Investors

FOR IMMEDIATE RELEASE

CONTACT: Paul Columbus
OFFICE: 703/761-2414

January 28, 1999, McLean, VA-NVR, Inc. (AMEX: NVR), one of the nation's largest homebuilding and mortgage banking companies, today announced that earnings per share before extraordinary losses from the early retirement of debt for its fiscal year ended December 31, 1998 exceeded 1997 earnings per share by 128%. Net income before extraordinary items for 1998 was $66,107,000, $4.97 per diluted share, compared to $28,879,000, $2.18 per diluted share, for 1997. The Company recognized a $7,126,000 extraordinary loss during 1998 from the retirement of its 11% senior notes due 2003 and a $2,275,000 extraordinary loss from the early extinguishment of debt related to a capital lease obligation. Including the extraordinary losses, net income for 1998 was $56,706,000 ($4.26 per diluted share). Consolidated revenues for 1998 totaled $1,559,816,000, a 31% increase from $1,188,289,000 for 1997.

Net income before extraordinary items for the fourth quarter of 1998 was $14,993,000, $1.16 per diluted share, compared to $5,067,000, $0.39 per diluted share, for the same period of 1997, a 197% increase. Including extraordinary losses of $2,652,000, net income for the current quarter was $12,341,000 ($0.96 per diluted share). Consolidated revenues for the fourth quarter of 1998 totaled $402,545,000, a 23% increase from $327,624,000 for the same period in 1997.

Homebuilding

New orders for 1998 totaled 9,000 units, a 35% increase over the 6,686 units reported in 1997. Home settlements for 1998 increased 25% to 7,622 units when compared to the 6,107 units closed in 1997. Backlog at the end of 1998 (4,573 units) was 43% higher than the 3,195 units in backlog at the end of 1997. The dollar volume in backlog increased 54% to $958,757,000 at December 31, 1998, when compared to the previous year-end. Gross profit margins increased to 15.3% in 1998 from 13.7% in 1997 due to more favorable market conditions and continued emphasis on the control of construction costs.

New orders for the fourth quarter of 1998 increased to 2,384 units, a 30% increase when compared to 1,834 units for the fourth quarter of 1997. Settlements increased in the fourth quarter of 1998 to 1,915 units, 15% more than the same period of 1997. Gross profit margins improved to 15.4% in the 1998 fourth quarter compared to 13.7% for the same period in 1997.

Mortgage Banking

Operating income from the mortgage banking segment increased for the 1998 fiscal year to $15,968,000, a 235% increase from 1997. The primary reason for the improvement was an 83% increase in mortgage loan closings.

Operating income for the fourth quarter of 1998 was $4,039,000, up 144% from the $1,656,000 recognized during the same period of 1997. This was primarily attributable to a 77% increase in mortgage loan closings when compared to the fourth quarter of 1997.

General

Chairman and chief executive officer, Dwight Schar said, "Earnings from continuing operations have increased at a compound annual rate of 75% over the last four years, from $0.53 per diluted share in 1994 to $4.97 per diluted share in 1998. Our growth has been dramatic, but more importantly, it has been very efficient. The increase in earnings combined with our capital management strategies have resulted in the best returns on capital and equity in the industry."

"We continue to be optimistic about 1999. We begin the year with a very strong backlog of undelivered homes. If market conditions remain stable, 1999 will be another great year," commented Schar.

The Company also stated that its share repurchase program is continuing. Fourth quarter repurchase activity resulted in 10,385,839 shares outstanding at December 31, 1998.