light of the numerous large, well-capitalized real estate investment trusts and other vehicles and companies that have entered this business. We compete for tenants with the large supply of already existing or newly built single- and multi-family rental units, as well as with sellers of homes. These competitive conditions could negatively impact our multi-family rental unit occupancy levels and rental rates. These competitive conditions could negatively impact our ability to succeed in this business.

The multi-family rental business is also subject to other risks. For example, the construction cycle for multi-family buildings is generally longer than that of single family homes, which puts us at greater risk of construction delays and changing market conditions that could adversely affect our operating results in this business. It generally takes several years for us to acquire the land and construct, market, and deliver units or lease units in a multi-family building. Completion times vary on a building-by-building basis depending on the complexity of the project, its stage of development when acquired, and the regulatory and community issues involved. As a result of these potential delays in the completion of a multi-family building, we face the risk that demand for housing may decline during this period and we may be forced to sell or lease units at a loss or for prices that generate lower profit margins than we initially anticipated. Furthermore, if construction is delayed, we may face increased costs as a result of inflation or other causes and/or asset carrying costs (including interest on funds used to acquire the land and construct the building). These costs can be significant and adversely affect our operating results. In addition, if values of the building or units decline, we may be required to recognize significant impairments.

Risks Related to Our Financial Services Business

The impairment of our ability to sell mortgages into the secondary market could significantly reduce our ability to sell homes unless we are willing to become a long-term investor in the loans we originate, which is also risky.

Most of the loans we originate in our Financial Services business are from the buyers of our homes. We sell substantially all of the loans we originate in the secondary mortgage market within a short period of time after origination. If we are unable or choose not to sell loans into the secondary mortgage market or directly to Fannie Mae, Freddie Mac, and Ginnie Mae, we may need to curtail our origination of mortgage loans, which could significantly reduce our ability to sell homes, or we would need to commit our own funds to long-term investments in mortgage loans, which, in addition to requiring us to deploy our own capital, could delay home revenues. Since we retain mortgage servicing rights on some of our loan sales, we may have to advance payments to the mortgage-backed securities bondholders if there are insufficient collections to satisfy the required principal and interest remittances of the underlying mortgage-backed securities. Further, the value of our mortgage servicing rights may fluctuate due to, among other factors, interest rate fluctuations, which may adversely impact our operating results.

The financial services market is competitive and we may not compete effectively.

Our Financial Services business competes with insurance agencies, title companies, mortgage lenders, and other financial institutions, including national, regional, and local providers. Some of our competitors have greater access to capital, face fewer regulations or operate under different criteria, and may offer a broader or more attractive range of products and services; and, as a result, we may not be able to compete effectively in this market.

We are subject to various additional risks relating to our Financial Services business.

There are several additional risks associated with our mortgage lending business that differ from our homebuilding and multi-family operations. For example, because we often originate loans for buyers of our homes, a decline in demand for our homes directly impacts this business, our borrower pool is less diverse than that of traditional lenders, increasing the likelihood of correlated defaults; and we may face pressure to relax underwriting standards to close home sales, which could lead to higher default rates and negatively affect our operating results and financial condition.

When we sell the loans we originate, we make customary representations and warranties to purchasers, guarantors and insurers about the loans and the manner in which they were originated, and offer certain indemnities and guaranties to them of which we are responsible. If there are defaults on the loans we originate, we may be required to repurchase or substitute mortgage loans, or indemnify buyers, guarantors or insurers of our loans. If we have significant liabilities with respect to such claims, it could have an adverse effect on our operating results, and possibly our financial condition. Further, if we face a high default rate on the mortgages we originate, we may be unable to sell mortgages or the pricing we receive upon the sale of mortgages may not meet our expectations. Although we maintain reserves for potential losses, actual losses could exceed expectations.

In addition, to help finance our Financial Services business, we maintain separate mortgage warehouse facilities, which indebtedness involves risk as described later in this section. In addition, we utilize forward commitments on mortgage-backed securities, forward commitments, and investor commitments to protect the value of interest rate lock commitments and loans held for sale from fluctuations

in mortgage-related interest rates and market pricing. While we often use derivative financial instruments to economically hedge our interest rate exposure from the time a borrower locks a loan until the time the loan is committed, we cannot assure that such hedging activities will be effective or that counterparties under these agreements will honor their obligations thereunder.

