Homebuilding's muscle memory is fully engaged.

It's "back-to-basics" time. Heads down. Sweat the small stuff. Control what you can; prepare for what you can't. Cut, cut, cut, and, meanwhile, drive to move sales — whatever it takes.

At a moment when uncertainty defines the housing market — rates stubbornly high, affordability stretched, and volatility the rule rather than the exception — one of the clarion call messages from this week’s Focus on Excellence Leadership Summit in Denver rang clear.

It came from Marc Minor, co-founder and CEO of Higharc, and it wasn’t a plea for patience or a forecast of better days. It was a rallying cry.

In the middle of turbulence, he told homebuilding leaders, you can’t afford not to be experimenting with AI—right now.

The Hardest Problem in the Industry

Minor began by reminding the audience just how complex the homebuilding business really is.

Homebuilding is a unique market,” he said. “It has productized homes that are also continually changing. And the reality of continual change is what makes the problem of innovation—and of any technology—really, really hard.”

In his view, this difficulty has less to do with reluctance and more to do with structure. Builders operate in a fragmented ecosystem of PDFs, disconnected systems, and manual hand-offs.

What you ideally want,” Minor said, “is an integrated thread of data about the things you’re building — from the specification and design all the way through distribution. But we don’t have that. We have very disintegrated systems, and we don’t have data. We have PDFs that get passed around.”

This disconnection, he argued, makes innovation extraordinarily difficult.

Everybody’s like on the factory floor, on the assembly line,” he said. “How do you upgrade the line without stopping it? It’s really hard.”

Short-Term Pain, Long-Term Gain

That difficulty has bred a culture of hesitation around technology investment.

Our industry is not known for substantial outside investment in technology,” Minor said. “The available tools for homebuilders are probably old and weak.”

Even the tools that are most widespread — the ERPs most builders depend on — may lack the interoperability needed to integrate innovation.

Data quality is an enormous problem there,” he said. “It’s supposed to be this kind of core operational data of the business. But the data hygiene is pretty bad nearly everywhere we look. And almost nobody has an API.”

That absence of clean, normalized, interoperable data prevents software from communicating and makes genuine transformation nearly impossible. For Minor, the barrier isn’t money—it’s will and structure.

Short-term pain for long-term gain” is how he framed the trade-off.

Without new patterns of change management, he warned, the industry’s habit of delay will keep it lagging behind every other sector of the economy.

The Both-And Imperative

In Denver, Minor’s remarks resonated precisely because they captured the tension that every homebuilding CEO and division president now feels. The job is no longer to choose between lean operations and innovation. It’s to do both at once—to run tighter, faster, and smarter while simultaneously reinventing processes through AI and data integration.

In my opening to the conference, I described this as a “both-and” era.

Strategic leaders must keep focusing on the basics—cost control, construction efficiency, accountability, and quality—while also building the capacity to imagine and implement change.

Marc Minor made that abstraction concrete.

His message: you can’t wait until things stabilize to experiment with AI; it’s the instability that makes the experimentation essential.

The Call to Action

Minor didn’t just offer an abstract principle. He issued a practical assignment every builder could start on Monday morning. Every homebuilding firm, he said, should identify one or two high-aptitude young team members and give them explicit time each week to work with generative-AI tools—ChatGPT, Claude, Gemini, or any other platform—on solving operational problems across the company’s workflow.

That means letting them explore how AI could help improve land-acquisition models, pre-construction planning, design iteration, construction scheduling, customer communication, and warranty triage—the full life cycle of the build. The goal isn’t a perfect tool; it’s learning, discovery, and organizational adaptation.

The builders who empower that kind of structured experimentation, Minor argued, will be the ones who survive the next decade of disruption. Those who don’t risk being left with outdated systems and exhausted teams running in circles around problems that AI could already be helping to solve.

Change Management as a Core Capability

The other thread running through both Minor’s remarks and our discussions in Denver was that change itself must become a core capability. Homebuilding has never been short on grit, good, honest know-how, or craftsmanship, but its next chapter depends on a different muscle: the ability to evolve continuously, not episodically.

As I said to the audience in my opening remarks,

We’re entering an age when the winners will be the firms that can pivot fast, align teams around transparent data, and make uncertainty their ally.”

That requires a culture that welcomes experimentation and tolerates short-term pain for long-term learning—precisely the point Minor underscored.

Why It Matters Now

The urgency behind Minor’s message comes from timing. With home prices high, financing tight, and consumer confidence uneven, most builders are tempted to retrench—to double down on execution and defer innovation. But that instinct, Minor suggested, could be fatal.

It’s very hard to stick it out with any kind of technology product,” he said. “Even something as fundamental as an ERP.” Yet without that endurance and investment, the industry’s inefficiencies will only deepen.

In other words, the volatility that makes innovation feel risky is the same volatility that makes it essential.

The Leadership Challenge Ahead

For homebuilding’s senior leaders, the takeaway from Denver was unmistakable: change management isn’t a project; it’s an operating system. The decision to assign a pair of sharp, curious minds to test AI applications inside the company isn’t symbolic—it’s strategic, and in fact, it's the new basics to get back to now. It’s how a firm starts building the reflexes of adaptation before disruption forces them.

Marc Minor’s manifesto at Focus on Excellence distilled that truth into one imperative: upgrade the line without stopping it. That is the paradox every builder now faces. The companies that figure out how to do it—balancing execution discipline with structured innovation—will define the next generation of homebuilding.

Because, as Minor reminded the room, the industry’s most significant constraint isn’t technology itself. It’s courage—the courage to act before certainty arrives.

Frequent changes, whether positive or negative, can cause uncertainty in global markets. The United States is one of the most influential actors in the global market, as highlighted by the effects of U.S. tariffs on global economies. Uncertainty, rather than supply or demand, is the primary driver for volatility in commodity materials used in home construction today. Tracking commodities helps us predict changes in building materials pricing before they occur.

(Wouldn’t that be nice?)

Some of our most critical commodity-tracking data, such as the Producer Price Index, is unavailable for September due to the government shutdown. As a result, September’s data will be delayed until the Q4 report. 

In general, most commodities are trending slightly downward, suggesting this trend continued through September. We won’t know for sure until the government reopens and the reports are generated and posted online. 

Consistent with commodity price trends, many of the homebuilders we work with say their costs are declining as they rebid projects. The lower demand for new-home construction is rippling throughout the supply chain, except for large capital projects.

Commodity volatility has been fairly predictable, affecting steel, copper, aluminum, cars, pharmaceuticals, and textiles, among other industries. The latest tariff announcement, however, caught me off guard. Kitchen cabinets will face a 25% tariff beginning Nov. 1, rising to 50% on Jan. 1. I don’t know the volume of imported cabinets, but this will likely erase any pricing benefit. I guess that’s the idea. 

I want to remind homebuilders that any price concessions received via rebidding are temporary. Reductions in house costs achieved by removing costs, not margins, from the supply chain are more likely to be permanent. Slow sales can be painful for an organization, but they can also be an excellent opportunity to change how materials and labor are procured and applied. Now is the time to bargain with your labor and material suppliers to do things differently. 

Quarterly Highlights

In the table below, it may seem less relevant to continue comparing with 2019, but we think it is important to stay grounded in pre-pandemic metrics so we do not become content with today’s prices as the new normal. Making houses more affordable depends on our ability to reduce costs. Building material prices were not exactly low in 2019, but it’s a good benchmark — for now.

Aluminum Wire

With more homebuilders using copper-clad aluminum wiring, the aluminum wire commodity pricing index is among the top five on our watch list. Currently, aluminum wire prices are up 94% since January and have surged 1391% (not a typo) since 2019. Most of the aluminum wire we use in the U.S. is made here, so we do not think this is a tariff-related increase. We suspect wire manufacturers are making moves to offset margin losses due to rising aluminum wire sales and declining copper sales.

Copper Wire

Copper wire prices dropped 35% in early October, and are still 94% above January prices. Pricing for this product is mainly driven by supply and demand. About 87% of copper wire is made in the U.S. and not impacted by tariffs. We expect continued volatility due to waning residential construction demand and accelerating demand from A.I. data centers and supporting power distribution. Currently, copper wire is up 94% and has increased 162% since 2019.

Carpet Fibers

The YTD change in pricing is flat, due to a slight downward trend from April to September (and likely October, too), which offsets the increases in Q1.

Lumber

Lumber prices continue to bounce along the bottom. The patient buyer can find deals. Lumber mills have been threatening curtailments for months, yet few have shut down. Instead, they are cutting shifts and hoping this won’t last long. The risk of not getting labor back after a shutdown is enough to keep operating at break-even.

OSB is at a 10-year low. Time to stock up?

Diesel Fuel

Do you remember getting fuel surcharges from your trade contractors and material suppliers when the cost to fill up the tank rose? What happens when fuel prices go down 38%—do you get a discount off current invoices?

Cement and Ready-Mix

Cement and concrete demand is driven by commercial construction, especially large capital projects. Current prices are up 11% since January, and up 166% since 2019.

Acrylic Resins

Oil prices are on a downward trend, but are still 21% above January numbers. We suspect that acrylic resins will trend downward over the coming months, as we cannot find any reasons for high demand. Acrylic resins are used in a variety of products, including vinyl windows, carpets, plastic pipe (PVC, ABS, PEX), cultured marble, housewrap, paint, exterior insulation, acrylic stucco, vinyl fencing, and any application that requires adhesive (such as plywood, wood flooring, and laminated beams).

• PPI – Producer Price Index (this data sometimes lags 1-3 months in reporting)
• ENR – Engineering News Record (most cost reports are only 1 month old)
• EIA – U.S. Energy Information Administration
• CA DOT – California Department of Transportation
• FL DOT – Florida Department of Transportation
• Southwire – the largest manufacturer of electrical wire in the U.S. and in the world

Looking Around the Next Corner

Over decades of experience, my most successful negotiations have occurred during periods of slow sales. Whether it’s because trade contractors, building material suppliers, and I have had more time on our hands, or because we’re just more willing to talk about uncomfortable things like change, I’m not sure.

Maybe a little bit of both.

We tend to think of negotiations as applying only to pricing, but sometimes we negotiate for a new process or way of doing things. I once asked my electrical supply company to ship door hardware to our job sites with the light fixtures. These two sets of products are delivered to the same house on the same day, as part of a typical construction schedule. We met weekly and discussed (my favorite word for “negotiate”) this new process for two months before they agreed, and we only spoke about pricing on the last day.

The Building Industry Association of San Diego taught us that it only takes four hours to build a house (see the YouTube video). We know there are ways to significantly speed up the construction process, but it’s tough to break from the tradition of doing things the way we've always done.

Putting door hardware and light fixtures on the same delivery truck was a no-brainer. Why hadn’t it been done years before? Because the electrician and the finish carpenter typically do not talk to each other. It took me, the homebuilder, to step back and look at the whole process to see it.

