By Nicholas G. Miller

Hovnanian Enterprises swung to a second-quarter loss as the war in the Middle East pushed up mortgage rates, sending potential homebuyers to the sidelines.

"We began our second quarter with encouraging sales momentum, but escalating geopolitical tensions, particularly the war in Iran, reignited inflation concerns and caused many homebuyers to hesitate," said Chief Executive Ara Hovnanian.

The homebuilder posted a loss of $284,000 for its second quarter ended April 30, compared with a profit of $19.7 million a year earlier. On a per-share basis, the company reported a loss of 46 cents a share, compared with a profit of $2.43 a share a year prior.

Revenue fell to $667.6 million from $686.5 million.

Homebuilding gross margin percentage, before cost of sales, interest expense and land charges, was 14.3%, down from 17.3% in the prior-year's second quarter.

For the third quarter, total revenue is expected to be between $650 million and $750 million and adjusted homebuilding gross margin is expected to be between 14% and 15%

"In today's environment, it's difficult to provide meaningful visibility beyond the next quarter. However, if current housing conditions continue, we expect a significant step-up in our fourth quarter performance, particularly in volume and gross margins, driven by deliveries from newer communities," Hovnanian said.

Write to Nicholas G. Miller at nicholas.miller@wsj.com.

(END) Dow Jones Newswires

May 21, 2026 09:42 ET (13:42 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.