Risks Related to Human Capital Management

Our failure to identify, recruit, retain, and develop highly skilled and competent personnel and contractors may adversely affect our standards of service and business.

Our success depends on continuing to identify, recruit, retain and develop key employees and skilled subcontractors. We rely on strong leadership and experienced personnel in management, operations, sales, and customer service. Losing key individuals, including our Executive Chairman and CEO, could be difficult to replace and harm our business, and we do not maintain key person life insurance. Labor shortages in homebuilding, driven by, among other factors, high demand and immigration policies, make attracting and retaining talent challenging. In addition, because we subcontract nearly all our construction work, we depend on the availability and skill of third-party trades people. We lack long-term contracts, and rising homebuilding activity could make securing subcontractors difficult or costly. Entering new markets requires building new subcontractor relationships, which may not occur quickly or efficiently. Any disruption in labor availability or subcontractor relationships or increased costs could adversely affect our business and operating results. Any work stoppages, strikes, or union activity amongst our employees or subcontractors also could disrupt our operations or increase our costs.

Labor shortages, costs, or disruptions could cause project delays and increased costs, which could adversely affect our margins and other operating results and our reliance on subcontractors exposes us to additional risks.

Access to qualified labor and related costs are subject to factors beyond our control, including without limitation:

shortages of qualified trades people, such as carpenters, roofers, electricians, and plumbers;

work stoppages resulting from labor disputes;

changes in laws relating to union organizing activity;

changes in immigration laws and enforcement and trends in labor force migration; and

increases in wages and subcontractor and professional services costs.

These issues can cause delays and increase construction costs. Labor shortages can be more severe during periods of strong demand for housing and pricing for labor can be affected by the factors discussed above and other national, regional, and local economic and political factors. We may be unable to recover these increased costs through higher home prices due to market conditions and contractual limits, adversely affecting our margins and operating results.

Our reliance on subcontractors also exposes us to risks such as construction defects, safety issues, and improper practices. These may lead to warranty obligations, legal liabilities, and reputational harm. Costs could exceed reserves, and recovery from subcontractors may be limited. Additionally, regulatory inquiries into subcontractor classifications could result in employment-related liabilities if subcontractor workers are deemed our employees, further impacting our operating results.

Risks Related to the Governmental, Regulatory, Legal, and Compliance Matters

Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses, and limit our homebuilding and other activities, which could adversely affect our operating results.

Our operations are subject to extensive local, state, and federal regulations governing land use, building, health and safety, environmental protection, zoning, sales, and mortgage lending. Compliance with these requirements involves significant costs and obtaining numerous approvals, which can be delayed or denied at the discretion of governmental authorities. Restrictive land use regulations, permit moratoriums, and “slow growth” or “no growth” initiatives may limit our ability to develop communities. Municipalities may also restrict access to essential utilities such as water and sewer taps. These actions, along with government shutdowns or slowdowns, can cause delays, increase costs, or prevent us from building in certain markets. Additionally, new energy-efficiency standards—such as HUD’s Energy Efficient Minimum Property Standards effective May 2026—may require design changes, additional approvals, and higher construction costs, which could reduce our margins or increase our home prices, adversely affecting demand for our homes. Certain markets, including California, Washington, and parts of Texas, are particularly impacted by these risks. Legal challenges to our proposed communities by governmental authorities or private parties may also result in delays and increased expenses.

We are also subject to environmental laws governing land use, pollutant discharge, hazardous materials handling, and site remediation. We may be liable for removal or cleanup of hazardous substances on properties we currently or previously owned or leased, regardless of fault. These costs can be substantial and may impair land value or restrict our ability to sell or finance properties. Although we are

not aware of material remediation needs, historical contamination has been identified at some past projects, and future claims or liabilities could arise.

Governmental regulation affects not only our homebuilding activities but also our Financial Services operations, which are subject to extensive consumer protection and mortgage lending laws enforced by agencies such as the Consumer Financial Protection Bureau, HUD, FHA, VA, USDA, Fannie Mae, Freddie Mac, and Ginnie Mae. Compliance requires licensing, consumer disclosures, fair lending practices, and adherence to real estate settlement procedures, and subjects us to regular, extensive examinations. Non-compliance could result in fines, penalties, or restrictions on our ability to operate.