The constant material and labor price increases of the past several years are currently in a lull, but as soon as the market picks back up, those high prices will return. The best thing a homebuilder can do right now is improve how we build homes, ensuring the cost advantages are permanent.

Slowing growth, stubborn inflation pressures, and only modest mortgage-rate relief set the backdrop for builder decisions over the next 18–24 months.

Cristian deRitis, Deputy Chief Economist at Moody’s Analytics, delivered the Tuesday morning keynote at The Builder’s Daily Focus On Excellence summit in Denver. What follows is an analysis drawn from that talk — aimed at what public and private homebuilding operators should take into 2026 budgets and 2027–2030 plans. All quotations are verbatim from the session.

For firms trying to finalize 2026 budgets and lock in 2027–2030 trajectories, deRitis’ message boiled down to this: expect a longer “grind” than a “pop.” Rate cuts may continue, but spreads and inventory frictions will keep housing’s normalization slow, market by market.

Various uncertainties, including the impacts of tariffs, AI, and Federal Reserve policy, also muddy the future outlook.

Outlook for the Broader Economy 

Government data reported a 3.8% annual GDP growth rate in Q2, but there are some real fault lines in the economy under the surface, according to deRitis. 

Inflation is expected to rise from 2.8% to 3.6% next year, bolstered by the effects of tariffs, and the unemployment rate is expected to rise 40 basis points between this year and next as hiring slows down. 

The private payroll diffusion index, which tracks the extent of job gains or losses across various private sector industries, was at 48.0 in August. A diffusion index below 50 is typically associated with a recession, revealing an underlying weakness in the economy. 

Most of the spending growth is concentrated among the top 10-20%, while lower income percentiles maintain their spending on essentials, often while using credit. 

Mortgage Rates Could Hover Over 6% Next Year

The Federal Reserve delivered a 25-basis-point cut to its benchmark interest rate on Wednesday, bringing the federal funds rate to its lowest level in three years. HousingWire’s Mortgage Rates Center shows 30-year conforming loan rates averaging 6.27% as of October 29, down from a high of 7.18% in January. 

deRitis expects the Federal Reserve to continue cutting rates through 2026, but he cautions against pinning hopes on a swift reset lower. He anticipates that the 30-year fixed-rate will decrease modestly and remain at or slightly above 6.0% through 2026.

The implication, then, for the 30-year fixed-rate mortgage is a very gradual decrease over time. We'll get some stimulative impact here,” deRitis said. “If you told me we are going to dip down below, say, 6% that's certainly within the range. Our mortgage rate spreads are still quite wide, but that's only going to have a moderate impact in terms of the housing market.”

Planning Implications

• Sales pacing & incentives: Budget for incentives as a structural line item, not a temporary lever. With rates hovering near ~6% and spreads sticky, price discovery will remain delicate; assume “moderate” incremental demand from rate relief.
• Spec vs. BTO mix: Maintain optionality. BTO can support margins in select submarkets, but spec remains essential to capture the thin bands of urgency the market still produces.
• Starts discipline: Track absorption-to-start ratios weekly. “Even flow” planning should anticipate sideways demand into 2027.

Construction Costs and Labor are Concerns

Construction costs continue to outpace inflation, led by steel, copper, and gypsum. One positive from the perspective of margin-squeezed builders looking to cut costs, but not necessarily from that of workers, is that wage growth in construction is increasing at roughly the same rate as inflation. 

We haven't seen much in the way of wage growth construction, at least not on a national basis,” deRitis explained. 

However, many observers fear that the Trump administration’s immigration policies could exacerbate what is already a labor shortage in the construction industry. Employers may have to raise wages to attract workers as a result. 

We know that labor is a big component in many Southern and Western markets. You definitely have to keep an eye out here, too. Demand should start to increase. You can certainly see some of those wage impacts rising here,” deRitis said. 

Home Sales Decline and Inventory Challenges Remain

By some measures, the housing market is in more of a recession than growth for the economy,” deRitis claimed. 

He pointed to low home sales as the reasoning behind this claim and high interest rates as a major culprit. 

Larger mortgage rates are locking out potential home buyers, and they're locking in existing homeowners.”

There is a structural housing deficit of nearly 2 million homes, deRitis's research shows, partially driven by a vacancy gap but also primarily by pent-up demand from young adults aged 25 to 35 who are currently living with family or roommates and can’t afford their own housing. 

This gap could correct itself and transition into a surplus as Baby Boomers begin to retire en masse and downsize, and as population growth slows. 

deRitis also pointed to a bipartisan capital gains tax reform proposal that would raise the exclusion for the sale of a primary residence from $250,000 to $500,000 for single filers and from $500,000 to $1 million for joint filers. The proposal, if enacted, could incentivize more established homeowners to sell their homes and introduce more inventory into the market. 

Planning Implications

• Micro-segmentation: Tighten price-point bands and product elevation choices by submarket; remove SKUs that create construction drag without driving turns.
• Option strategy: Nudge margins with finish-level options that don’t impede cycle time.
• Sales ops: Calibrate digital lead routing and online sales consultant follow-ups to capture smaller, episodic waves of readiness.

New Home Starts Could Stabilize

Unsold new home inventory also remains high at roughly half a million, just shy of the peak during the housing bubble of 2006-2007. As a result, builders have steadily reduced the number of new single-family homes under construction. 

Home starts are expected to stabilize — or even modestly decline — through 2027 at about 1 million annually, according to deRitis’ forecast. 

There is still the structural demand out there, so there's still certainly room for additional demand to fill homes. But until we work off the inventory, and until we really come back down to our normalized market in terms of the lock-in effects, in terms of the lock-out effects, it's going to be sideways here.”

Home Prices Will Grow Modestly, but Regional Differences Persist

Moody’s expects home prices to flatten through 2027, although a crash is highly unlikely, and the results are variable depending on how certain risk factors in the economy evolve. 

The baseline growth forecast is 0.7% for the next year. Three years out, the baseline is 1.0% growth, and five years from now it is 1.7%. 

Essentially, what this forecast embodies is a period of transition here where prices got ahead of incomes, they got ahead of rents, and we're allowing the market to correct itself, grow into the prices that we have in the markets, and then as we go beyond 2027, we're kind of back to a more normalized house price growth,” deRitis said. 

However, home price growth varies widely across markets and regions. Prices are expected to decrease in many Midwestern markets and the Sunbelt, especially in metro areas that boomed during and immediately after the COVID-19 pandemic. Examples of such markets include Miami, Dallas, Austin, Nashville, Phoenix, and Charlotte. 

On the other end of the spectrum, many Northeastern and Western markets that retracted during COVID are expected to see the highest home price growth. Seattle, Silicon Valley, Pittsburgh, Baltimore, and Boston exemplify this trend. 

Planning Implications

• Market picks: Lean into markets with income growth tailwinds and lower regulatory drag; be surgical in Sunbelt boom metros where reversion risk is higher.
• Land underwriting: Stress test takedowns at flat price scenarios and conservative paces; re-underwrite Phase II/III against updated absorption.
• Active adult & BTR: Expand in 55+ and BTR segments where demographic and affordability vectors support steadier velocity.

The Uncertainty Ahead, Key Takeaways, and Opportunities

The near- and medium-term impacts of tariffs, AI, national foreign policy, mass deportations, and future Federal Reserve policy aren’t yet known.

What is clear is that homebuilders will need to tailor a regional strategy to match the unique conditions of each market.

On a national level, the housing market could normalize by 2027 as builders work through their existing new home inventory and new home starts begin to level off. 

deRitis pointed to opportunities in active adult and 55+ communities as Baby Boomers look to downsize. There is also potential for growth in build-to-rent and opportunities for builders to partner more extensively with municipalities on workforce and affordable housing, as the average consumer remains squeezed.

What to Do Between Now and Q2 2026

1. De-risk the 2026 land book. Swap options where entitlement timelines collide with slowing absorption; accelerate fee-build, JV, and land-bank structures to stay asset-light.
2. Cash over GAAP. Protect cash conversion by shaving days across pre-dev, starts, inspections, and COs. Treat every saved day as a margin lever.
3. Price governance. Weekly price councils with real-time comps, MLS resale reads, and OSC pipeline signals. Avoid “set-and-forget” list prices.
4. Cycle-time analytics. Instrument your build with stage-gate timestamps; reward superintendents and trades for predictable handoffs more than occasional sprints.
5. Channel mix. Strengthen broker relationships where lock-in suppresses organic traffic; keep buy-now/online pathways clean for off-hours conversion.
6. Scenario sets. Run base/low cases with rates ~6%+, mortgage spreads sticky, and flat prices; tie bonus plans to cash, cycle-time, and customer satisfaction, not just gross margin.

As U.S. homebuilders retrench from aggressive land positions — cancelling contracts, slowing takedowns, and retrading previously negotiated deals — the land risk pendulum is swinging in real time. Yet Millrose Properties, the giant landbanking and horizontal development platform spun out of Lennar, posted Q3 2025 results that run counter to that trend: no builder walkaways, no renegotiations, and strong capital deployment velocity.

This isn’t just good news for Millrose — it’s a case study in what resilience looks like when land strategy meets operational precision.

Where many builders are dialing back on new lot exposure to preserve margin and liquidity, Millrose has doubled down on disciplined underwriting, structured contracts, and a data-first technology platform that screens every deal against real-time market risk.

The firm’s ability to average 138 homesite takedowns per business day across 12 builder relationships — without a single partner balking — offers a sharp contrast to peers navigating a high-stakes environment of uncertain pace and profitability.

Millrose isn’t immune to macro volatility. But its performance this quarter reinforces a key emerging dynamic in the current cycle: in a risk-off market, platforms with capital discipline, tech-enabled transparency, and carefully selected partners are the ones still playing offense.

Here’s the deeper look at how Millrose pulled it off — and what it signals for land strategies heading into 2026.

The company’s Q3 2025 earnings reveal an operator navigating today’s choppy waters with a sound, technology-driven, risk-averse approach to growth as it shifts away from its reliance on Lennar.

The land banking and horizontal development firm posted strong growth, even as many homebuilders, such as Tri Pointe Homes, are scaling back new home production amid declining homebuyer demand, price constraints, softening consumer sentiment, and economic uncertainty. 

Shareholders may be pleased to learn that Millrose hasn’t had a single homebuilder walk away from or renegotiate a contract despite these challenging market conditions. CEO and President Darren Richman largely attributed this strong performance to the company’s underwriting standards and technology, which allows for thorough due diligence when evaluating deals. 

The due diligence screening that we do as part of our overlay is really the glue that holds this all together,” Richman said. 

How Technology Sets Millrose Properties Apart

For Millrose, its focus on technology brings three distinct advantages that deliver strong results for its clients and robust due diligence in deal evaluations, according to CTO Adil Pasha. 

First, Millrose has created a rich, proprietary data set derived from the company’s deal flow, transactions, and builder sales reports, which aids in due diligence. 

This data moat gives us unique insights into underwriting transactions and monitoring market risk. We are also beginning to leverage AI to drive novel insights from this data set and further automate internal processes,” Pasha explained. 

