The home building industry has traditionally been slow to adopt new technologies. However, technology is no longer seen as something to avoid, and the latest innovation, artificial intelligence, is one that experts believe builders cannot afford to overlook.
“When builders start realizing their competitors are pulling ahead of them, they will then start to look into AI more,” says Erik Cofield, vice president of strategy at Merlin AI, an AI-first construction ERP system. “Do not have your head in the sand. It will catch up to you and be to your detriment.”
The ephemeral nature of AI makes it more challenging to understand than tangible tools such as a new nail gun, yet its potential impact spans the entire home-building industry. From sales and marketing to project management and customer experience, AI solutions are already starting to equip builders with the tools to transform their operating models.
“The first year that AI came out, it was confusing to everybody and there was a lot of doubt. [But] this last year, you’ve seen an explosion of AI players and everybody is talking about it,” says John Lee, CEO of Anewgo, a software platform for new-home marketing and sales. “As consumers start to use AI in their daily lives, we’re starting to see a growing interest on the builder side.”
Understanding AI
After several years in the consumer market, AI tools can no longer be seen as merely a flash in the pan. Furthermore, with tools and solutions designed specifically for the home building industry, AI’s impact on builders has become a reality, not just a hypothetical scenario.
“AI is here to stay. This is the next major wave of technology. It is insanely powerful,” says Luke Groesbeck, co-founder of Foundation, a buyer experience platform for home builders. “We are not at the end of it or at the beginning of it. You can’t ignore AI or AI capabilities [because] it will change our lives, businesses, and how we work.”
AI is primarily observed in targeted, single-purpose solutions— tools created to automate manual, repetitive tasks. Generative AI tools can respond to inquiries and produce documents like sales contracts or change orders, while chatbots and automated telephone systems offer consumers 24/7 service.
A common concern about AI is the potential replacement of human jobs. Lee challenges this view.
“Why are you doing a robot’s job?” he says. “We should not be spending our valuable knowledge, human capabilities, and skills doing things that a robot can do at a massive scale. AI can service millions of people simultaneously; you could not staff enough people to do that.”
The time savings from single-point solutions can allow individual employees to allocate more time to high-value tasks. However, the future of AI will likely provide companies with even greater efficiencies.
Agentic AI—AI systems that act autonomously and make decisions without human input—along with AI agents, which are specific components that carry out tasks with a degree of autonomy, are poised to disrupt new home marketing, sales, and construction management while transforming the customer experience journey.
Use Cases
Lennar is a prime example of how large public builders can use AI to drive efficiencies. The builder partnered with AI software provider Palantir to streamline its land development bidding process, saving an estimated $2.5 million to $8 million per community.
Smaller builders can also utilize AI with solutions aimed at construction management, marketing, and the buyer experience. An AI-powered ERP system, such as Merlin AI, can help transform a home builder’s processes, optimizing everything from project planning and estimating to inventory control and sales enablement.
“AI agents are what is really going to transform the builder’s operations and make builders look into AI whether they want to or not. They do things that a human used to do, and [AI agents] act autonomously,” Cofield says. “About an hour of human work is done in two minutes. AI agents will help you do more with the people that you have.”
On the sales and marketing side of the business, Lee says AI assistance can help alleviate some common pain points in the customer journey.
“With AI assistants that can do the shopping across hundreds of portals and builder websites and then synthesize homes and communities that match your criterion and show you in multi-modal personal conversations, [this] will be revolutionary,” Lee says. “I think changes with Agentic AI to help you on the customer journey will start to impact our industry. To have an AI agent show you visually and walk you through the process, it will be transformative.”
Groesbeck suggests solutions such as Foundation or specific builder apps can take the home buying experience online. Foundation-powered apps allow homeowners to submit warranty requests, track home values over time, and access product information, while also streamlining communication between builders and buyers during construction and closing.
Regardless of the application, though, the underlying data is the most important element for builders.
“Data is the critical ingredient to making it all work. It also prevents you from all the [AI] hallucinations,” Lee says. “If you don’t have data, you can’t even get in the game.”
Where Will It Go
For Groesbeck, although AI is not a complete replacement for humanity, it can act as a catalyst for change. Before implementing AI solutions, builders should assess the outcomes they wish to achieve—whether it’s happier buyers, enhanced closing efficiency, or improved sales performance—and then choose the appropriate tool for each specific goal.
“You have to understand the job and be an expert in who the customer is,” Groesbeck says. “Start with expertise. That’s where AI comes in, as an accelerant, a rocket fuel, and a way to make better tools.”
As AI becomes more ingrained in daily life and consumers become more comfortable with AI experiences, Lee says these shifts will drive change in the home building industry. Cofield agrees, sharing the belief that AI will become ubiquitous in the coming years.
“If we didn’t already think that there was AI in everything, there’s going to be AI in everything. In your phone calls, web visits, the products you use,” Cofield says. “At some point, builders are going to have a paradigm shift. AI isn’t just about profitability; it’s about quality of life. AI is going to transform your business if you let it and give you a better quality of life at the same time.”
