(Disclosure: Rose Law Group represents Century Communities, D.R. Horton, Lennar, Meritage Homes, and Taylor Morrison.)
By Vincent Salandro | Builder
Affordability constraints and weaker consumer confidence remained headwinds for home builders during the first quarter of 2026. These macro headwinds were exacerbated by concerns related to inflation, interest rates, and energy prices in part due to the ripple effects of the Iran war.
Despite these headwinds, both new and persistent, public builders reported that demand is beginning to stabilize as orders, absorption, and cancellation trends generally moved in positive directions ahead of the spring selling season. A consistent theme across public earnings calls were strategic approaches that valued sales pace over price and aligning starts pace with current demand patterns.
The first quarter earnings period also suggested there is no single prevailing strategy for operating in the current challenging housing market. PulteGroup, Taylor Morrison, and KB Home highlighted a strategic shift to a higher mix of to-be-built homes, selling through spec inventory while increasing backlogs. Meritage Homes and LGI Homes, 100% spec builders, position their product to directly compete with the resale and rental markets, offering similar move-in timelines for prospective buyers.