Secondly, Pasha boasted that Millrose has mastered M&A execution through its underwriting capabilities, including its involvement in Lennar’s acquisition of Rausch Coleman Homes and New Home’s acquisition of Landsea. 

Our ability to partner with builders to rapidly underwrite and integrate hundreds of communities is a direct result of our proprietary data platform, which automates the ingestion and management of all aspects of land banking data."

Lastly, the technology enables high-velocity transaction processing, empowering Millrose to average 138 homesite takedowns per business day.

Choosing Partners Wisely 

After Millrose split off from Lennar, the two parties agreed to the Lennar Master Program, in which Millrose acquires land and grants Lennar options to purchase homesites on those properties. 

The partnership is vital to Millrose’s success. Still, the company has also worked diligently to build relationships with more homebuilders — currently, the operator partners with 12 distinct homebuilders, up from 11 in the previous quarter. 

During the call, Richman gave a special shoutout to Millrose’s partnership with Taylor Marrison’s Yardly build-to-rent brand to exemplify the kind of builder that the company seeks to work with. 

We’re also looking for a counterparty that is really a partner, and we're looking for counterparties that are looking to do business for capital efficiency, not risk mitigation.”

According to Richman, Millrose “would rather pass on those relationships than try to eke out a little bit more spread" while taking on a lot more risk.

Millrose views technology as a core competitive advantage, enabling the company to scale up more quickly and deliver superior service and operational efficiency to its clients. According to executives, this allows the company to be selective in its partnerships. 

Given the demand we have observed, we also have the ability to remain selective in our partnerships,” Richman said. “This has helped to buttress our portfolio during the recent market stress.”

Mitigating Risk is a Core Principle

Millrose’s strict underwriting standards and due diligence, bolstered by its technology, are key to its decision-making when determining which deals to pursue — and which to turn down. 

Part of our risk underwriting is that we're always, as we said, evaluating a homebuilder's assumptions around price and pace and ultimately, the gross margin they project on those communities. And we, in this quarter, just as in all other quarters, turned down a substantial amount of deals because we didn't think they were set up for success, in that our own unique independent data sources were not necessarily consistent with the builders' underwriting,” Richman explained. 

Millrose also structures its transactions to mitigate risk by securing large deposits and using cross-termination pooling mechanisms to protect itself if a deal goes south.

However, Millrose’s contracts remain in a strong position due to the operator’s steady, disciplined growth, even in a soft market marked by muted homebuyer demand. Richman claimed that his team hasn’t seen any meaningful changes in their business.

We would highlight it, and we just haven't seen it. It really has been sort of business as usual for us, which has been great. And it's not like we haven't seen what's going on in the backdrop, but you got to remember, we've underwritten all these assets. These are mission-critical assets. These are irreplaceable assets, by and large, and we would expect that the builders would continue to take them down almost regardless of what is going on in the backdrop.”

Maintaining Flexibility With Partners

Despite this strength, Millrose isn’t naive about the realities of the current market. While the company’s partners have not yet walked away from or renegotiated a deal, future renegotiations may be necessary if needed. 

If a builder, for example, needs to reduce the number of monthly takedowns, Millrose is open to negotiating. 

We haven't had to make accommodations outside of what our builder counterparties are entitled to, but we would definitely be open if asked, making sure that we have the capital to do it,” Millrose explained. 

Preparing for Future Growth

Millrose’s invested capital outside of the Lennar Master Program Agreement is $1.8 billion, a bit shy of its stretched quarterly target of $2 billion. The company’s revised target is now $2.2 billion, a $400 million increase from its current position. 

The firm strengthened its financial position in Q3 through a strategic debt raise, but remains committed to a conservative approach to debt. The company has a debt-to-capitalization ratio of about 25% and expects to maintain a conservative maximum of 33% going forward. 

We're comfortable based on all the liquidity we have today and our capital pipeline that we can serve everything, and there does remain additional capacity to bring on new customers,” COO Robert Nitkin said. 

Key Takeaway

Millrose maintained a strong position in Q3, with no customers walking away or renegotiating contracts, even though many homebuilders are pulling back on new home starts. 

The company’s commitment to a technology-driven, data-informed underwriting approach, along with its selective selection of homebuilding partners, is a big reason for this success. 

While Millrose has its own unique business focus, its approach to evaluating deals could offer insights for other firms looking to leverage data and technology more effectively in their due diligence. 

The clock is ticking for Arkansas municipalities to overhaul their local zoning codes to comply with a new state law, effective Jan. 1, that aims to boost housing supply through accessory dwelling units.

The legislation, known as Act 313, mandates that all cities and towns permit these small, secondary homes on any residential lot with a new or existing single-family house, a move state leaders hope will unlock new housing options amid a persistent shortage.

With the law, which took effect on August 5, 2025, Arkansas joins the growing ranks of states trying to address a housing shortage. This is particularly true in Northwest Arkansas. The law represents a significant shift in state housing policy, stripping away local barriers that have long prevented or complicated the construction of ADUs.

The state's primary motivation was to address a growing housing affordability crisis by increasing the overall housing stock. By allowing homeowners to build "by-right"—without needing a special permit or public hearing—lawmakers aim to create a more flexible and responsive housing market.

ADUs present a practical solution to expand housing supply economically," Groundwork, a workforce housing organization for Northwest Arkansas, said in May after the law was signed.

Housing Challenges

While the law is statewide, housing availability problems have been more pronounced in Northwest Arkansas, one of the nation's 20 fastest-growing metro areas. Population growth outpaced home construction in recent years.

Northwest Arkansas is home to the corporate headquarters of two of the state's largest employers. Walmart, headquartered in Bentonville, employs over 54,700 Arkansans, making it the state's top employer. Tyson Foods, a poultry processing giant based in Springdale, is the state's second-largest employer.

Between 2019 and 2025, the median rent for multifamily housing increased by nearly 50%, and home prices jumped by 70.9%, according to a report from the Walton Family Foundation.

Our region is at an important juncture, requiring action to ensure affordable and accessible housing for all residents," Robert Burns, director of the foundation's Home Region Program, said in a statement when the report was released.

With the regional population projected to exceed one million by 2050, the report noted that the need for affordable options is becoming more urgent. A projected sharp decline in construction activity this year could further strain the market and intensify the existing housing challenges.

The surge in housing costs has exacerbated the region's affordable housing shortage. The deficit of rental units affordable to low-income households grew from 7,100 in 2019 to 9,300 in 2025.

Although the overall housing inventory in Northwest Arkansas has expanded, creating more options for some buyers, the market remains imbalanced. New construction has not consistently aligned with demand across all areas.

As of August, some cities, such as Centerton and Lowell, were considered oversupplied, while others, like Rogers, still faced a tight housing supply.

Getting with the Law

Several cities have already begun aligning their local ordinances with the state mandate. The city of Little Rock has been exceptionally proactive, launching a community survey in the summer of 2025 that found strong public support for ADUs.

In response, the city's Board of Directors adopted an interim ordinance Aug. 19 to provide a clear regulatory pathway for homeowners while permanent rules are developed.

Other municipalities are also moving forward. Bentonville and Prairie Grove are among the cities currently drafting amendments to their zoning codes to incorporate the new state requirements.

Lawmakers knew the law could spark resistance from municipalities.

We also understand it's not right to not have affordable homes for people," State Sen. Bart Hester, one of the main bill sponsors, told a local television station. "So we were kind of the bad guys here for a lot of cities. We're going to take it on the chin from the state's perspective, but again, it's the right thing to do."

Act 313 establishes clear, uniform standards for ADUs across the state:

• Size: An ADU cannot exceed 1,000 square feet or 75% of the primary home's size, whichever is smaller.
• Parking: Municipalities are prohibited from requiring additional off-street parking for the new unit.
• Fees: Application fees are capped at $250.
• Flexibility: The law allows for attached, detached, and internal ADUs and does not require the property owner to live on-site.

However, the state law includes limitations that affect its ultimate impact. It does not supersede private neighborhood covenants, which can still restrict ADU construction, and it leaves the regulation of short-term rentals to local governments.

While the legal framework is taking shape, the actual construction of ADUs is still in its infancy. Homeowners must still navigate the standard process of preparing plans, securing financing, and obtaining building permits.

As cities work to meet the approaching deadline, the full effect of the law on Arkansas's housing landscape remains a developing story.

Dallas once had duplexes and other multifamily housing interspersed with single-family homes.

That began to erode substantially in 1945 after the city adopted a comprehensive plan created by a national firm with a long history of separating residential zoning into distinct districts, focusing primarily on single-family housing.

Now, the city is reaching into its past for a solution to current conditions, joining a nationwide movement to restore housing options that were zoned out of existence.

Facing a shortage of diverse housing options, Dallas set a course in April to encourage "missing middle" housing with a landmark ordinance that allows up to eight units under residential code. It cleared the path for a new wave of small-scale residential development aimed at tackling the city's housing affordability crisis.

Dallas' path exists amid a backdrop of Texas lawmakers passing laws this year to allow more density and increase affordability. In contrast, some Dallas suburbs have passed ordinances to circumvent those laws by making it more expensive to build apartments.

The Bartholomew Plan

Like many cities across the country in the 1920s, Dallas instituted single-family zoning.

In 1943, the city hired Harland Bartholomew, who was the first full-time city planner also to run his own consulting firm, to produce an updated comprehensive plan titled "Your Dallas of Tomorrow." At the time of his work in Dallas, the city's population was 338,000, roughly a million fewer than today.

Bartholomew and his firm produced similar plans and zoning recommendations for hundreds of U.S. cities over the course of decades. He was notable for creating separate zoning districts for commercial, residential, and industrial uses that did not mix, with a strong emphasis on building and preserving single-family neighborhoods.

His plans laid the groundwork for decades of land-use policy that today's urban planners are trying to reverse to bring back more mixed-use neighborhoods.

In residential areas, protecting single-family housing was paramount and was to be unencumbered by mixing with duplexes or multifamily housing.

When he started work on the plan, he highlighted in a land-use report that Dallas' land uses were "badly intermingled" and that the city's housing conditions needed significant improvement. Bartholomew favored ownership over renting in single-family areas.

Experience has shown that the single-family neighborhood with a high percentage of ownership is the only type of a neighborhood that can maintain its character successfully over a long period of time," he wrote in the final plan.

At the time, 65% of residents rented—higher than in most comparable cities—and the rate was rising while homeownership declined, according to the report.

In today's world, that would be great news for those in the rental business and unwelcome news for homebuilders. Census data shows that renters still outnumber homeowners, 58% to 42%.

Bartholomew observed "unusually widespread and scattered" duplexes compared with other cities.

There are only a very few single-family areas on the outskirts that are free from the intrusion of duplexes," the report said.

The report observed the same with multifamily. However, it said that new multifamily housing, especially large projects, was located farther from the city center in residential areas, "where they have had or ultimately will have a depreciating effect upon the values in single-family neighborhoods."

