Tri Pointe Homes, Inc. (‘Tri Pointe’) engages in the design, construction and sale of single-family attached and detached homes in 17 markets across twelve states and the District of Columbia.
In late 2023, the company announced its expansion into the greater Salt Lake City region. In early 2024, the company further expanded into the Orlando and Coastal Carolinas regions.
Strategy
The company's growth strategy is to capitalize on demand in selected ‘core’ markets with favorable population and...
Tri Pointe Homes, Inc. (‘Tri Pointe’) engages in the design, construction and sale of single-family attached and detached homes in 17 markets across twelve states and the District of Columbia.
In late 2023, the company announced its expansion into the greater Salt Lake City region. In early 2024, the company further expanded into the Orlando and Coastal Carolinas regions.
Strategy
The company's growth strategy is to capitalize on demand in selected ‘core’ markets with favorable population and employment growth, as a result of proximity to job centers or primary transportation corridors.
Segments
The company’s operations are organized into two principal businesses: homebuilding and financial services. The company has three reportable segments:
West Region: Arizona, California, Nevada, and Washington.
Central Region: Colorado, Texas, and Utah.
East Region: District of Columbia, Florida, Maryland, North Carolina, South Carolina, and Virginia.
In September 2023, the company announced its expansion into the greater Salt Lake City region. In early 2024, the company further expanded into the Orlando and Coastal Carolinas regions. As of December 31, 2024, the company had not commenced home sales in any of these new markets.
The company’s financial services operation (Tri Pointe Solutions) is a reportable segment and is consisted of its Tri Pointe Connect mortgage financing operations, Tri Pointe Assurance title and escrow services operations, and Tri Pointe Advantage property and casualty insurance agency operations.
As of December 31, 2024, the company’s operations consisted of 145 active selling communities and 36,490 lots owned or controlled. The company’s construction expertise across an extensive product offering allows it flexibility to pursue a wide array of land acquisition opportunities and appeal to a broad range of potential homebuyers, including buyers of entry-level, move-up, luxury, and active adult homes. For the year ended December 31, 2024, the company delivered 6,460 homes.
Lots Owned or Controlled
As of December 31, 2024, the company owned or controlled, pursuant to land option contracts or purchase contracts, an aggregate of 36,490 lots, consisting of 46% lots owned and 54% lots controlled.
Community Development
In certain of the company’s markets, the company typically develops community phases based upon projected sales, and it constructs homes in each phase, whether or not they have been pre-sold.
Construction
Substantially all of the company’s construction work is done by subcontractors with the company acting as the general contractor. It also enters into contracts as needed with design professionals and other service providers who are familiar with local market conditions and requirements. The company maintains strong and long-standing relationships with many of its subcontractors.
Sales and Marketing
In connection with the sale and marketing of the company’s homes, the company makes extensive use of online and offline advertising and other promotional activities, including digital paid search and display advertising, its website, print media advertisements, brochures, direct mail, and the placement of signboards in the immediate areas of its developments. The company sells its homes through its own sales representatives and through independent real estate brokers. Its in-house sales force typically works from sales offices located in model homes or sales hubs close to or in each community. Sales representatives assist potential homebuyers by providing them with basic floor plans, price information, development and construction timetables, tours of model homes, and the selection of structural options. Sales personnel are licensed by the real estate bodies in their respective markets, are trained by the company, and generally have had prior experience selling new homes in the local market. The company’s personnel, along with its consultants and professional service providers, carefully design the exteriors and interiors of each home to coincide with the lifestyles of potential homebuyers.
As of December 31, 2024, the company owned 446 model homes that were either completed or under construction, including some homes in backlog. It frequently builds model homes at its projects and has them professionally decorated to display design features. In addition, the company has invested in online sales solutions, such as virtual tours, online design studios, and interactive floorplans, to allow homebuyers to tour its homes virtually rather than physically. Interior decorations vary among the company’s models and are selected based upon the lifestyles of its homebuyers. Structural changes in design from the model homes are not generally permitted.
The company typically sells homes using sales contracts that include cash deposits by the purchasers. The cancellation rate of homebuyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was 10% for the year ended December 31, 2024. Cancellation rates are subject to a variety of factors beyond the company's control, such as adverse economic conditions and increases in mortgage interest rates. The company’s inventory of completed and unsold production homes was 464 homes as of December 31, 2024.
Homebuyer Financing, Title, Escrow, and Homeowners Insurance Services
The company seeks to assist its homebuyers in obtaining financing by arranging with mortgage lenders to offer qualified homebuyers a variety of financing options. The company’s financial services operation (‘Tri Pointe Solutions’) comprises mortgage financing operations (‘Tri Pointe Connect’), its title and escrow services operations (‘Tri Pointe Assurance’), and its property and casualty insurance agency operations (‘Tri Pointe Advantage’). Tri Pointe Assurance provides title examinations for its homebuyers in the Carolinas and both title examinations and escrow services for its homebuyers in Arizona, Colorado, the District of Columbia, Maryland, Nevada, Texas, Washington, and Virginia. Tri Pointe Assurance is a wholly owned subsidiary of Tri Pointe and acts as a title agency for First American Title Insurance Company. Tri Pointe Advantage is a wholly owned subsidiary of Tri Pointe and provides property and casualty agency services that help facilitate the closing process in all of the markets in which the company operates. While Tri Pointe Connect was formed as a joint venture with an established mortgage lender and operated, effective February 1, 2024, the company acquired the minority interest in the joint venture, upon which Tri Pointe Connect became a wholly owned subsidiary of the company.
Seasonality
The company has experienced seasonal variations in its quarterly operating results and capital requirements. It typically takes orders for more homes in the first half of the fiscal year than in the second half, which creates additional working capital requirements in the second and third quarters to build its inventories to satisfy the deliveries in the second half of the year (year ended December 31, 2024).
History
The company was founded in 2009. It was incorporated in 2015. The company was formerly known as TRI Pointe Group, Inc. and changed its name to Tri Pointe Homes, Inc. in 2021.