Additionally, we are subject to numerous federal, state, and international data protection and privacy laws. Because we collect and store sensitive customer and employee information, any failure of our systems or controls—including employee error, negligence, or misconduct—could result in unauthorized access, disclosure, or misuse of data. Such events could lead to significant costs, regulatory enforcement actions, fines, reputational harm, and loss of customers. Liability from a data breach can be substantial and may fall outside contractual limitations or insurance coverage. As data privacy standards evolve and differ across jurisdictions, compliance costs and risks continue to increase.

On January 20, 2026, the President issued an executive order titled, "Stopping Wall Street from Competing with Main Street Homebuyers". This order outlines the administration's policy that large institutional investors should not buy single-family homes that individual owner-occupants could purchase. The executive order does not impose an immediate ban but directs several federal agencies to develop new guidelines and review existing rules to limit activities that support large institutional investor acquisitions of single-family homes. The full impact of these potential restrictions is not yet clear, pending formal definitions of "large institutional investor" and "single-family home". Any broad interpretation or strict enforcement could negatively impact the broader residential housing market.

Risks Related to Our Indebtedness and Liquidity

Our business is capital-intensive and any difficulty in obtaining sufficient capital, refinancing our existing indebtedness, or obtaining performance bonds and letters of credit, or the cost thereof, could result in our inability to acquire land for our developments or increased costs and project delays, or otherwise harm our business, operating results, and financial condition.

Our homebuilding and multi-family rental businesses require significant up-front expenditures to acquire land and begin development. In addition, we often are required to post letters of credit and performance and other bonds related to our land development performance obligations to secure construction contracts and development agreements. Our Financial Services business also requires substantial capital to extend mortgage loans. While we believe we will be able to fund our current and foreseeable liquidity needs with our cash on hand, anticipated cash generated from operations, and cash expected to be available from our revolving line of credit and other credit facilities, or through accessing additional debt or equity capital, and while we believe will continue to obtain bonds and letters of credit, as needed, it is difficult for us to predict our future liquidity requirements or market conditions.

Our ability to generate sufficient cash flows to fund our capital requirements, service debt, and obtain bonds or letters of credit depends on our current and future financial performance, which is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control. If we do not generate adequate cash flows, we may need additional financing. In addition, given the current maturity of our existing indebtedness, we likely will refinance some or all of our indebtedness prior to their respective maturity dates. Our access to and cost of additional financing or the refinancing of our existing indebtedness and credit facilities will depend, in part, on

general market conditions and the health of the credit and capital markets in particular;

the health of our business, including most importantly, demand for our homes;

the market’s perception of our growth potential;

with respect to acquisition and/or development financing, the market’s perception of the value of the land parcels to be acquired and/or developed;

our current and anticipated debt levels and credit ratings;

the terms of our then current debt agreements;

our current and expected future earnings and cash flows;

the market price per share of our common stock.

Our ability to continue to obtain required performance, payment and completion surety bonds and letters of credit primarily depends upon our credit rating, financial condition, past performance and similar factors, the capacity of the surety and letters of credit market, and the underwriting practices of surety bond and letters of credit issuers. Our ability to continue to obtain surety bonds also can be impacted by unwillingness of insurance companies to issue performance bonds for construction and development activities. Our inability

to obtain additional or renew or amend our existing performance, payment and completion surety bonds and letters of credit could limit our future growth.

Depending on market and other conditions at the time, we may need to rely more heavily on additional equity financings, which may dilute the holdings of our existing stockholders and reduce the market price of our common stock, or on additional or less efficient forms of debt financing which may involve additional covenants restricting our operations or our ability to incur additional debt or require a larger portion of our cash flow from operations, thereby reducing funds available for our operations, future business opportunities, and other purposes and adversely affecting the return on our assets. The issuance of preferred stock in an equity financing could have a preference on liquidating distributions or dividends or both which could limit our ability to pay dividends or make liquidating distributions to the holders of our common stock. We cannot assure that sufficient capital or refinancing will be available on favorable terms, or at all. If we are unable to obtain additional financing or refinancing when needed, we may be unable to acquire land, develop housing, or meet contractual obligations, which could cause project delays, increased costs, contractual penalties and fees, and otherwise adversely affect our business. If we cannot service our indebtedness, including interest payments and the payment of principal at maturity, we may need to seek additional debt or equity financing, reduce or delay our capital expenditures, strategic acquisitions, investments and alliances, or sell assets, which could adversely affect our business, operating results, financial condition, and prospects.