His solution was for duplexes and multifamily housing to have their own separate, limited areas within the city while devoting substantially more acreage to single-family zoning.

Bartholomew's zoning philosophy became embedded in the thinking of lawmakers, civic leaders, and many single-family homeowners who fight to stop any encroachment on their neighborhoods from higher density.

Dallas' New Path

While no projects under the new rules have broken ground yet, the ordinance has unlocked development potential by making smaller, multi-unit projects financially viable for the first time in decades. And several are iin the pipeline under review at Dallas Planning.

The ordinance allows residential buildings with three to eight units to be built under the less-expensive, more flexible International Residential Code.

Previously, any structure with more than two units was subject to the costly, complex International Building Code, which is intended for large commercial apartment complexes. This regulatory hurdle made smaller projects, such as triplexes and small courtyard apartments, financially infeasible for most builders.

The change was a direct response to a growing housing shortage and the city's need for a more diverse housing stock. Dallas is projected to add nearly 68,000 new households by 2033, requiring an estimated 6,800 new homes annually to meet demand. By creating a pathway for "consolidated dwellings" of up to eight units, the city aims to fill the gap between single-family homes and large apartment buildings.

This change in Dallas won't solve the housing crisis," Strong Towns wrote in an analysis, noting, however, that it removes a key obstacle. "It creates the conditions where small-scale, bottom-up development can actually happen."

The ordinance is the result of a collaborative effort between the Dallas City Council, the city's Planning and Development Department, the Dallas Fire Department, and local architects and developers. A working group focused on ensuring life safety while removing unnecessary regulatory barriers that stifled innovation.

Under the new rules, buildings can be up to three stories and 7,500 square feet without requiring expensive fire sprinkler systems and are allowed a single interior exit stairway, significantly reducing construction costs.

It aligns with the city's broader goals outlined in its 2033 Housing Policy and the "Forward Dallas 2.0" land use plan, both of which emphasize the need for more housing diversity.

The impact is expected to be gradual but significant. Housing advocates believe the ordinance will make it easier for smaller, local developers to build infill housing in existing neighborhoods, promoting walkability and what is often called "gentle density."

By making it easier and cheaper to build a fourplex than a massive apartment block, Dallas has taken a critical first step toward creating more affordable and inclusive housing options for its residents that existed in the first half of the 20th century.

For homebuilders who depend on bank financing to acquire land, develop lots, and get homes vertical, the past three years have felt like watching the walls slowly close in.

In fact, according to the National Association of Home Builders (NAHB), this past quarter marked the 14th consecutive quarter of tightening credit conditions on land acquisition, development, and construction (AD&C) loans. And with lending standards continuing to ratchet up, the resulting squeeze is becoming existential.

FDIC data reported that 1-4 family construction and land development loan volume dropped 2% year-over-year to $89.8 billion in Q2 2025. While the cost of capital remains historically high—effective interest rates hovering above 12% on both speculative and pre-sold single-family loans—it’s access, not price, that’s becoming the real threat.

Builders are getting turned down not because their deals are flawed,” says Rebel Cole, finance professor and former Federal Reserve economist. “They’re getting turned down because banks simply don’t want to carry the risk on their balance sheets anymore.”

That reluctance, Cole says, is rooted in regulatory pressure, tighter capital reserve requirements, and the lingering risk aversion that’s characterized regional and community banks since early 2023. What it amounts to, however, is a growing number of well-run small-to-mid-sized builders who suddenly find themselves shut out of traditional funding channels.

What Happens When the Banks Say No?

For builders, the pain isn’t theoretical — it’s operational. The latest NAHB survey notes the most common tightening actions: lenders are reducing loan amounts (60%), requiring personal guarantees (53%), hiking rates, or simply not making new loans (47%).

Banks have become unpredictable, inconsistent, and slow,” says Robb Kenyon, President of Sound Capital. “That’s not a foundation any builder can grow on.”

Sound Capital, a Seattle-based private lender specializing in residential construction finance, has built its business on the opposite premise: fast decisions, deep builder relationships, and a flexible underwriting model that leans into what banks see as risk — but what Kenyon’s team sees as opportunity.

We don't just write a check,” Kenyon explains. “We visit job sites. We meet subs. We understand the builder's DNA. That’s how we underwrite—through the lens of a partner, not a policy.”

It’s a sharp contrast to what many builders face when walking into a bank: rigid loan committees, sleepless nights spent on personal guarantees, tight covenants, and lending formulas that fail to reflect the nuances of local markets.

From Friction to Fluidity: What Builders Need Now

What’s emerging now among small to mid-sized production homebuilders — especially those focused on attainable price segments — is a deepening split between those with the capital flexibility to act, and those without it. As uncertainty drags on, builders are being forced into high-stakes decisions: protect margins and stall, or sacrifice profits for the chance to build future-ready operations and communities.

In fact, this moment feels eerily familiar. As we wrote here in The Builder’s Daily:

Fifteen years ago, private homebuilders last faced an operating and selling environment this unforgiving… Back then, the housing crash was a single, seismic event. Today, it’s a rolling, uneven grind… For many private operators, their traditional lenders are stepping back from the table just when capital is most needed.”

Those conditions are forcing a strategic pivot among a minority of builders—those who’ve managed to reprogram their land pipelines and product lines around less price-sensitive buyers, while others stay stuck in reactive mode.

I don’t want to sit around and flounder and make no money,” said one private builder executive, quoted in the same piece. “I’d rather use this time to get some good land deals… build a national model that — while it may not be making much money now — is positioned to explode when the market picks back up.”

That logic — trading margin for market positioning — is not academic. It shows up in data from Wolfe Research’s July Private Builder Survey, where orders rose 3.2% month-over-month despite worsening gross margins. Builders are actively absorbing near-zero-profit conditions in exchange for better land basis, leaner construction operations, and a more fluid sales cadence. It’s this kind of strategic repositioning that Sound Capital’s platform is built to support.

The result is that builders are increasingly seeking out financing partners who don’t just approve loans — but support business growth. For many, that means shifting toward private capital, even at a premium.

What a builder values most is reliability,” says Gary Elwood, Executive Vice President and Chief Marketing Officer at Sound Capital. “Can I count on you? Can I move on land? Can I close and start my project? If the answer is yes, the cost becomes less of a barrier.”

Sound Capital’s approach, Elwood says, is structured to deliver exactly that — speed, clarity, and a long-term view that prioritizes the builder’s business goals.

Our model was built with builders in mind,” he adds. “We have provided over $3 billion in funding for builders. That only happens when builders feel you’re on their side.”

While banks may slow-walk approvals or pause lending altogether due to macroeconomic caution, Sound’s underwriting is grounded in real-time local market intelligence.

We’re looking at the dirt, the demand, the execution plan—not just spreadsheets and comps,” says Kenyon.

The Larger Shift: Not Just a Temporary Workaround

To be clear, this isn’t just a momentary workaround in a difficult cycle. Rebel Cole suggests it may represent a structural shift in the financing landscape for small and mid-sized builders.

The next five years could see a rebalancing,” he says. “Private capital—especially institutionalized private lenders with track records — will take a larger share of the residential AD&C market.”

It’s a dynamic born out of necessity, but one that offers upside. While bank credit is constrained and unpredictable, firms like Sound Capital can tailor products to builder needs, ranging from spec construction and presale funding to land acquisition and horizontal development.

And the shift is already visible on the ground. According to NAHB, the volume of residential construction loans outstanding today is 56% lower than the 2008 peak — yet housing demand remains structurally underbuilt.

In that gap, private capital has stepped in.

Future-Forward Lending: Builders, Not Bureaucracy

As the housing industry faces ongoing affordability constraints, supply bottlenecks, and demand-side uncertainty, access to funding—not just the price of it—may determine who survives and who scales.

Kenyon and Elwood both emphasize that their strategy isn’t about taking risk for its own sake, but about aligning with strong operators who understand their markets and can execute reliably.

We ask ourselves: is this a builder who knows what they’re doing?” says Elwood. “If yes, then our job is to be there with the capital so they can move quickly.”

Sound Capital’s growing national footprint — including recent relationships with builders in the Carolinas, Texas, and the Midwest—reflects this strategy.

Our builders are our partners. If we help them grow, we grow too,” says Kenyon.

Looking Ahead: Opportunity in the Gap

With a potential Fed rate cut expected by year-end and demand for new homes still outpacing supply in many markets, builders with funding flexibility are well positioned for the next cycle.

But as Rebel Cole warns, credit access may not recover with rate cuts alone.

What builders need is not just cheaper money—it’s available money. And for now, that’s coming from private lenders.”

For builders strategizing growth, recapitalization, or land pipeline expansion in 2026 and beyond, the choice of lender may be just as important as the cost of capital.

We think like builders because we come from that world,” says Kenyon. “That’s why we’re not afraid to put our money to work in this market.”

A severe groundwater shortage has thrown a wrench into Arizona’s growth machine, putting half a million new homes in construction limbo at a time the state is grappling with a housing deficit.

Centered on the fast-growing suburbs of the Phoenix metropolitan area, the crisis pits the state’s future development against the stubborn limits of its groundwater supply.

While other parched western states like Colorado, Utah, and Nevada also face water shortages, Arizona stands alone in imposing a statewide moratorium on new housing subdivisions.

This move prompted homebuilders to sue the state this year.

In a significant breakthrough, however, Governor Katie Hobbs announced a new path forward in early October that could unlock tens of thousands of homes and serve as a model for future development.

Utility company EPCOR became the first in 25 years to receive a new 100-year Alternative Designation of Assured Water Supply under a framework designed to balance growth with conservation.

This ADAWS Designation is going to save water, it is going to support sustainable economic growth, and it is going to create more housing," Hobbs said in the announcement. "Today, we are again demonstrating that Arizona can, and will, continue to grow our economy while protecting our water."

The designation will provide enough water for an estimated 60,000 new homes in the West Valley, including Buckeye, one of the areas hit hardest by the moratorium.

EPCOR achieved this by demonstrating it has a diverse portfolio of water sources, including Colorado River water and recycled wastewater, that does not depend solely on the region’s depleted aquifers.

Only a Part of a Solution

The EPCOR deal represents one piece of a much larger and more complex puzzle.

The 2023 construction pause left nearly 500,000 homes in limbo — roughly 300,000 lots where developers were seeking water confirmation, and another 162,000 potential homes on state-owned land. This sudden halt to construction intensified an already acute housing shortage.

Arizona, once a bastion of affordability, has seen its cost of living rise above the national average, according to a 2025 report from Arizona State University’s Morrison Institute for Public Policy.

While new home construction hit a record high in 2023, housing costs outpaced earnings, leading to a 22% decline in home purchases compared with the prior year.

These issues are undeniably the issues that are shaping our state's economic trajectory and defining quality of life for all of our residents," said Andrea Whitsett, the institute's executive director, in announcing the report.

