The 2025 spring home-selling season fell flat for many of the nation’s top home builders, as economic uncertainty, shaky consumer confidence, and high mortgage rates kept buyers on the sidelines.
Public builders saw sluggish buyer traffic and softer order volumes in the first few months of the year. D.R. Horton set the tone with a dip in orders and closings—an early signal of the season's challenges. Though some companies still notched year-over-year gains, leaders across the industry agree: 2025 is shaping up to be bumpy.
Executives downplayed any near-term cost spikes from recent tariff moves. But they admit the constant policy shifts are rattling consumers. Many builders cited strong domestic supply chains or scale advantages to offset any long-term impact.
“The headline news of tariffs and their potential inflationary effects has dampened buyer confidence,” said TriPointe Homes CEO Doug Bauer. “However, we do not believe tariffs will have a material impact on our cost structure in Q2 2025.”
Most CEOs say sentiment—not supply—is the key issue. Incentives such as mortgage buydowns, design upgrades, and price cuts are back in play to push deals across the finish line.
“We expect our incentive levels to remain elevated and increase further, the extent to which will depend on market conditions and changes in mortgage interest rates,” said D.R. Horton CEO Paul Romanowski.
Builders remain bullish on long-term fundamentals, including demographics and housing shortages. But they’re bracing for more short-term volatility.
“The macro economy remains challenging… actionable demand has slowed materially,” said Lennar’s Stuart Miller.
“Even in the face of rising incentives… our diversified portfolio is relatively insulated,” added Taylor Morrison CEO Sheryl Palmer.
If mortgage rates ease, buyer interest could rebound. For now, builders are trimming land spending, leaning into high-demand segments such as active adults and move-up buyers, and stocking up on quick move-in homes.
“We continue to target our sales efforts and incentives on monetizing and completing homes,” said Century Communities' Dale Francescon.
“Demand at the start of the spring selling season has been more muted than we have seen over the past few years,” noted KB Home CEO Jeffrey Mezger.
The spring season didn’t deliver. Builders are adapting, but all eyes are on the Fed, the job market, and consumer mood. Until confidence returns, expect a more cautious climb through the rest of 2025.
