2026 Forum for Housing Executives Recap
The 2026 Forum for Homebuilding Executives included executives from homebuilders and developers that are responsible for more than 50% of new home construction in the US. The event offered attendees an opportunity for candid discussions of current market conditions as well as challenges, and opportunities facing public and private homebuilders.
M&A
M&A environment remains active as acquisitions supplement slowed organic growth. Buyer competition for builders that have more resilient operations. In some instances, there is a bid-ask spread when earnings projections have declined. Japanese acquirers are very acquisitive and have structural advantages. Private builders have become more acquisitive, representing 6 of BAG’s last 10 transactions.
Macro & Consumer Confidence
Geopolitical uncertainty, recession fears, and stock market volatility are suppressing buyer sentiment more than any structural issue; a resolution to current tensions could unlock meaningful spring demand.
Interest Rates
Expecting two additional Fed Funds rate cuts in 2026; 30-year mortgage rates projected at 5.75% by year-end if geopolitical conditions stabilize; consensus holds rates in the high-5s to mid-6s through 2027.
Affordability
Home prices remain ~21% less affordable than historical norms; a household needs to earn $112K to afford a $500K home against a median U.S. income of $78K; normalization is still 2+ years away.
Housing Demand
New home sales up 2% YoY through February but spring selling season is off to slower start; entry-level facing more headwinds than move-up.
US GDP
Expect global GDP to be reduced by 1% due to oil price shocks; expect US GDP projections to be reduced by at least a half of one percent.
Land banking
Every public builder agrees that Millrose has lowered their cost of land banking with more competition amongst land bankers. Builders are mixed on the benefits of land banking. Some argue the cost of capital is much higher than borrowing with bonds or off a bank credit facility.
Immigration
Down ~50% YoY, creating simultaneous headwinds for labor supply, job growth, and housing demand; outsized impact on Texas, Florida, North Carolina, and California.
Private Lender Pivot
As traditional banks impose more restrictive covenants, builders and developers are shifting toward private lenders, such as AREC, for more flexible financing solutions that are better aligned with builder strategies.
Builder Strategy
Builders are taking opposite approaches, some scaling back land and community count to protect margins, others investing ahead of an anticipated recovery; operational efficiency (speed, cost discipline, AI) is the new competitive edge.
BTR Legislation
Proposed federal bill would cap institutional SFR ownership; institutional capital already beginning to exit regardless of final outcome; BTR represents 10%+ of sales volume for some builders.
Long-Term Outlook
U.S. underbuilt by 1.1M homes; builder balance sheets strong; demographics favor recovery, missing ingredient is consumer confidence.