Why the Moratorium

The decision was based on state modeling that concluded that without intervention, projected groundwater demand in the Phoenix area would outstrip supply by nearly 4.9 million acre-feet over the next century.

This action is rooted in Arizona’s pioneering 1980 Groundwater Management Act, which requires developers to prove they have an assured 100-year water supply before building—a threshold the state determined could no longer be met in many areas.

Builders and Lawmakers Sue

The moratorium sparked a fierce political and legal battle. Earlier this year, the Home Builders Association of Central Arizona sued the Hobbs administration, arguing the ADWR overstepped its authority and created an illegal ban on construction.

The Goldwater Institute also sued on behalf of the association.

It's stopped new home construction in some of the fastest growing and most affordable areas of Maricopa County," Jon Riches, an attorney for the Goldwater Institute, argued in a September court hearing.

In a March 2025 press release, Arizona House Speaker Ben Toma characterized the ADWR as a "rogue agency" and the water requirements as an "illegal tax."

State officials have defended their actions as necessary for responsible planning.

We're in an era of limits," ADWR Director Tom Buschatzke reportedly said at a January meeting in Buckeye.

Buschatzke has argued that the state cannot simply "rubber-stamp new developments" without considering the impact on existing residents' water supplies.

The new ADAWS program represents a middle ground. ADWR Director Buschatzke said it is the "culmination of a challenging public stakeholder process that kept protection of Arizona’s groundwater supplies as a top priority." He commended stakeholders for being "intensely engaged and determined to find that next adaptation of water policy that allows incremental, sustainable growth."

EPCOR Senior Vice President Sean Bradford emphasized the program’s accountability.

Becoming designated truly creates total accountability for the replenishment of our water portfolio, leaving us close to a net neutral impact on Arizona's groundwater resources," Bradford said in the announcement.

While the EPCOR deal is a significant step, it applies to only a fraction of the homes still stalled. The broader crisis has forced a difficult conversation about the state’s future, questioning the sustainability of its decades-long pattern of sprawling growth.

Urban planners suggest the moratorium could be an opportunity to encourage denser, more water-efficient development within existing city limits, preserving the surrounding desert habitat.

For now, though, developers and policymakers are grappling with how to provide affordable homes in a state where water, not land, has become the ultimate constraint.

When HistoryMaker Homes Chief Digital Officer Ty Brewer stepped into his role, he faced a challenge that would feel familiar to many of his peers: an ambitious, growing homebuilder was doing everything it could to remain responsive, agile, and scalable—but its systems, tools, and operational data weren’t working together to support that mission.

If there is a problem, we’re able to diagnose and develop a fix - sometimes in a matter of minutes. With our old system, it could take a week before we could figure out even where the problem was originating,” Brewer says, summarizing the inflection point his team has reached in an ongoing transformation with Constellation HomeBuilder Systems as its platform partner. “There's a lot of energy on the team around things we can do today that we couldn't do in the past. They're excited about the opportunity to use a system that finally allows them to do the things they wanted to do.”

It didn’t start that way. Like many builders that expanded quickly across regions and cycles, HistoryMaker’s internal functions had matured unevenly. Teams were committed, processes were sound, but systems lagged behind. Brewer joined to lead a transformation — but one that would prioritize people and culture, not just software adoption.

Implementing an ERP is always hard,” Brewer says. “Even if you have the best intentions, the best talent, the best ability, and the best market, you can still run into things that buzzsaw the project, because ERPs are just plain hard to do. Never underestimate how challenging an ERP is from the people, the processes, the culture, the technology. It is the hardest thing there is to do.”

From Silos to Shared Truth

Starting the moment he joined HistoryMaker in 2019, Brewer’s mandate was deceptively simple: "land the plane" on an ERP implementation that had faltered. What he inherited, however, was a tangled system—one where immature business processes had been overly integrated into the ERP itself, making change nearly impossible.

The goal was not to chase the shiniest tech or bolt on new tools, but to build a core foundation where every department could see the same data, speak the same language, and act with aligned purpose.

The shift didn’t happen overnight.

The only thing worse than a process that's not automated is a bad process that's fully automated," Brewer recalls. "We had a lot of immature processes that were maybe not even a good fit for the business, but they created and implemented the ERP to tightly enforce these business processes."

From day one, Brewer’s objective was to decouple inflexible processes from the technology meant to support them. As he dug in, it became clear the software wasn't enabling the business to evolve—it was enforcing outdated decisions.

Someone would say, 'we need the system to do that,' and I would ask, 'then why did we configure it so that it can't be done?'" Brewer said. The answer often came back: "We thought we'd never change our mind."

This realization—that business strategy and systems need to be agile together—set Brewer on a path to rewire HistoryMaker’s operational foundation. His vision was about more than just new technology; it was about selecting the right kind of technology partner.

There are different types of software companies," Brewer explained. "True software developers, holding companies that just extract revenue, and customer-centric firms striving for intimacy."

With Constellation, he saw a partner willing to invest and adapt—not just maintain.

At Constellation’s Build Smarter conference, Brewer was introduced to NEWSTAR™ and the then-emerging NX™ platform. What he saw impressed him—not because NX was ready to launch at the time, but because Constellation demonstrated a roadmap toward innovation and openness. Brewer asked Constellation and another new technology software player to commit to working together with him before he signed with either.

"They both said yes, and they’ve demonstrated that commitment. That’s been a real pleasant surprise. Our teams now operate with shared truth, not siloed assumptions,” Brewer says. “We’ve aligned our systems to reflect how we actually build homes.”

Constellation’s open-architecture approach aligned with Brewer’s vision for a connected digital ecosystem. The transformation wasn’t just about ERP. HistoryMaker rolled out NEWSTAR in phases, linked it to Salesforce via Constellation’s SalesXpress, integrated BuilderMetrix with Power BI for real-time insights, stood up a new CAD system that syncs design with production, and created a unified data warehouse dubbed "Grand Central."

The result is real-time visibility, from sales to construction, across both legacy and new systems.

In the past, we wouldn’t have been able to pivot as quickly as we have now," Brewer said. "That’s exactly what I wanted to enable—the ability to rapidly pivot as the business makes changes, for the software to be an enabler rather than a limiter."

Over 50% of HistoryMaker’s communities now operate on the new platform. The feedback from the field has been unanimous:

We’re receiving the benefits that were promised," Brewer says.

That’s the essence of moving from silos to shared truth—not just syncing data, but syncing purpose, agility, and performance across the enterprise.

A Mindset Shift—And Muscle Memory

Perhaps the most important element of the digital shift wasn’t technology at all. It was the ability for people at every level — back office, field teams, executives — to move from reactive fire-fighting to proactive decision-making.

The value of technology is, and always has been, that you should be able to demonstrate a positive return on the investment, and that return can come in the shape of improved processes,” says Brewer. “It can be allowing you to do something that you previously couldn't do. And I think that taking that attitude, if we have this technology or solution in place, what could we do?”

Cross-functional visibility means that decisions once made in silos—like estimating, scheduling, or job cost approvals—now happen in concert. That reduces friction, compresses cycle time, and strengthens accountability.

Brewer is quick to emphasize that this isn’t just about efficiency—it’s about people.

“This is how we make good people even better.”

Engineering for the Real World

One lesson Brewer underscores is that technology should mirror how builders actually build homes — not the other way around.

We've been really happy with the level of expertise Constellation has on building integrations with our systems, such as our data warehouse, reporting system, as well as other third-party applications in the front end of our processes,” he says.

That means digital tools must support real-world use cases: trade partner coordination, option selections, inspection timing, and milestone accuracy.

Too often, builders face a trade-off: adopt a tech platform that looks great in a demo, but breaks down when mapped to a builder’s real process.

The way that the system is built either makes it easy or difficult to get to the data the people in purchasing to understand exactly what dollars go where and it happens to be,” Brewer emphasizes. “With NEWSTAR, once our analysts and once our purchasing agents saw the way the data was organized, they had insights that were literally there the entire time in the old system, we just couldn't get to them.”

The payoff? Not just fewer errors or reduced costs—though those are material—but also higher confidence among team members at every step of the build process.

We took our learnings along the way. And what that did was it gave us confidence to go faster when we thought there was an opportunity to go faster. That helped us avoid building things that no one was going to use or value,” Brewer says.

Operating with Intention and Integrity

HistoryMaker’s transformation underscores a key truth about digital strategy: tools don’t create culture—but they can amplify it. The more aligned, secure, and transparent your systems are, the more empowered your people become.

For Brewer and his team, that means modernization that respects the past, leverages institutional knowledge, and brings clarity to complexity.

The success to date has been because the technology solution was built hand in glove with understanding what the business wanted to do, the strategy we were undertaking, the place where we saw ourselves in the market, and the opportunities we wanted to take advantage of,” Brewer notes. “I really feel like this technology stack is going to allow us to do that, rather than hold us back,” Brewer reiterates.

It’s a lesson many builders — especially those navigating today’s capital-constrained and margin-pressured environment — are starting to internalize. Leadership is no longer just about picking the right land or spec — it’s about giving your team the right tools to win, together.

The growing power of a new class of homebuilding company acquirers played out earlier this month, as El Paso, TX-based investment platform Hunt Companies completed a quiet acquisition of Denver-based View Homes. This five-state operator builds under regional brand names such as Aspen View Homes, Desert View Homes, and Horizon View Homes.

The deal, finalized in early October, exemplifies an accelerating pattern in homebuilding M&A: operator-led homebuilding firms — squeezed by high borrowing costs and tightening credit markets — finding stability, scale opportunity, and strategic runway through alliances with deep-pocketed capital allocators.

This pairing, confirmed by The Builder’s Daily, brings together:

• Hunt Companies, a privately held platform, founded in 1947, with wide-ranging real estate, infrastructure, and investment holdings — and a legacy of long-term ownership, master-planned community development, and growing interest in single-family residential verticals.
• View Homes, a regional homebuilder operating in Texas, Iowa, Colorado, New Mexico, and South Dakota, with a diversified portfolio of brands and a reputation for building healthy, smart homes at accessible price points.

While the terms of the deal were not disclosed, the structure appears consistent with recent M&A deals in which an operational builder seeks long-term capital stability and growth leverage, and the acquiring partner sees strategic alignment with its broader real estate holdings or community development platforms.

A Convergence of Needs — and Opportunity

This Hunt–View Homes pairing reflects a broader confluence of motivations in the current M&A cycle.

On one side: private builders navigating a cost- and capital-constrained environment where access to acquisition, development, and construction (AD&C) funding has tightened significantly, even as demand for new homes — particularly in the attainable-price tier — continues to outpace supply.

On the other hand, institutional asset managers, principal investment platforms, and strategic long-horizon capital players seek exposure to residential real estate’s long-term secular demand thesis, without the friction of ground-up operational execution.

In such partnerships, builders gain patient capital and financial structuring expertise, while investors gain exposure to local land pipelines, field-tested operating systems, and customer relationships in high-growth regions.

