Despite challenging conditions during the back half of 2024, the majority of public home builders posted positive fourth quarter and full-year results.
Many fourth quarter earnings reports were highlighted by record levels of closings and deliveries.
Heading into a year with yet more uncertainty, executives from public companies maintained optimistic outlooks for the industry. Impacts from interest rates and tariffs will likely impact demand and construction costs while affordability remains a top concern for many would-be buyers. Additionally, Zonda data suggests incentives were becoming less effective ahead of the spring selling season.
However, many public companies were resolute, guiding for volume and community count growth in 2025. Additionally, as many public companies have shifted to land-light models, balance sheets and short-term land outlooks are also in good shape.
A collection of perspectives, outlooks, reflections, and operational highlights from public builders during the most recent earnings cycle are compiled below:
“Although both new and existing home inventories have increased from historically low levels, the supply of homes at affordable price points is generally still limited. To help spur demand and address affordability, we are continuing to use incentives such as mortgage rate buydowns, and we have continued to start and sell more of our smaller floor plans. We typically experience our seasonally slowest sales demand in the first quarter, and our tenured local operators seek to find the right balance of sales pace, pricing, incentives, and inventory levels to position each community for optimal returns as we enter spring.” — Paul Romanowski, president and CEO, D.R. Horton
“While consumers remain employed and are generally confident that they will remain employed and their compensation will rise, higher interest rates, and inflation have outstripped their ability or desire to act. We expect the broad-based demand cycle to reestablish as rates stabilize or even moderate and as pent-up demand continues to build against short supply, while demand has been constrained by affordability, the supply of homes remains constrained.” — Stuart Miller, executive chairman and co-CEO, Lennar
“Given our constructive views on the outlook for long-term housing demand, we are planning to continue to invest in our operations to support growing our business over time. Within our operating model, we set our starts pace to align with the sales environment rather than being based on a predetermined annual production volume. Home buying demand will impact our closing volumes and resulting growth from year-to-year.” — Ryan Marshall, CEO, PulteGroup
“Under our new strategy, we look at the total specs and backlog to assess our desired inventory levels. Most of the orders in the first four to six weeks of the quarter will become intra-quarter closings. Since our cycle times are back to our historical averages, we can now align our specs starts more closely with sales… As expected, we have been completing our specs to a later stage of construction prior to listing them for sale to ensure our customers can benefit from our 60-day closing commitment.” — Phillippe Lord, CEO, Meritage Homes
“Favorable year-over-year traffic within our communities as well as leads from our website indicate to us that consumers have a strong interest in homeownership, but are hesitant due to discomfort with the volatility in rates. Affordability drives decision making and we help buyers solve for this with our built to order model. In addition to offering buyers choice, our built to order model provides visibility in our forecasting and consistency in converting backlog to closings with more than 40% of fourth quarter deliveries coming from built to order sales.” — Jeffrey Mezger, president and CEO, KB Home
“Our prime location strategy continues to benefit from attractive underlying fundamentals by serving well-qualified home buyers in our entry-level, move-up, and resort lifestyle segments. Across our portfolio, we further diversify by offering both to-be-built and spec homes. In addition to aiding our sales opportunities, this balanced mix further insulates our margins from broader market pressures as to-be-built homes generate superior gross margins.” — Sheryl Palmer, chairman and CEO, Taylor Morrison
“We have seen mixed results so far this spring selling season. While demand has remained healthy in many of our markets, and particularly at the higher end, affordability constraints and growing inventories in certain markets are pressuring sales, especially at the lower end. However, we are somewhat encouraged by our sales activity [the week of Feb. 10]. Against this backdrop, we are carefully monitoring our price incentives and spec inventory on a community-by-community basis to best match local selling conditions.” — Douglas Yearley, chairman and CEO, Toll Brothers
“Despite the challenging and somewhat choppy market conditions, we believe that the home building industry will continue to benefit over the long-term from a continued undersupply of homes, positive consumer demographics, and growing household formations.” — Robert Schottenstein, president and CEO, M/I Homes
“We are always oriented toward the future and continuing to grow our earnings and produce above-average shareholder returns. We have set the foundation to continue to scale, drive sustainable growth, and generate long-term value. We initiate our 2025 full year guidance of approximately 9,250 expected home closings.” — Patrick Zalupski, president and CEO, Dream Finders Homes
“The outlook for the current year and the challenging dynamics experienced in 2024 are likely to continue. Therefore, we remain focused on what we can control: Hiring talented people, connecting with qualified buyers through targeted marketing, managing costs, starting affordable, move-in ready homes, and maintaining our strong balance sheet.” — Eric Lipar, CEO, LGI Homes
“The continued use of mortgage rate buydowns is the primary incentive being utilized by our buyers. It’s also related to a greater focus on pace versus price. During [the earnings period], incentives were 9.7% of the average sales price. This is up 160 basis points from a year ago and 670 basis points higher than fiscal 2022.” — Ara Hovnanian, CEO, Hovnanian Enterprises
“As we plan for 2025, there are additional political uncertainties that could cause consumer hesitancy and operating headwinds. Despite these macro headwinds, our communities are well-located in core markets and as a result, our strategy is to appropriately balance price and pace to ensure margin in the current market environment. So far in 2025, we have seen a pickup in demand from the fourth quarter, and we also see incentives trending lower as order momentum increases.” — Doug Bauer, CEO, Tri Pointe Homes
“We’re making mortgage financing for to-be-built homes more compelling. Short-term mortgage incentives tied to specs that can close right away have suppressed demand for homes that won’t be available for six months. To address this challenge, we’ve worked with our lenders to offer one-way rate locks with an embedded permanent rate buydown that provide protection from rising rates while allowing our buyers to benefit if rates happen to decline. Combining long-term rate locks with buydowns is an important innovation for us, and I think it will help with to-be-built sales.” — Allan Merrill, president and CEO, Beazer Homes
“Land has always been the cornerstone of our business and one of our biggest strategic advantages. Over the last several years, we believe we have assembled one of the best land and lot positions in our industry. Our footprints are concentrated in some of the fastest-growing residential markets in the country, notably Dallas-Fort Worth and Atlanta, which both benefit from robust demographic trends and healthy job markets.” — Jim Brickman, CEO and co-founder, Green Brick Partners
“As we look ahead to 2025 and move into the heart of the heart of the spring selling season, there are microeconomic and political uncertainties, particularly around interest rates and tariffs that may cause potential headwinds for the business. Despite some stabilization and inflation, affordability remains a significant challenge for our buyers. While there may be some near-term headwinds and additional pressure on margins, longer term we continue to remain optimistic about the outlook for our industry and Smith Douglas.” — Greg Bennett, president and CEO, Smith Douglas Homes
“While we continue to have move-in ready homes for sale in each of our communities, we are taking a more balanced approach when it comes to spec versus build-to-order. We have moderated our starts this quarter to be more in line with our desired levels and ultimately get closer to our 50-50 target of specs and build-to-order. The markets we build in remain economically vibrant and continue to benefit from job growth and in-migration from other parts of the country.” — Mike Forsum, chief operating officer, Landsea Homes
“I’m pleased with the steps our company has taken to build on the foundation that is already in place and to address the areas where we can improve. We’re in an enviable position of having essentially all of our land controlled by option agreements and have set the course for better profitability through the redesign of our product, the cost savings initiatives we have implemented, and improvements to our capital structure.” — Jack Micenko, president, United Homes Group
