After a challenging year in 2025, many builders entered 2026 with heightened expectations and a more optimistic outlook. The year started strongly as expected with fundamentals to support higher sales and volume targets, however new challenges have emerged that have again challenged the market.
The conflict with Iran has placed upward pressure on inflation and gas prices while also adding another reason for buyer hesitancy in the housing market.
“Our traffic, both web and foot, remains pretty strong,” Willy Nunn, president and founder of Florida-based Homes By WestBay, tells BUILDER. “But, no surprise, since the start of the Iran conflict, rising gas prices, rising inflation, rising interest rates, there has been less enthusiasm and we have had to work harder to get sales. That is a reality.”
The beginning of the Iran conflict at the beginning of the typical spring selling season has shifted the market, and many public builders have reported weak consumer confidence coupled with ongoing affordability concerns has made the 2026 housing market a difficult one to navigate.
Private builders are facing a similarly challenging market, with demand present but requiring more effort to convert sales and turn inventory. While builders cannot control rates, CBH Homes vice president Ronda Conger says a focus on what can be controlled, product, price, speed, and experience, is allowing builders to attract traffic and convert sales.
“Buyer demand has remained strong because we pay attention to what buyers are actually doing—not what the headlines say they might do. Too many builders let the media shape their strategy,” Conger explains. “People are still getting married, relocating, growing their families, and building their futures. Life does not pause for interest rates.”
Demand and the Spring Selling Season
Despite choppy current conditions, the first months of 2026 brought healthy demand patterns for private builders. Even amid renewed hesitation, Char Kurihara, senior vice president of sales and marketing for DRB Group says “top of funnel” traffic remains strong, with an increase in June web traffic, organic sessions, and total users. Missouri-based McBride Homes logged strong sales months in the wake of economic uncertainty, benefiting from its “Next Exit” expansion strategy of targeting exurban markets.
“Buyer demand has been strong across our communities, and our ability to offer a wide range of floorplans, locations, and price points continues to resonate,” says McBride Homes CEO Jake Eilermann.
Fischer Homes saw sales and demand increase in the first half of a “resilient” 2026, with CEO Tim McMahon noting “demand was there, but it required stronger execution to convert it.”
“The spring selling season [was] better than the first quarter suggested, but still more selective than what we would call a normal, broad-based spring market,” McMahon says. “We expected there to be a ‘pop’ in the spring selling season this year, but because of geopolitical issues, inflation, and the impact on interest rates, our sales results were off versus our business plan.”
While uncertainty has kept some buyers on the sidelines, Donna Franke, national sales director for Drees Homes, notes that buyers who are actively looking are “highly engaged and ready to act.”
“Their increased motivation and urgency are creating a more efficient path to purchase,” Franke continues.
For the engaged buyers, though, builders note they are more deliberate and spend more time evaluating price, product, and overall value before committing to a purchase.
“The biggest factor has been buyer caution,” McMahon of Fischer Homes says. “Customers are taking longer to make decisions, paying closer attention to affordability, and moving only when they are confident in both the monthly payment and the overall value proposition.”
For Texas-based Stylecraft Builders, CEO Doug French says the company’s strategy of entering the year with a diversified product mix and flexibility on incentives has allowed it to outperform broader market trends. He says first-half sales increased between 25% and 30% across most of its market, in part due to appropriately priced inventory and lessons learned from 2025 on incentives and financing strategies.
“One of the biggest factors supporting demand was flexibility in how we structured incentives,” French continues. “Rather than offering a predetermined package, we gave buyers a defined dollar amount that they could be flexible with.”
Even as traffic has remained healthy, builders say converting buyers requires more intentional sales execution. At DRB Group, leadership has intensified sales training and coaching efforts to help teams address buyer concerns beyond simply adjusting price or incentives.
“We are in the operations getting in front of our sales teams coaching them on how to support our customers through the ‘worry and concern’ that buying a new home today may be a mistake,” Kurihara says.
Similarly, CBH Homes says the focus remains on removing uncertainty from the buying process through transparent pricing, clear financing options, available inventory, and a streamlined customer experience.
“Our job is to replace uncertainty with clarity,” Conger says. “That means transparent pricing, understandable financing options, available inventory, and an easy path forward.”
Affordability, Incentives, and Adjusting to the Market
With affordability continuing to shape buyer decisions, private builders say success increasingly depends on controlling factors within their reach. Mortgage rates and consumer confidence may be outside of builders’ control, but a stronger focus on sales execution, operational efficiency, educating buyers, and deploying strategic incentives are still yielding results in the current environment.