View Homes: A Builder Built for Scale

With a multistate footprint and recognizable brands tailored to local markets, View Homes has operated for over 30 years, focusing on entry-level and first-move-up homes and delivering products that prioritize affordability, durability, and energy performance.

The company has grown through a mix of organic land acquisition and franchise-style brand partnerships, positioning it well for scalable expansion under a capital-rich partner like Hunt.

Its family of brands — Desert View Homes (Texas, New Mexico), Aspen View Homes (Colorado), and Horizon View Homes (South Dakota, Iowa) — all maintain distinct regional "franchise-level" operations but share a playbook focused on margin discipline, local trade relationships, and delivering value to buyers in the face of affordability headwinds.

Hunt Companies: Deep Roots, Long Vision

Hunt Companies has operated at the intersection of public-private investment, real estate development, and infrastructure for nearly eight decades.

Its diversified holdings span:

• Master-planned community development across thousands of acres in Texas and Hawai‘i (Hunt Communities)
• Single-family build-for-rent (BFR) communities under its dedicated division, Avanta Residential, which is active in Texas, Florida, Georgia, and Colorado
• Low-income housing tax credit syndication, investment banking, public infrastructure services, and military housing — making Hunt one of the most integrated real estate investment platforms in the country

The acquisition of View Homes introduces a new strategic lever: in-house vertical construction capabilities for single-family homes. This could allow Hunt to:

• Align vertical development with its master-planned community holdings, enhancing control over quality, timelines, and margins
• Deploy its own design and construction operations across its BFR communities, potentially improving returns and delivering products tailored to renter preferences
• Bolster View Homes' local market presence and operations with the financial scale and risk tolerance of a diversified real estate investor

Avanta Residential’s presence in Texas, Colorado, Florida, and Georgia also overlaps with View Homes’ existing or adjacent operational footprint, suggesting a potential convergence in site strategy, permitting, and product planning across both for-sale and for-rent channels.

In that light, the View Homes acquisition may not just be about geographic expansion or homebuilder investment. It may be a keystone in Hunt’s broader plan to vertically align its development, construction, and rental housing platforms — unlocking operational flywheel opportunities that deliver competitive advantage in today’s high-cost, high-risk environment.

Capital Flows Reshape the Builder Landscape

Though the Hunt–View Homes deal was unannounced at the time of closing, its significance looms large in an environment where:

• M&A activity remains elevated — driven by private builder margin compression and tighter bank lending
• Buyer demand is cautious at best and paralyzed at worst, constrained by affordability, rates, and macro uncertainty
• Capital is concentrating in fewer hands, with national publics, global acquirers, and private equity-backed platforms taking share

This pattern — operator sellers aligning with capital-backers for stability, scale, and longevity — is evident in multiple recent transactions. In nearly every case, these acquisitions underscore that executional capability plus local land access are highly valued assets, even when overall market momentum is muted.

Capital Looking for Builders

While many homebuilding acquisitions of the past focused on overhead cost-cutting opportunities among operators, this rising subset of M&A deals differs. Instead of builder acquiring builder, it's often capital acquiring capability.

• Long-horizon investors are seeking resilient, execution-focused builders with solid land pipelines and deep local knowledge.
• For builder sellers, strategic capital partners offer breathing room in a market where debt is expensive, entitled land is scarce, and labor is both tight and costly.
• These deals suggest that the M&A logic of 2024 and 2025 is no longer just about market share — it’s about financial infrastructure, forward momentum, and durability.

What Comes Next

As rates remain volatile and financing constraints linger, the pressure on mid-sized and even larger private builders will persist. In that climate:

• Expect more M&A pairings that blend operational execution with financial engineering.
• Anticipate capital platforms with exposure to SFR, build-to-rent, and master-planned communities to seek builder-partners for vertical integration.
• And don’t be surprised to see foreign institutional capital continue its quiet march into U.S. homebuilding via similar transactions.

For Hunt and View Homes, the next phase will likely focus on growth — with View gaining the firepower to double down on existing markets, and Hunt integrating the operation into its broader residential vision.

For other private builders watching closely, the message may be clear: if you’re not planning for capital now, capital may start planning for you.

In an industry where change often takes a slow, uncharted road, Dave Rice has consistently been ahead of the curve. As the founder and driving force behind New Home Star's evolution from a sales enablement startup to a nationally recognized performance partner, Rice has helped elevate the role of the sales associate beyond the model home and into the strategic war rooms of America’s top homebuilders.

This week, as New Home Star takes its place as the Elite Partner of the Focus On Excellence Summit and Workshop in Denver, it’s worth pausing to recognize how Rice's philosophy and discipline have shaped a generation of sales professionals and influenced the entire operating system of homebuilding firms.

From Order-Takers to Business Operators

Rice's central belief is deceptively simple: sales associates should operate like business owners. They must know their customers, anticipate their needs, and deliver value not only to buyers but also back to the organization.

Suppose you’re serious about moving the sales function from a cost center to a revenue multiplier. In that case, you have to give your team real tools, real accountability, and real insight,” Rice tells us in our interview.

His approach doesn’t treat sales as a department. It positions it as a strategic axis.

Bridging the Field and the Back Office

One of Rice's most significant insights is that a sales representative can be a powerful feedback loop for the rest of the business — if equipped and empowered to do so. Through centralized tools, continuous education, and operational scorecards, New Home Star field teams bring back real-time data on pricing resistance, buyer preferences, and community perception.

We expect our people to be listening posts, data gatherers, and business developers all in one," Rice said. "We tell them: your job is not just to sell homes. It’s to help the builder get better."

That means sales feedback becomes valuable intel for land teams, design departments, and operational leadership.

A Platform for Performance

The heart of the New Home Star system is its proprietary tech platform. It blends CRM, market intelligence, incentive tracking, and performance coaching into a single digital workspace that sales associates use every day. It’s not an add-on; it’s the job.

Rice says,

We believe the best salespeople are students of the business. Our tech stack isn't there to monitor people – it's there to make excellence more reachable."

The platform reinforces transparency, celebrates wins, and flags underperformance early enough for course correction. It also gives builder partners unprecedented visibility into their sales operations.

Elevating the Profession

At the heart of Rice's mission is a passion for redefining what it means to be a new home sales professional.

We're not hiring hosts. We're hiring business athletes," he says.

That mindset has helped New Home Star gain traction with some of the nation's most sophisticated builders, who increasingly view sales as a core capability rather than a downstream activity.

New Home Star's coaching model includes intensive onboarding, performance mapping, daily huddles, and feedback loops. Its culture blends competitive fire with collaborative learning, encouraging every associate to "own their book of business."

Lessons for Builder Leadership

So what should senior builder leaders take away from New Home Star’s approach?

First, that sales is not a silo. It is a sensing mechanism, a strategy lever, and a differentiator – especially in tough markets.

Second, that investing in tools and training for the sales force isn’t overhead. It’s proactive weaponry. Builders can no longer afford sales reps who merely read price sheets and unlock doors.

And third, that accountability plus autonomy equals performance.

When people have data, goals, and support, they rise,” Rice said. “But you can’t fake investment. You have to be in it with them.”

Looking Ahead

Rice and his team see the next frontier as even deeper integration into builder operations. Already, their field teams are informing pricing decisions, product adjustments, and land strategies.

As the housing market becomes more volatile and as buyers become more cautious, the need for disciplined, data-driven, strategically empowered sales professionals will only increase.

New Home Star’s leadership in this domain is not just a model for sales teams. It’s a provocation for an entire industry.

Hyper Focus

In teaming with New Home Star as the Elite Partner of this year’s Focus On Excellence event, The Builder’s Daily recognizes the company’s consistent impact on operational excellence, cultural leadership, and measurable performance improvement.

But it also reflects something deeper: a belief that excellence isn’t reserved for the boardroom.

It begins at the front lines. And in Dave Rice’s world, those lines are staffed with business athletes ready to win.

With public builders increasingly splitting into two strategic camps — those pushing pace at any cost, and those holding the line on price to preserve long-term value — Century Communities’ Q3 2025 performance shows a third viable strategic and operational pathway: apply discipline in pricing and incentive use, defend margins with cost control and operational excellence, and keep customer experience at the center.

It’s not the boldest, nor the loudest strategy on the block. However, it’s working. The reason? High performance.

We continue to see strength in the housing market and a very resilient consumer,” said Executive Chairman Dale Francescon. “The success of our strategy is evident in our third quarter results and our strong year-to-date performance.”

That strategy hinges on one of the most crucial levers in today’s market: controlled affordability, made possible by owning and operating a vertically disciplined machine built to navigate turbulence — not just ride the upside.

Pricing for Pace — Without Losing the Plot

Like PulteGroup and Taylor Morrison, Century Communities took a measured approach to incentives in Q3. Unlike Lennar or D.R. Horton, Century did not flood its markets with discounted specs to chase volume. Instead, the company leaned on market-level pricing adjustments and limited, targeted incentives to sustain absorption.

We continue to actively manage our pricing and incentives to drive absorption and maintain profitability,” said CEO Robert Francescon. “Cycle times have continued to improve, and we are seeing increased efficiencies across our operations.”

In other words: match the buyer where they are, but don’t overreact.

By contrast, Lennar leaned into 14.3% average incentives, and even Pulte edged toward 9%, mainly on spec inventory and design center upgrades. Century doesn’t disclose incentive mix, but leadership language suggested a disciplined regional approach, similar to Tri Pointe’s selective incentive strategy and Taylor Morrison’s “dual-track” flexing.

We believe that affordability remains the key to homeownership, and we continue to focus on delivering homes that meet the needs of our buyers,” said Dale Francescon.

Operational Discipline: The Unsung Margin Hero

While Century’s gross margin of 21.5% came in below last year’s 25.1%, the number beat internal expectations — in large part due to cost discipline and efficiency gains across field operations.

Our home sales revenues for the third quarter increased 14% to $1.1 billion,” said CFO John Dixon. “We remain focused on operational efficiencies and margin performance, while continuing to invest in future growth.”

That balance — managing costs while preserving build quality and customer experience — is increasingly the separating line between builders who are holding margin and those watching it slip away.

Where KB Home is focusing on longer-cycle build-to-order operations (with better margins but slower absorption), and Lennar is compressing gross profit to sustain sales flow, Century sits closer to the Pulte model: a balanced approach grounded in execution, optionality, and long-term positioning.

The Century team continues to execute at a high level and deliver value across the business,” said Dale Francescon.

Owned & Controlled Lots as Strategic Fuel

Century Communities continues to outperform some peers on land optionality. With 70,000 owned or controlled lots in hand, the builder has freedom to maneuver — whether that's slowing starts, holding pricing, or pivoting into stronger submarkets without overcommitting to expensive land.

We are leveraging our owned and controlled lot position to support consistent deliveries across our markets,” said Robert Francescon.

While Taylor Morrison has shifted toward an asset-light structure, and Pulte has trimmed land spend to maintain optionality, Century's strategy looks more like D.R. Horton’s in structure — but more like Pulte's in execution. It’s a nuanced position: secure enough to act, but not overexposed in uncertain times.