We have substantial indebtedness and expect to continue to use leverage in executing our business strategy, which restricts our operations and could have other important consequences on our business.

As of December 31, 2025, we had approximately $1.4 billion in outstanding indebtedness. As of December 31, 2025, we had a $1.0 billion revolving line of credit, of which $51.5 million was outstanding. During 2025, we paid $81.3 million in interest expense payments. Our charter does not limit the amount of debt we may incur, and our Board of Directors may change our target debt levels at any time without the approval of our stockholders, especially in connection with acquisitions. The agreements governing our indebtedness, including our credit agreement and senior note indentures, contain negative covenants customary for such financings, such as limiting our ability to sell or dispose of assets, incur additional indebtedness or liens, make certain restricted payments or investments, consummate business combinations, or engage in other lines of business. These restrictions may interfere with our ability to engage in necessary or desirable business activities, which could materially affect our business, operating results, and financial condition. Our revolving line of credit requires us to comply with certain financial ratios and covenants, such as a maximum leverage ratio, a minimum interest coverage ratio, and a minimum tangible net worth, and our ability to comply with these covenants depends on our financial performance and condition and is subject to events outside our control, such as asset write-downs, other non-cash charges, and one-time events. If we fail to comply with these covenants and are unable to obtain a waiver or amendment, an event of default would result, which could also result in events of default under our other debt arrangements, and we cannot assure you that we would have sufficient liquidity to repay or refinance our debt if such amounts were accelerated upon an event of default.

Our substantial indebtedness, as well as any future indebtedness we may incur, could have other important consequences for our business and holders of our securities, including:

making it more difficult for us to satisfy our obligations with respect to our debt or other creditors;

causing us to pay higher interest rates upon refinancing indebtedness if interest rates rise;

increasing our vulnerability to adverse economic or industry conditions;

limiting our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is limited;

requiring a substantial portion of our operating cash flows for interest payments as opposed using such cash to fund working capital, land purchases, capital expenditures, acquisitions, stock repurchases, and general corporate requirements;

requiring our subsidiaries to continue to fund payments on our indebtedness;

limiting our flexibility in planning for or reacting to changes in our business and industry; and

placing us at a competitive disadvantage to less leveraged competitors.

Risks Related to Tax Policies and Regulation

Any limitation on, or reduction or elimination of, tax benefits associated with owning a home would have an adverse effect on the demand for our homes, which could be material to our business.

Changes in tax laws and local fees may reduce homeownership affordability and demand. Limits on deductibility of property and income taxes and higher standard deductions have reduced the tax benefits of homeownership, particularly in high-cost areas. Further reductions or elimination of these benefits, or increases in property or sales taxes, could negatively impact demand and sales prices. Developer fees for schools, infrastructure, or affordable housing could also raise costs and affect results.

Our income tax expense has benefited from the Section 45L energy-efficient home credit, which reduced our income tax expense by $2.7 million in 2025 and $6.6 million in 2024. The “One Big Beautiful Bill,” enacted July 4, 2025, eliminates these credits for homes

delivered after June 30, 2026, and recent certification changes may make claiming the credit before expiration more difficult or uneconomical.

Non-U.S. holders may be subject to United States federal income tax on gain realized on the sale or disposition of shares of our common stock.

Because of our holdings in United States real property interests, we believe we are and will remain a “United States real property holding corporation” (which we refer to as “USRPHC”) for United States federal income tax purposes. As a USRPHC, our stock may be treated as a United States real property interest (which we refer to as “USRPI”), gains from the sale of which by non-U.S. holders would be subject to U.S. income tax and reporting obligations and possible withholding tax pursuant to the Foreign Investment in Real Property Tax Act (which we refer to as “FIRPTA”). However, assuming we are publicly traded, non-U.S. holders who actually or constructively hold 5% or less of our common stock should qualify for an exemption from federal income tax and withholding that otherwise would be imposed on gain on our common stock. We anticipate that our common stock will continue to be regularly traded on the New York Stock Exchange. However, no assurance can be given that our common stock will remain regularly traded in the future. Because of these adverse tax consequences, non-U.S. investors may choose not to invest in our Company. Non-U.S. holders should consult their tax advisors concerning the consequences of disposing of shares of our common stock.

