With a third or so of the public homebuilders’ first 2026 earnings cycle complete, the theme and variations – guidance misses, land impairments, margin compressions, even a net-negative-earnings or two, with the rare upside surprise – confirm it’s one of the most grinding, grueling selling environments in more than a decade.
Step back from the fray for a moment, and it’s a moment to appreciate something about strategy – military, sports, business, or life.
It needs to be prepared, adept, and canny at both offense and defense. Even to the extent that strategy sometimes takes a back seat to tactical responsiveness, agility, and nimbleness.
Now, at the risk of never letting the facts of a story get in the risk of a timely sports reference, in sports, it’s said of some winning teams, “the best offense is a great defense.” Sometimes, controlling the ball on offense wears down the competitors’ defense. As the days count down to Super Bowl LX at Levi’s Stadium in Santa Clara, Calif. – symbolically kicking off homebuilders’ critical spring selling season – homebuilding’s strategic and competitive metaphors align.
For a business case, Century Communities’ Q4 and full-year 2025 results are a strong starting point. We say this because what the Century team put on display is not “growth.”
Его control.
Control of pace. Control of inventory exposure. Control of construction cycle time. Control of direct costs. Control of fixed overhead. Control of land risk. Control of capital allocation. Control of the Century Communities business destiny.
That’s what “playing defense” looks like for a high-volume builder when consumers are living in a constant state of household angst — rates remain high, price points remain elevated, and there’s fear that home prices could soften enough to punish anyone who buys at the wrong moment.
In this market, defense doesn’t mean laying low. It means embracing contact to move the ball.
And Century’s Q4 “end-of-year sprint” is a textbook example of the industry-wide defense strategy: buy the sale to shed the wrong inventory, while tightening operations so the business is ready to accelerate when demand bounces back.
Defense move #1: “buy sales” to close out older, higher-cost communities
Century’s Q4 cadence wasn’t subtle. Century Communities Executive Chair Dale Francescon said deliveries benefited from the company’s focus on “increasing sales pace, particularly in older, higher-cost communities and communities in closeout, through the continued use of price and financing incentives,” which helped drive Q4 net orders to a company record of 2,702.
CEO and President Rob Francescon put math around the lever: incentives on closed homes averaged roughly 1,300 basis points in Q4, up 200 bps, driven by the pace strategy and the competitive year-end environment. He also highlighted the key strategic point: incentives have ranged from 600 bps to 1,300 bps since the start of 2024, which he described as “ample leverage” to pull back on if market conditions improve.
That’s the defensive play: accept margin pain to eliminate IRR miscalculations embedded in older community underwriting, and to reduce the drag from specs that don’t pencil in today’s reality.
Chief Financial Officer Scott Dixon underscored how the incentive lever shows up downstream: Century’s Q4 average sales price of $367,000 decreased 5% sequentially, and he said the decrease was “largely driven by increased incentive levels.”
This is what “buying sales” really is. It’s not just discounting. It’s actively converting risk into cash, shortening the time capital sits idle, and preventing old assumptions from impairing progress over the next 12 months.
Defense move #2: turn the construction clock into a competitive weapon
The crowning operational achievement in Century’s year wasn’t a headline EPS beat. It was this: cycle times down to a record 114 calendar days, and direct construction costs down by an average of $13,000 per start.
Those two numbers are not data slop. They’re effectively strategic moats.
In a worse-than-expected operating and selling context, cycle time is a builder’s version of defensive field position: it reduces exposure to changing demand, rates, incentives, and competition. It also reduces the builder’s need to “over-spec” the future.
And Century directly connected faster builds to reduced inventory risk: Dale Francescon said faster build times “allow us to reduce our finished spec inventory by nearly 30%.”
Now layer in what the investor deck makes explicit: Century has leaned into a spec-driven machine — 99% of total company home deliveries are spec builds, and Century Complete’s spec mix is 100%.
That matters because spec dominance is a double-edged sword in a weak market—unless the builder can build fast, price precisely, and finance creatively. Century is clearly trying to make spec homes less of a balance-sheet risk and more of a throughput advantage, emphasizing that spec construction “streamlines the construction process… resulting in more efficient build times” and supports “quicker inventory turns and improved ROE.”
Defense here is about narrowing the window during which anything can go wrong.
Defense move #3: affordability with product plus financing, not hope
Century’s brand position sits in the part of the market where “pent-up demand” is evident — but affordability math still rules the day.
The investor deck draws a clear line around where Century believes it plays, i.e., who the organization is:
Century Communities’ 10,387 new homes delivered in 2025 had an average sales price of $378,000, below the national average and median price shown on the slide, with Century Complete ASP of $261,600.
On the same slide, Century adds another key data point: 94% of total company home deliveries are priced below FHA limits (based on Q4 2025 deliveries).
Then there’s the financing layer — where Century’s vertical integration is functioning like a defensive shield against rate shock. Dixon reported an 84% mortgage capture rate (quarterly and annual records) and noted ARMs rose to “roughly 25%” of originations in Q4, with receptivity “increasing.”
This is defense as a combined-arms tactic: price/incentive, product, and mortgage structure. It is also, in practice, how builders continue to absorb fixed field costs when traffic is fragile.
Defense move #4: derisk the land book without ceding the ability to grow
The most underappreciated danger in a prolonged demand stall is not margins. It’s land. Particularly, “long on land.”
Century’s message is consistent: keep a growth runway, but don’t let the land pipeline dictate behavior.
Rob Francescon described the company’s “traditional land option strategy” as “flexible and reduces risk,” noting the flexibility “allowed us to adjust terms in many cases and achieve lower prices in some cases over the course of 2025,” and he pointed out the capital-at-risk reality: 26,000 option lots secured by nonrefundable deposits totaling just $74 million.
The investor deck reinforces the growth math while emphasizing the risk posture: Century highlights 60,916 lots (as of December 31, 2025), with 57% owned and 43% controlled. It also asserts that “existing lot supply and community count [are] supportive of 10% delivery growth in 2026 and 2027, assuming improved market conditions.”
That’s the defense/offense bridge: hold the option to accelerate without carrying the full downside of a land-heavy posture.
Defense now, offense later — but only If they control the clock
Century is doing what a large share of high-volume production builders are doing right now: Buying sales to clear inventory and closeout communities, plus
- Compressing cycle time to reduce risk windows and increase responsiveness
- Renegotiating direct costs and overhead to claw back profitability
- Holding land flexibility so the pipeline doesn’t become a trap
- Using finance tools (including higher ARM mix) to solve affordability equations in real time
And they’re doing it while protecting the balance sheet: the deck highlights liquidity of $1.1 billion and net homebuilding debt-to-capital of 25.9%.
Here’s the twist on the sports adage: for builders in 2025, the best offense isn’t a good defense. It’s a defense that lowers the cost of your next offensive drive. Century’s record cycle time, cost reductions, spec-machine discipline, and land optionality are all designed to do one thing: Be ready to turn demand into deliveries quickly — without having to re-load risk first.
And it’s the lead-in to the bigger question the next few quarters will answer for Century—and for the broader sector:
When the market finally loosens—whether it’s rates, confidence, or policy support—which builders have built the operational skill set to move from defense to offense without giving back the gains they made fighting through the mud?
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