We are confident in our positioning and our ability to capitalize on future opportunities,” added Dale Francescon.

Customer-Centric Execution: The Quiet Differentiator

One of the underreported stories in Century’s Q3 call — and a key factor separating top performers from the rest — is customer experience and team performance.

Customer satisfaction scores are up, cycle times are down, and cancellations are within historical ranges — that tells us our operational teams are performing,” said John Dixon.

That may seem like a throwaway line, but it echoes a sentiment that has defined Pulte’s and Tri Pointe’s success this year: internal capability culture is a strategic advantage. When cycle times stabilize, when field teams execute, and when the brand promise holds in every ZIP code — that’s when buyers trust, transact, and refer.

Lennar is fast, and D.R. Horton is big. But Century’s calling card — and competitive differentiator — may be its operational durability and people-powered performance.

The Century team continues to execute at a high level,” Dale Francescon reiterated.

Financial Flexibility, Focused Growth

Century Communities’ Q3 also underscored another strategic pillar: strong liquidity and conservative balance sheet management. With $549 million in liquidity, including $256 million in cash and $293 million under the revolver, the company is well-positioned to seize land opportunities or invest in new product offerings without overleveraging.

We remain focused on growing our business in a disciplined manner, while also returning capital to our shareholders,” said Dale Francescon.

Compare this to the cautionary notes from KB Home — which is retrenching to protect margin — or Tri Pointe, which is throttling back starts to work through under-absorbed specs. Century’s approach is steady: build in the right locations, price for the customer, and expand incrementally with eyes on the macro environment.

Outlook: Positioned for What Comes Next

The biggest takeaway from Century’s Q3 earnings call?

It’s not a builder chasing headlines or yield curves. It’s a company doubling down on a business model that works across cycles — one built on cost control, local-market presence, customer-first execution, and strategic lot control.

We are confident in our positioning and our ability to capitalize on future opportunities,” said Dale Francescon.

As Lennar signals slower sales, KB leans harder into BTO, and Taylor Morrison runs a hybrid pace/profit play, Century has emerged with a clear, consistent, and credible playbook for 2026.

It’s not price over pace. It’s not margin at all costs. It’s balance — with people, with process, and with purpose.

Tri Pointe Home’s Q3 earnings call reflected a disciplined builder that is sticking to its guns and prioritizing price over pace, as it sacrifices near-term sales in favor of its long-term growth.

While Lennar stays true to its even-flow machine and D.R. Horton emphasizes scale, Tri Pointe has decided to ease back — for now — as it works to sell through its existing inventory without compromising on pricing. 

During the call, CEO Douglas Bauer said that Tri Pointe is working through a near-term sales slowdown, as low consumer confidence negates the positive impact of moderating mortgage interest rates. However, Bauer anticipates an uptick in buyer demand at the end of next year, heading into 2027. 

Here’s the short-term strategy to address this reality, in a nutshell:

In the short-term, we are prioritizing inventory management, disciplined cost control, and the sale of move-in-ready homes while steadily increasing the mix of to-be-built homes over time,” Bauer said. 

Scaling Down New Home Starts

Tri Pointe anticipates growing its community count by 10 to 15% by the end of 2026, but this growth trajectory only tells part of the story. The builder scaled back on new home starts in Q3 and anticipates maintaining this lower start pace once again in Q4, as it works through its existing and under-construction inventory. 

The approach makes sense in the current environment, given elevated inventory levels and a seasonally slower period,” Wolfe Research director of equity research Trevor Allinson wrote. 

Demand is softer, revenues are declining, margins are tighter, and new homes are sitting on the market for longer. A reduction in new home starts is a discerning response to this reality. 

However, there is hope on the horizon. 

Home buyer interest remains somewhat muted with lower confidence driven by slow job growth and broader economic uncertainty. However, we continue to see underlying demand for homeownership among needs-based buyers. We anticipate that home shoppers are preparing to reengage when conditions stabilize, leading to more normalized absorptions,” Bauer noted. 

Tri Pointe’s emphasis on attracting the builder's prototypical buyers seeking a higher-end, conveniently located product also gives Bauer confidence. 

Executives believe that their established, move-up customers, with an average household income of $220,000, are well-positioned to reengage with the market in the not-too-distant future. 

This segment has demonstrated resilience even amid shifting market conditions, supported by strong income profiles, down credit, and larger down payments.”

Prioritizing Price Over Pace

Bauer was clear that Tri Pointe doesn’t plan to retreat on price to spur sales momentum as it heads into the new year. The builder pays a premium for what Bauer referred to as “main and main, great locations”, and is determined to maintain its value proposition and hold the line on pricing. 

We’re more of a premium brand proposition, so we look at our value proposition as it enters the market,” Bauer explained. “We'll price the product appropriately to the marketplace to have the right value proposition that we propose.”

Easing back on starts will allow Tri Pointe to work through its existing and under-construction inventory while maintaining its target pricing. 

This discipline partially explains why the builder’s quarterly incentives measured 8.2% of quarterly sales. While a slight uptick from Q2, it narrowly beats out Pulte’s 8.7% and is much lower than Lennar’s 14.3% incentive rate. 

Just like Pulte, Tri Pointe’s incentives are roughly one-third financial and two-thirds spent on design studio upgrades. The builder’s more established move-up buyers don’t require the same level of financial assistance that entry-level buyers need. 

Most of our customers really don't need to have a significantly lower interest rate to qualify for the home, so they prefer to use more of their incentive dollars on design studio personalization,” said Linda Mamet, Executive VP and Chief Marketing Officer. 

Moving to a More Balanced Approach 

Tri Pointe’s home orders continue to decline, which is partially responsible for a glut of spec homes on the market — an imbalance that is forcing the builder to be more generous with incentives and conceding more on margins than it would like to. 

This is an imbalance that should work itself out in the short term. 

We've got about three-fourths of our orders running at specs into the end of the year. All the builders have a little bit more inventory than what they anticipated. So we'll burn through that inventory going into the first quarter or so of next year and then get to a more balanced approach,” Bauer explained. 

Primed for Future Growth and Optimizing Operational Efficiency 

Tri Pointe’s decision to reduce new home starts is also rooted in declining backlog, which will likely persist during Q4. Wolfe Research anticipates backlog to be down more than 40% YOY as the year comes to a close, but also forecasts that the company’s orders will begin growing again during Q1 of 2026. 

Tri Pointe’s SG&A expenses increased annually from 10.8% to 12.9% during Q3, but Allison predicts some positive movement on this front next year. 

With the majority of the fixed G&A for the new communities in place, we expect nice SG&A leverage on the closings once they occur,” he wrote. 

With orders expected to pick up in 2026 and Tri Pointe’s prediction that its buyers will come off the sidelines later in the year and into 2027, the builder is preparing now for future growth. The company strengthened its liquidity and also owns or controls 32,000 lots, as it readies itself to respond to future changes in demand. 

Tri Pointe also anticipates that growth in its new markets will have a measurable impact on the business soon. The builder expanded into Utah in 2023 and delivered its first two communities in the state this past quarter. Expansion into the Central Florida and the Coastal Carolinas markets followed last year. All three are growing markets that Bauer expects to “generate meaningful growth" for Tri Pointe in 2027 and beyond.

Tri Pointe is Pacing, Not Racing, to the New Year

For Tri Pointe Homes, the phrase “price over pace” about sums up its positioning for navigating carefully in the present and preparing for a more explosive mid-term future. Instead of pushing inventory and reducing prices to build momentum, the builder is focusing on quality over quantity as it works through its current and under-construction inventory amid declining sales and orders. 

Tri Pointe’s disciplined approach to pricing and inventory management offers a roadmap for holding the line on prices even amid a challenging market with rising incentives and lower homebuyer demand. The builder is adapting — while staying true to its core principles. 

When it comes to jockeying for position among America's biggest homebuilders, PulteGroup plays its hand differently — and deliberately.

While D.R. Horton continues to dominate on scale and starts, and Lennar calibrates for a new equilibrium of land-light leverage and factory-like production consistency, Pulte leans into predictability, margin resilience, and operational discipline. That strategy may not make it the loudest on volume or the flashiest on innovation. Still, it gives the Atlanta-based builder a distinctive edge: consistency in a business full of sudden turns.

Q3 2025 was no exception.

PulteGroup posted strong quarterly earnings on Oct. 22, with profitability metrics and an improved backlog pointing to stability going into year-end. While net new orders grew modestly, and margins ticked down slightly, Pulte’s measured approach to spec vs. build-to-order, disciplined land strategy, and customer profile allowed it to avoid many of the turbulence traps that have plagued others.

Here's how Pulte performed and what it signals about its place in the increasingly bifurcated field of large public builders.

PulteGroup’s Q3 earnings reflect a challenging homebuilding market, as declining consumer confidence negates the impact of a more positive mortgage rate environment, thus requiring homebuilders to employ more incentives to get homebuyers across the finish line. 

Pulte’s incentives as a percentage of overall sales increased last quarter, as revenues, closings, gross margins, and net new orders declined, but the earnings call reflected a more conservative approach when compared to a key competitor. 

Cautiously Employing More Incentives

Pulte’s incentives inched up from 8.7% in Q2 to 8.9% last quarter. However, that is significantly lower than Lennar’s reported incentives of 14.3%, which had increased from approximately 13% in the previous quarter. 

CEO Ryan Marshall outlined Pulte’s incentives strategy on the earnings call:

You have heard me say before that we can't be margin proud. So when operating in more difficult market conditions, our local teams understand the importance of finding the market and turning assets while not giving away price needlessly. That is the approach we continue to take as we compete for sales and work to sell through finished inventory.”

Jim Ossowski, Executive Vice President and CFO, explained that about a third of incentives were financial, while the rest are “cost-of-goods” incentives.

If we want to give you some money off in a design center, maybe if you have a finished spec inventory, you get a little bit of a discount on that. That's about two-thirds of the mix,” Ossowski explained. 

Stephen Kim, Senior Managing Director at Evercore ISI, was pleased with this strategy. 

That's great. That's not a lot, so that's encouraging that not a lot are financial,” Kim responded. 

Marshall and Ossowski both noted that the level of incentives varied across regions. While the Midwest, Northeast, and Southeast were regions of strength, markets in Texas and the West were challenging and required more homebuilder incentives. 

55+ Buyers Help Offset Pulte’s Declining Margins

The company’s strong performance among its 55+ active adult Del Webb communities helped Pulte outperform its Big 3 competitors among a key metric — gross profit margin. Pulte’s gross margin, at 26.2%, was down from 28.8% year-over-year, but also beat out the competition, compared to D.R. Horton’s 21.8% and Lennar’s 17.5%.

Pulte’s age-restricted Del Webb communities offer residents resort-style amenities, and also carry margins 400 basis points higher than entry-level Centex products and 200 basis points higher than move-up products, Marshall said during the Q2 earnings call. 