Our income tax provision and tax reserves may be insufficient, and we may not realize our deferred tax assets.

Significant judgment is required in determining our provision for income taxes and our reserves for federal, state, and local taxes. Our evaluation of our tax matters is based on a number of factors, including relevant facts and circumstances, applicable tax law, correspondence with tax authorities during the course of audits, and effective settlement of audit issues. We are periodically audited by various federal, state, and local authorities regarding tax matters. No assurance can be given that any final review by a tax authority will not be materially different than that which is reflected in our income tax provision and related tax reserves and have a material adverse effect on our income tax provision and, consequently, on our net income, cash flows or financial position. We are subject to U.S. federal income tax examinations and various state income tax examinations for calendar tax years for which the applicable statute of limitations remains open. As of December 31, 2025, we are not currently under an income tax audit by any federal, state, or local authorities.

We are required to recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. As of December 31, 2025 and 2024, we had deferred tax assets, net of deferred tax liabilities, of $38.2 million and $22.2 million, respectively, against which we provided no valuation allowance. The ultimate realization of our deferred tax assets is dependent upon generating future taxable income. While we have not recorded valuation allowances against our deferred tax assets, the valuation allowances are subject to change as facts and circumstances change.

Risks Related to Ownership of our Common Stock

Our common stock has been and may continue to be volatile

Our common stock has experienced price and volume volatility. During 2025, the closing sale price of our common stock ranged from $51.04 to $78.81 per share and the trading volume ranged from approximately 48,300 shares to 3.4 million shares. The price and volume of our common stock may continue to experience fluctuations not only due to general stock market conditions but also due to government regulatory action, tax laws, interest rates, the condition of the U.S. economy and a change in sentiment in the market regarding our industry, operations or business prospects. In addition to other factors, the price and volume volatility of our common stock may be affected by:

factors influencing home purchases, such as availability and cost of home mortgage loans, interest rates, credit criteria, ability to sell existing homes, and homebuyer sentiment in general;

the operating and stock price performance of companies that investors consider comparable to us;

strategic, acquisition and other material announcements by us or our competitors;

changes in global financial markets and global economies and general market conditions, such as interest rates, commodity and equity prices and the value of financial assets;

additions or departures of key personnel;

operating results that vary from the expectations of analysts and investors;

changes in recommendations by analysts or their ceasing to publish reports on us;

sales of our common stock by stockholders or management or additional sales by us;

changes in our stock repurchase or dividend policies;

actions by stockholders; and

legislative or other regulatory developments that adversely affect us or the homebuilding industry.

A volatile stock price may result in stockholder litigation, which could divert our management’s attention and other resources from our business and operations, which could harm our operating results and require us to incur significant expenses to defend the suit. Any such litigation, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our operating results and financial condition.

Our actual results may differ from our guidance or analyst expectations, which could cause our stock price to fall.

Each quarter, we typically issue guidance regarding our anticipated annual revenue and home deliveries. While our guidance represents our best estimates as of the date of issuance, it is inherently speculative and forward-looking, and is qualified by, and subject to, assumptions and other information. While presented with numerical specificity, our guidance is based upon a number of assumptions and estimates that are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control, and therefore subject to change. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release, and actual results may vary from the guidance and such variations may be adverse and material. The reliability of any forecasts typically diminishes the farther in the future that the data are forecast. Investors are urged to put our guidance in context and not to place undue reliance on it. Our failure to achieve our guidance or analyst expectations regarding our performance could disappoint investors and analysts and cause our stock price to decline.

We cannot assure you that we will continue to pay dividends on our common stock at the current rate or at all.

Since 2021, we have paid a quarterly cash dividend on our common stock. Future dividends are at the discretion of our Board of Directors and will depend on many factors, including our operating results and financial condition, capital requirements, and contractual limitations, including those under our debt arrangements. If we do not continue to pay dividends on our common stock at the current rate or at all, our stock price could be adversely affected.

