If you’ve been on social media at this year’s International Builders Show, you wouldn’t have heard it.
The vibe wasn’t nervous. It wasn’t fun. It was something in between – a cautious hope that maybe, just maybe, the worst is behind us.
Traffic anecdotes sound better. Some manufacturers reported strong sales activity for January. Discussions moved on to the idea that the bottom half of the new home cycle may have arrived in early Q4 2025, and that what we are seeing now is the beginning of a slight turn.
But after a week of conversations with leaders across architecture, land, capital, technology and operations, one thought kept resurfacing: What if this isn’t a conservative prospect?
What if it is a realization of an over-optimism – a false reality that risks distracting the builders from the most important work right now?
Because the verdict that “the worst is over” won’t come from January traffic reports or early sales reports. It will be months from now, when we look back at the peak sales season and see what stuck.
July will tell the truth.
Not February.
IBS status: optimistic, but fragile
There is a reason that hope is returning to the debates.
After 18 months of grinding, the market has shown signs that at least it is not getting worse. Mortgage rates are stable. Consumers seem tired of waiting. Builders rely on incentives, small products, and aggressive performance reinforcement. But hope is not the same thing as long-term need.
As TBD contributor Scott Cox wrote this week in his analysis of the “special recession,” the sectors that typically produce new home buyers — high-paying professional roles and finance — are no longer producing the same rate of job growth. In fact, some are declining.
That’s a structural demand problem, not a cyclical blip.
And it’s important because today’s new home building economy requires buyers to have a decent six-figure income. When those contracts are in the pool of qualified buyers, the year-earlier momentum can end quickly once the first wave of foreclosure activity passes.
Meanwhile, the latest National Association of Homebuilders’ affordability data underscores the challenge. About 65% of US households cannot afford a new median-priced home by 2026. A $1,000 price increase — hardly a blip in most builders’ budgets — costs more than 150,000 homes off the market.
In other words, the margin of error is razor-thin. That is why relying too much on the story of “green shoots” in February can be dangerous.
The real test comes in July
There’s a difference between seeing signs of health in January and proving that consumers have regained confidence by mid-summer.
Early activity can indicate uncertainty fatigue – buyers decide to move on simply because they have delayed long enough. That’s not the same as “animal spirits” driven by rising incomes, strong job creation, and improving affordability.
The real test will only be seen after the peak sales season.
In early July, we will know:
- Pricing power was real.
- How much incentive spend builders need to keep pace.
- Whether the quality of the backlog has improved — or simply moved forward.
- And whether the buyer pool has expanded or simply shrunk.
Until then, the decisions of the betting strategy in the recovery of the early cycle are early.
A smart move is something that’s very unpleasant – and very impactful.
He sweated while counting the details.
An overlooked accessibility lever: efficiency
One of the most impressive themes from IBS was not just new technology or product innovation. It was a growing realization that homebuilders themselves control the biggest – and largely unappreciated – lever in the affordability equation.
Good performance.
Throughout the lifecycle, purchasing, global strategy, digital workflow, customer acquisition, and construction execution, double-digit cost savings remain locked within most real estate organizations.
Those costs come from the direct construction budget and overhead alike. They add up to higher base prices — which, as NAHB’s analysis shows, quickly creep into thousands of homes being sold off the market.
Industry tends to focus on regulatory burdens – and those are real and important. But internal inefficiencies play an equally powerful role in the challenge of affordability.
- Every day shave off the construction cycle.
- Always avoid reworking.
- All the smart world decisions.
- All digital integration improvements.
This is not just a performance win. The power to win.
And they are fully under the control of the producers – no matter what the Fed does next.
Why “better,” not just “bigger,” matters now
This is where the next section of Builder’s DayHousingWire’s work comes in.
Today, we invite home building leaders to participate in innovation HousingWire Homebuilder positionsa project designed to look beyond size alone and focus on what it means to be a better home builder.
The initiative will measure nearly 250 businesses by revenue and volume – but the real value goes deeper. With your participation, we will develop a measurement framework for the metrics that matter right now:
- Cycle time performance
- The backlog is turning
- Effectiveness of sales speed
- Material lighting techniques
- Results of customer transactions
- Implementation of the operation
This is not about changing existing industry standards. It’s about creating a strategic lens for leaders who want a clear understanding of how their peers are developing operations in a high-cost, high-uncertainty environment. Because the way to expand the buyer pool is not to wait for mortgage rates to drop. Build better businesses.
A call to action in 2026
The post-IBS message to homebuilding leaders is simple: Don’t confuse early momentum for long-lasting recovery.
The industry may be turning around – but the data isn’t clear yet. So many economic variables are still in flux, from job growth patterns to consumer income stability to cost-of-living pressures.
Between now and July, the most important move builders can make is doubling down on efficiency and customer proximity. Focus on digital transformation. Streamline workflow. Reduce friction during the buyer’s journey.
And participate in the HousingWire Homebuilder Rankings program so that, together, we can elevate the conversation on what makes a homebuilder not only great — but stronger, more efficient, and more resilient.
Because if affordability is the industry’s defining challenge, the solution won’t come from one interest rate decision or one season of improved traffic. It will come from the myriad of continuous improvements in the way builders design, plan, sell, and deliver homes.
The vibe at IBS suggested cautious optimism.
But the leaders who emerge strongest from 2026 will be the ones who treat this period not as a sign of relaxation – but as a mandate to be sharper, faster, and better at the only job they can control.
And that work begins now.