“Our focus has been on the areas we can control,” Fischer Homes’ McMahon says. “We have worked to improve conversion, sharpen the customer experience, and make sure our teams are highly effective with every lead and every appointment.”
For Fischer Homes, these efforts are producing measurable results. Despite softer traffic levels, the Erlanger, Kentucky-based builder increased its conversion rate from 18% in 2025 to 20% in 2026, reflecting stronger execution throughout the sales process.
For CBH Homes, a focus on operational efficiency, build time, and transparency are providing buyers with greater certainty. The Boise, Idaho-based company has reduced its average build cycle to approximately 61 days while maintaining more than 500 move-in ready homes, allowing buyers to move within weeks rather than months. Similarly, Stylecraft Builders reduced its average build time by 30 days over the past year through greater discipline around starts, job costs, and construction schedules.
Rather than relying on across-the-board discounts, builders say incentives have become more targeted tools to overcome individual affordability challenges. For builders operating in the higher price points, like Florida-based Homes By WestBay, differentiation is more often in product and sales experience than incentives or pricing.
“We invest a lot in our system and process and meeting or exceeding customer expectations,” Nunn says. “We feel like we’ve got great land locations that outperform, particularly in the current environment.
Fischer Homes says incentives are used selectively in communities where they are needed, balancing sales pace with pricing discipline.
“Incentives are part of the operating environment, but they are not the whole story,” McMahon says. “We are using them selectively and strategically in communities that require them to move buyers forward.”
Stylecraft Builders has found success by giving buyers flexibility instead of predetermined incentive packages. Buyers can apply a set dollar amount toward the option that best fits their financial situation, whether that’s a rate buydown, closing costs, prepaid expenses, or a price reduction.
CBH Homes takes a similar approach, tailoring incentives to solve each buyer’s biggest obstacle rather than offering the largest possible discount.
“The goal is not simply to offer the largest incentive,” Conger says. “It is to understand the buyer’s greatest obstacle and help solve it.”
Beyond incentives, builders say educating buyers remains an important part of overcoming affordability concerns. Drees Homes continues to emphasize the long-term value of homeownership while expanding attainable product offerings, including townhomes, multigenerational floor plans, and its Pure Style Collection, which streamlines the building process while maintaining quality. The company says financing incentives have become an expected part of today’s market, but helping buyers understand their options is equally important in moving them toward homeownership.
Future Planning and Looking Ahead to 2027
While 2026 has been more challenging than anticipated for private builders, few are making wholesale changes to their long-term strategies. Instead, they are balancing short-term caution with continued confidence in the underlying demographics and fundamentals supporting demand for housing.
For many, the current environment has reinforced the importance of disciplined execution rather than aggressive expansion. As a result, builders are taking a more selective approach to land purchases, tightening underwriting standards, and aligning starts more closely with sales paces.
“Rather than pursuing growth at any cost, we continue to focus on locations that align with our long-term business plan, offer strong consumer demand, and support attainable price points for our buyers,” Eilermann of McBride Homes says. “Market cycles will change, but maintaining a strong land position in desirable locations allows us to continue delivering homes that meet the needs of buyers while protecting the long-term health of the business.
Drees Homes is continuing to pursue new land opportunities, but is more deliberate in where it is deploying capital. Stylecraft Builders notes softer conditions have created acquisition opportunities in markets that would have been far more competitive just a few years ago.
For others, the focus is less on changing strategy than improving execution. Long-term growth plans remain unchanged for Fischer Homes despite revising 2026 projections downward. The company is still targeting expansion into new markets and additional growth initiatives in the future.
“We are continuing to run our proven playbook in today’s environment and prepare for the market and affordability to improve,” McMahon says. “Our strategic growth plan remains intact; we are just being a little more patient and not forcing anything that would negatively impact our operating performance.”
Operational improvements are also becoming a key competitive advantage. CBH Homes says the lessons learned from 2026 thus far have reinforced the importance of speed, efficiency, and technology, with continued investments in shorter build cycles, move-in-ready inventory, and simplified customer experiences.
“Today’s customer expects instant information, digital access, transparency, speed, and convenience,” Conger says. “The builders willing to change alongside those expectations will find opportunity.”
Despite the near-term uncertainty, builders remain broadly optimistic about the industry’s longer-term outlook. Many expect affordability challenges and cautious consumer behavior to persist into 2027, but they see several tailwinds that could improve conditions, including lower interest rates, easing geopolitical uncertainty, and pent-up demand.