Inefficient or ineffective allocation of capital may adversely affect our operating results and stockholder value and stockholders disagree with our allocation of capital.

Our capital allocation decisions, including how we prioritize investment opportunities, debt repurchases and repayments, and return of capital to stockholders, through cash dividends and stock repurchases, involve judgments that could materially affect our operating results, financial condition, and stock price, and stockholders may disagree with our decisions. If our processes for allocating capital are ineffective or create actual or perceived conflicts of interest, we may face financial loss, loss of investor confidence, a decreased stock price, or reputational harm. In addition, our use of capital for future debt repurchases and repayments and for stock repurchases may diminish our cash reserves, which may impact our ability to pursue other opportunities.

Provisions in our charter documents, Delaware law and agreements could discourage acquisition proposals or limit the ability of a third party to acquire control of the Company, which may adversely affect our stock price.

Our charter and bylaws and Delaware law contain provisions that may discourage, delay or prevent a transaction or a change in control of the Company that might involve a premium paid for shares of our common stock or otherwise be in the best interests of our stockholders, which could adversely affect the market price of our common stock. In addition, the employment agreements we have entered into with our Executive Chairman and our Chief Executive Officer and President also may discourage, delay or prevent a change in control transaction since they could result in a requirement for us to pay significant severance compensation to one or both of them.

Insider ownership and close family relationships amongst our management may raise conflicts of interest.

Dale Francescon and Robert Francescon are our Executive Chairman and Chief Executive Officer, respectively, sit on our Board of Directors, are brothers, and collectively beneficially owned 4,105,940 shares of our common stock, including 395,546 shares issuable upon vesting of performance share unit awards (including related dividend equivalent rights) within 60 days of December 31, 2025, which together represents 13.9% of our common stock outstanding as of December 31, 2025. Accordingly, they have significant influence over the affairs of our Company and their interests may not always be fully aligned with the interests of our other stockholders. Their significant control and ownership may limit the ability of our other stockholders to influence corporate matters and discourage someone from making a significant equity investment in our Company, or could discourage transactions involving a change in control. In addition, there may be transactions between us and each or both of them, or their affiliates, that could present actual or perceived conflicts of interest.

General Risk Factors

We are dependent upon the effective operation of our information systems, software, and information security practices and those of our business partners or third-party service providers, and any IT failures or cybersecurity breaches could expose us to liability and materially adversely affect our business, operating results and reputation.

We rely on accounting, financial, and operational management information systems to operate and maintain critical business and personal records and information, especially in our Financial Services business. Many of these resources are provided to us and/or maintained on our behalf by third-party providers pursuant to agreements that specify to varying degrees certain security and service level standards. Our IT systems depend upon these providers, as well as global communications providers, telephone systems and other aspects of the Internet infrastructure, which have experienced significant systems failures and electrical outages in the past, and are susceptible to damage or interruption from fire, floods, power outages, or telecommunications failures, or cybersecurity threats such as computer viruses, break-ins, ransom attacks, security breaches, and similar events. The occurrence of any of these events to us directly or any of our third-party service providers could adversely affect our ability to operate our business, damage our reputation, result in the loss of customers, suppliers, or revenues, or result in the misappropriation or public disclosure of confidential information, including personal information of homebuyers/borrowers and information about our employees, contractors, vendors and suppliers. As a result, we may be required to incur significant costs to remediate the damage caused by these disruptions or to prevent security breaches in the future. Our IT systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and to develop new systems. This enables us to keep pace with continuing changes in technology, evolving legal and regulatory standards, and the increasing need to protect information. There can be no assurance that our IT efforts will be successful or that additional systems issues will not arise in the future. While, to date, we have not had a significant cybersecurity breach or attack that had a material impact on our business or operating results, there can be no assurance that our efforts to maintain the security and integrity of these types of IT networks and related systems and information will be effective or that attempted security breaches or disruptions would not be successful or damaging. In particular, the techniques used in cyber attacks are increasingly sophisticated, change frequently, and are often not recognized until launched. While we maintain cyber liability insurance, it may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.

