What Builders Are Focusing on Right Now
Our team participated in Zonda’s Builder 100 Conference in beautiful Laguna Niguel, which was well attended by public and private builders, including several first-time builder attendees.
Across panels and conversation, the prevailing view was that despite ongoing geopolitical and macroeconomic headwinds, long-term growth aspirations across the industry remain intact, with many believing the most disciplined and sophisticated operators will be positioned to outperform as market conditions stabilize. Below are several of our key takeaways from the conference:
The market is normalizing. Current conditions are being viewed as a reversion to historical absorption and margin levels rather than a demand downturn. Activity remains steady, though operators are recalibrating expectations following the outsized performance experienced during the COVID era.
Scale matters and remains a strategic priority – especially through M&A. Builders continue to use acquisitions to accelerate market entry, improve purchasing leverage, acquire talent, and secure lot pipelines. Operational readiness and employee retention were highlighted as critical to successful transactions, while Japanese buyers remain active.
Incentives continues to pressure margins. Sales activity persists but with steady dependence on incentives, buydowns, and price adjustments to drive conversion and maintain pace. Affordability constraints are delaying first-time homeownership, increasing average buyer age, and driving greater reliance on family wealth transfer and cash buyers.
Capital remains available for scaled, disciplined operators. Institutional capital continues flowing into housing through land banking, structured capital, and platform investments, with a continued focus on balance sheet strength, operational execution, and demonstrated performance through cycles.
New homes continue to outpace resale inventory. Limited existing home supply, aging housing stock, mortgage rate lock-in effects, and builders’ ability to offer financing incentives continue to support demand for new construction despite an elevated interest rate environment.