Pulte Works to Diversify its Product Mix

Del Webb accounted for 24% of Pulte’s business and increased 7% quarterly, even as overall closings were down 3%, Marshall reported. 

Other than Del Webb, Pulte’s remaining sales come from first-time buyers, down 14%, and move-up buyers, down 3%. Move-up and first-time buyers accounted for 38% each, a mix that was intentional; several years ago, move-up buyers accounted for about 45%. 

Marshall explained that his team intentionally brought down the move-up business to a “range of 35% to 38% ideally”, while first-time buyers will equate about 38% to 40% and Del Webb will account for about a quarter of the business going forward. 

According to Marshall, diversifying the product mix will strengthen the company as market dynamics change and demand drivers shift.

I think it's fair to say that home buying demand in 2025 has been more challenging than the industry was anticipating. And while it has been more challenging, I think PulteGroup's year-to-date results continue to demonstrate the importance of our diversified and balanced approach to the business.” 

Pulte also plans to leverage Del Webb’s strong margins with its new Del Webb Explore brand, which the company announced this year. While it's too early to predict margins, Pulte has high hopes for the brand, which will be marketed primarily to established yet younger buyers.

Our new Del Webb Explore brand is designed to serve today's Gen X buyers looking for the amazing luxury lifestyle but without the age restriction,” Marshall explained.

Optimizing Efficiency and Planning for Future Growth 

Marshall noted that Pulte reduced its average build time while maintaining costs at $79 per square foot, unchanged from a year ago. The company also responded to declining homebuyer demand by decreasing land spending by 5% annually.

With our average build cycle now down to just 106 days, we can carry less inventory and still be responsive to any demand acceleration in Q4 or as we enter 2026,” Ossowski explained. “We remain in a strong position with a healthy land pipeline that can enable us to grow the business when home buying demand increases.”

During Q3, the builder also started 6,557 homes, which was a similar pace to the previous quarter. 

This pace is consistent with our strategy to match starts with sales as we work toward an appropriate level of inventory relative to current market demand. When setting our starts pace, our goal is to have the right level of inventory to meet core demand while avoiding excess finished spec production, thus allowing our sales team to sell from a position of strength."

Spec homes are now about 50% of Pulte’s sales, as built-to-order closings are down. However, Pulte plans to drop spec homes to the 40% to 45% range in the near future.

The rate at which we've been starting homes is perfectly aligned with where we want to be in terms of a sales rate. We'll continue to chip away at the finished specs, and as we move into 2026, we'll get that kind of normalized,” Marshall said. 

Looking Ahead to 2026 

Marshall explained that consumer confidence is a key metric to watch heading into 2026. OECD’s consumer confidence index reports that consumer confidence fell 56 basis points annually as of the end of September, enough to offset the positive impacts of falling mortgage rates. As Marshall noted:

What we're kind of looking toward and for is some improvement in the overall footing and foundation of consumer confidence…if we can just get consumers confident about making this major purchase in their life, I think we can see some upside in '26.”

Tariffs are also a potential consideration, Ossowski said. 

At this time, we estimate that tariffs will effectively have little to no impact on our closings in Q4 of 2025, but they could increase build costs by roughly $1,500 per home starting in 2026,” he explained. 

In a quarter where even the strongest builders have been forced to choose between price and pace, Taylor Morrison chose both—carefully.

The company’s third-quarter 2025 results offer a case study in how to navigate a patchwork housing market by leaning on segmentation, not slogans. Rather than swing entirely toward incentives or hunker down solely to defend margin, Taylor Morrison charted a hybrid course: accelerating sales where affordability pressures bite hardest, and guarding value where confidence still closes the sale.

A Market That Demands Two Speeds

Across much of the U.S., new-home demand remains uneven — solid in pockets, uncertain in others, sluggish in yet others. Mortgage-rate volatility, inflation fatigue, and buyer hesitation continue to make forecasting a tightrope act. Public homebuilders, from Lennar to D.R. Horton to PulteGroup, are all adjusting to the same consumer math: affordability is the obstacle, confidence the currency.

Where Horton leans on scale and Lennar on its even-flow machine, Taylor Morrison has leaned into differentiation — by buyer segment, geography, and land strategy. CEO Sheryl Palmer framed the quarter’s performance through this lens of calibration:

Driven by our diversified portfolio and our team's careful calibration of pricing and pace across our well-located communities, we once again met or exceeded our guidance on all key metrics, including home closings volume, price and gross margin.”

That blend of calibration and control — essentially, engineering elasticity where demand exists and patience where it pays — defined the tone of the call.

Hybrid in Practice: One Playbook, Two Markets

Palmer described what she called “a balanced operating strategy” that allows Taylor Morrison to flex to conditions rather than react to them.

The ongoing execution of our balanced operating strategy has allowed us to maintain healthy performance even as we have adjusted pricing and incentives, particularly in entry-level price points,” she told analysts.

The company’s segmentation data shows a near-even split in emphasis: roughly one-third of orders coming from entry-level buyers, half from move-up, and the remainder from resort and 55-plus lifestyle communities. This mix gives the company the flexibility to move where the customer energy is—and to pause where it’s not.

In some communities,” Palmer said, “this results in a price-focused approach to drive volume, especially where we serve predominantly first-time buyers … however, in move-up and resort lifestyle communities, we are inclined to be more patient to protect values given our distinct locations and product offerings in hard-to-replace communities.”

That distinction — pace where the alternative can get costly fast, patience where prudent — is the hinge of the Taylor Morrison playbook.

Segmentation as Risk Management

Taylor Morrison’s approach looks less like an across-the-board pricing or incentives policy and more like a community-by-community field strategy. Each market operates within a defined customer profile and pricing lane.

Given our quality land locations,” Palmer said, “our sales strategies are driven community by community based on their unique selling proposition, competitive analysis and consumer profile.”

It’s a segmentation discipline that’s increasingly becoming a competitive advantage. While others chase one national pace strategy, Taylor Morrison’s “dual-track” model lets it respond to demand curves at different speeds without losing cohesion.

Executives made clear that this is not an abstract idea—it’s a living, operational rhythm.

We're going to continue to do the right thing, community by community, asset by asset,” Palmer said in response to an analyst question. “We really look at the balance of price and pace and consumer group in every community.”

For builders following the company’s model, this local-granular view is as much about managing risk as it is about maximizing return. Pricing and starts are tethered to absorption, not to projections or backlog pressure.

We’re going to align sales pretty close to starts,” Palmer added, emphasizing that permits are ready but “we’re not going to flood the market with inventory.”

Specs as a Bridge, Not a Strategy

If Taylor Morrison’s hybrid play has a physical manifestation, it’s in the spec-to-order mix.

Specs remain the company’s bridge to an affordability-strained buyer base, not a permanent structure.

“Specs will continue to bridge the gap between current buyer preferences for incentivized quick move-in inventory and an eventual return to more historic preferences for personalizing to-be-built homes, especially in our move-up and resort lifestyle communities,” Palmer said.

The ratio is deliberate: entry-level and townhome segments carry higher spec exposure to meet the quick-move buyer, while discretionary and lifestyle buyers are guided toward to-be-built homes where margins and personalization run higher.

Erik Heuser, the company’s chief corporate operations officer, summarized the segmentation logic cleanly:

Entry level is going to be more spec, townhomes are going to be more spec, and then as we move our way up in the consumer segmentation profile, we'll look to pursue more to-be-built business.”

It’s an operational lever that both sustains sales pace and protects brand equity.

The Mortgage as Product

Palmer was clear that affordability innovation goes beyond sticker price. The company’s finance arm is not just supporting transactions—it’s shaping them.

We're using both on the conventional and the FHA loans … buydowns, adjustable loans … and a new proprietary nine-month program for our to-be-built,” she explained. “It really gives our customers flexibility on a forward lock but the security of a longer period of time if they believe rates are going to drop.”

In today’s market, that kind of mortgage creativity functions as a second product line. It lets Taylor Morrison help buyers solve for payment rather than price — an increasingly decisive factor in conversion rates.

Cost, Cycle Time, and Land Discipline

Beneath the sales-strategy conversation, Taylor Morrison’s Q3 tone carried a quieter but equally important theme: discipline on land and cost.

While peers talk about renegotiating with suppliers and trimming stick-and-brick costs, Taylor Morrison focused on controlling what it owns — and increasingly, on what it doesn’t.

We control 60% of our lot supply via options and off-balance-sheet structures … as we have made significant progress in our asset-lighter strategy,” Heuser noted.

That asset-light posture isn’t new, but it’s become more valuable in a market where land sellers have been slow to reset expectations and carrying costs can quickly erode margin.

The company’s leaner land model gives it the agility to adjust to changing conditions without being trapped in overvalued positions.

Internally, operational efficiency continues to improve. Cycle-time reductions and supplier coordination remain priorities, with leadership pointing to shorter construction durations and stronger vendor relationships. The emphasis, as Palmer framed it, is pragmatic: control what you can, flex where you must, and keep the machine running lean.

Contrasts and Context

Placed alongside its largest peers, Taylor Morrison’s Q3 posture highlights how differentiated the national homebuilding landscape has become.

• Lennar remains the volume-first operator, using incentives and even-flow production to drive throughput.
• D.R. Horton wields scale as its shock absorber, converting volume into cost leverage.
• Pulte, the margin purist, tries to remain anchored in confidence-driven buyers and price discipline.

Taylor Morrison sits in between — a portfolio hybrid that can move in both directions depending on the submarket. It has enough reach into the entry-level and townhome space to benefit from demand elasticity, but enough exposure to 55+ and move-up product to maintain profitability when confidence, not price, closes the deal.

That balance makes it one of the few builders able to toggle between “pace mode” and “profit mode” without disjointing its operations.

The Discipline Behind the Dual Track

What makes Taylor Morrison’s hybrid strategy credible is not its segmentation alone, but its rigor. The company’s approach is underwritten by cost discipline, asset-light land management, and operational efficiency—three ingredients that keep flexibility from becoming fragility.

Palmer’s refrain of “balanced operating strategy” recurred throughout the call, culminating in her outlook statement:

We have well over 100 communities expected to open next year, resulting in mid- to high single-digit anticipated outlet growth.”

That growth, while modest, is intentional. It favors steady return on invested capital over headline-grabbing expansion. In that sense, Taylor Morrison’s hybrid navigation is less a tactical adjustment than a cultural one: an organization built for variability, not dependent on any single market outcome.

Takeaway: The Advantage of Optionality

For strategists across the industry, Taylor Morrison’s third-quarter results don’t simply mark another earnings beat—they illustrate the advantage of optionality.
The company’s dual pricing discipline—accelerating in price-sensitive submarkets while defending value among discretionary buyers—offers a roadmap for how to operate when market signals are conflicting and consumer psychology is fragmented.

In an environment where few builders can afford to play offense on both fronts, Taylor Morrison’s segmented, disciplined execution may be the most adaptive model in the field. The builder isn’t betting on one market—it’s preparing for both.