We currently use limited traditional and generative artificial intelligence (AI) solutions for certain sales, back office, administrative and other functions. We may incorporate additional AI solutions into our IT systems in the future and these solutions may become important in our operations over time. The ever-increasing use and evolution of technology, including cloud-based computing and AI, creates opportunities for the potential loss or misuse of personal data that we use to run our business, and unintentional dissemination or intentional destruction of confidential information stored in our or our third party providers' systems, portable media or storage devices, which may result in significantly increased business and security costs, a damaged reputation, administrative penalties, or costs related to defending legal claims. AI programs may be costly and require significant expertise to develop, may be difficult to set up and manage, and require periodic upgrades. Our competitors or other third parties may incorporate AI into their IT systems and homebuilding and financial services operations more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our operating results.

Our Company could be targeted by activist stockholders.

We may be subject to actions or proposals from activist stockholders or others that may not align with our business strategies or the interests of our other stockholders. Responding to such actions could be costly and time-consuming, disrupt our business and operations, and/or divert the attention of our Board of Directors and senior management from the pursuit of our business strategies. Activist stockholders may create perceived uncertainties as to the future direction of our business or strategy, which may be exploited by our competitors and make it more difficult to attract and retain qualified personnel, potential homebuyers and business partners and affect our relationships with current homebuyers, subcontractors, investors and other third parties. In addition, actions of activist stockholders may cause periods of fluctuation in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

We are subject to several other general risks that could adversely affect our business, operating results and financial condition.

The risk factors described above are those that we think may be material with regard to an investment in us that are not applicable generally to all business enterprises. However, we are subject to the many risks that affect all or most business enterprises in the United States, and our business, operating results or financial condition could be materially affected by those risks. For example, the United States has experienced, and may experience in the future, outbreaks of contagious diseases that affect public health and public perception of health risk. The extent to which public health issues impact our results will depend on future developments, which cannot be predicted. If a contagious disease causes significant negative impacts to economic conditions or consumer confidence, our business, operating results and financial condition could be materially adversely impacted.

Century Communities, Inc. (CCS) Risk Factors

ITEM 1A.RISK FACTORS

Summary

Fluctuations in the demand for our homes may continue to materially affect our business, operating results, and financial condition.

Our geographic concentration exposes us to localized economic, regulatory, and environmental risks.

We face risks regarding utility, resource, raw material, and building supply shortages and price fluctuations.

Our homebuilding operations expose us to product liability, warranty, personal injury, environmental, and other liability risks, which may not be covered by or may exceed our insurance or contractual protections, and harm our reputation.

Adverse weather and geological conditions could increase costs, delay projects, and reduce housing demand.

Poor relations with our communities or other negative publicity could harm our business and reputation.

A significant portion of our historical growth is due to acquisitions, which may not continue.

Risk Related to Our Multi-Family Rental Business

Our multi-family rental business, which is relatively new for us, is subject to many of the same risks associated with our core homebuilding business, as well as other additional risks, and may not be successful.

Risk Related to Our Financial Services Business

Our home sales depend on our Financial Services business and our ability to originate loans and resell them into the secondary market. This business subjects us to additional risks and is competitive.

Risks Related to Human Capital Management

Our failure to identify, recruit, retain, and develop highly skilled and competent personnel and contractors may adversely affect our standards of service and business.

We rely heavily on contractors, which exposes us to additional risks, and labor shortages, costs, or disruptions could cause project delays or increased costs.

Risks Related to Governmental, Regulatory, Legal and Compliance Matters

Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses, or limit our homebuilding or other activities.

We are subject to various laws and regulations, which may increase our costs and potential liability.

Risks Related to Our Indebtedness and Liquidity

Our business is capital-intensive and any difficulty in obtaining capital or refinancing our indebtedness, or the cost thereof, could impair our business and operating results.

We have substantial indebtedness, which restricts our operations and could adversely affect our business.

Table of Contents

Risks Related to Tax Policies and Regulation

Tax policies and regulation, including with respect to tax benefits associated with homeownership or increases in property, sales, and other taxes, may adversely affect our operating results.

We have anti-takeover mechanisms that may discourage acquisition proposals.

Insider ownership and family relationships amongst our management may raise conflicts of interest.

General Risk Factors

We are subject to several other general risks, including without limitation, IT failures or data security breaches; the rise of artificial intelligence; and the possibility of becoming a target of activist investors.

Fluctuations in the demand for our homes may continue to materially affect our business, operating results, and financial condition.

Adverse changes in general economic conditions may continue to reduce the demand for our homes and, as a result, continue to have a material adverse effect on our business, operating results, and financial condition.

Table of Contents

Interest rate increases have adversely affected and could continue to adversely affect our revenues and other operating results.

Inflation has adversely affected and could continue to adversely affect our operating results.

Employment rates affect home demand and loan delinquencies potentially adversely affecting our operating results.

Table of Contents

Home cancellation rates have adversely affected and could continue to adversely affect our operating results.

Our long-term growth depends upon our ability to successfully identify and acquire desirable land lots at reasonable prices for residential build-out.

We face substantial inherent and other risks with respect to our land and lot inventory, which could adversely affect our operating results, as could our failure to manage our land acquisition, inventories, and development and construction processes.

Our inability to develop our communities successfully and within expected timeframes and budgets could harm our operating results.

Table of Contents

adverse effect on our business, operating results, and financial condition. In addition, higher than expected absorption rates in our communities may result in lower than expected inventory levels until the development for replacement communities is completed.

Our future success depends upon our ability to adapt our business strategy to changing home buying patterns and trends.

Our geographic concentration exposes us to localized economic, regulatory, and environmental risks.

Utility and resource shortages or rate fluctuations could adversely affect our business and operating results.

Raw material and building supply shortages or price fluctuations could increase construction costs and delay home deliveries, adversely affecting our operating results.

Table of Contents

Adverse weather and geological conditions could increase costs, delay projects, and reduce housing demand, which could adversely affect our business and operating results.

Poor relations with the residents of our communities or other negative publicity could negatively impact our operating results and stock price.

We face significant competition in the homebuilding industry and may be unable to compete effectively.

Our quarterly operating results may fluctuate because of the seasonal nature of our business and other factors; and, accordingly, our historical performance may not predict our future results.

Table of Contents

A significant portion of our historical growth has been due to our prior acquisitions, and we may not be able to continue to grow through acquisitions. In addition, acquisitions, as well as other investments, involve risk.

Risk Related to Our Multi-Family Rental Business

Our multi-family rental business, which is relatively new for us, is subject to many of the same risks as with our core homebuilding business, as well as other additional risks, and we may not be successful in this business.

Table of Contents

Risks Related to Our Financial Services Business

The impairment of our ability to sell mortgages into the secondary market could significantly reduce our ability to sell homes unless we are willing to become a long-term investor in the loans we originate, which is also risky.

The financial services market is competitive and we may not compete effectively.

We are subject to various additional risks relating to our Financial Services business.

Table of Contents

Risks Related to Human Capital Management

Our failure to identify, recruit, retain, and develop highly skilled and competent personnel and contractors may adversely affect our standards of service and business.

Labor shortages, costs, or disruptions could cause project delays and increased costs, which could adversely affect our margins and other operating results and our reliance on subcontractors exposes us to additional risks.

Risks Related to the Governmental, Regulatory, Legal, and Compliance Matters

Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses, and limit our homebuilding and other activities, which could adversely affect our operating results.

Table of Contents

not aware of material remediation needs, historical contamination has been identified at some past projects, and future claims or liabilities could arise.

Risks Related to Our Indebtedness and Liquidity

Table of Contents

to obtain additional or renew or amend our existing performance, payment and completion surety bonds and letters of credit could limit our future growth.

We have substantial indebtedness and expect to continue to use leverage in executing our business strategy, which restricts our operations and could have other important consequences on our business.

Risks Related to Tax Policies and Regulation

Any limitation on, or reduction or elimination of, tax benefits associated with owning a home would have an adverse effect on the demand for our homes, which could be material to our business.

Table of Contents

delivered after June 30, 2026, and recent certification changes may make claiming the credit before expiration more difficult or uneconomical.

Non-U.S. holders may be subject to United States federal income tax on gain realized on the sale or disposition of shares of our common stock.

Our income tax provision and tax reserves may be insufficient, and we may not realize our deferred tax assets.

legislative or other regulatory developments that adversely affect us or the homebuilding industry.