{"id":62293,"date":"2026-02-10T03:05:09","date_gmt":"2026-02-10T02:05:09","guid":{"rendered":"https:\/\/housesmarketplace.com\/barrier-to-entry-builders-first-challenge-is-to-work-through-a-glut\/"},"modified":"2026-02-10T03:05:09","modified_gmt":"2026-02-10T02:05:09","slug":"barrier-to-entry-builders-first-challenge-is-to-work-through-a-glut","status":"publish","type":"post","link":"https:\/\/housesmarketplace.com\/ru\/barrier-to-entry-builders-first-challenge-is-to-work-through-a-glut\/","title":{"rendered":"Barrier to entry: builders\u2019 first challenge is to work through a glut"},"content":{"rendered":"
\n

For builders, particularly in the Sun Belt, the challenge from the get-go in 2026 will be to work through surplus entry-level inventory. As monthly-payment affordability pressures from high mortgage rates and home prices plague first-time buyers, solving this supply imbalance will only occur gradually.\u00a0<\/p>\n

The wait, however long, will be both a test of patience and financial tolerance. Builders are clearly taking action. In Texas, a state with an outsized surplus of entry-level inventory, one decisive step builders have taken is to slow down new construction, cutting back on both new permits and starts.<\/p>\n

John Winniford, President of Texas-based First America Homes<\/strong>, \u0441\u043a\u0430\u0437\u0430\u043b \u0415\u0436\u0435\u0434\u043d\u0435\u0432\u043d\u0430\u044f \u0433\u0430\u0437\u0435\u0442\u0430 \u0441\u0442\u0440\u043e\u0438\u0442\u0435\u043b\u044f<\/em> in an interview that much of the state\u2019s excess inventory is in the entry-level segment.<\/p>\n

First America, which builds entry-level homes in Houston and San Antonio, with plans to soon expand into Dallas and Austin, has itself cut back on new production for its primary customer segment.\u00a0<\/p>\n

When asked if he believes that the oversupply of homes in Texas will correct itself over time, Winniford said that he does, pointing to a slowdown in starts.\u00a0<\/p>\n

\u201cIt does look like, slowly, we are beginning to see some improvement. But again, unless we see a significant shift in consumer behavior, it\u2019s going to continue to take some time to work through,\u201d he explained.<\/p>\n

New home construction slows as builders scale back<\/h2>\n

There is evidence that Texas builders may be pulling back on new construction more than builders in most other states, signalling a correction.<\/p>\n

Homebuilders in the Dallas-Fort Worth metro, for example, started 17.7% fewer homes<\/a> year-over-year in the last quarter of 2025. Housing starts nationally declined by 7.8% year over year in October 2018.\u00a0 Census data also indicate that single-family building permits issued statewide in Texas declined by approximately 10.3% between January 2025 and October 2025, exceeding the national decline of 7.0%.\u00a0<\/p>\n

According to Winniford, excess entry-level supply began to build up in Texas in 2022, when mortgage rates began to increase.\u00a0<\/p>\n

\u201cBuilders began to focus on building either smaller homes or finding ways to reduce the total cost of homes. So I think rates were a big driver of pushing builders to build and add more supply into that entry-level or first-time buyer market,\u201d he said.\u00a0Moreover, during those early interest-rate-volatility days, buyers were showing a preference for move-in-ready spec homes, so many homebuilders increased spec starts to meet demand among these more skittish, rate-sensitive buyers.<\/p>\n

Is demand improving?<\/h2>\n

Some public builders, including \u0414\u043e\u043c\u0430 \u0411\u0438\u0437\u0435\u0440\u0430 <\/strong>\u0438 PulteGroup<\/strong>, noted on late January earnings calls that demand and traffic had increased since mid-December, at least nationally. Winniford said he sees the same trend in San Antonio and Houston, though it\u2019s uncertain how long it will last.\u00a0<\/p>\n

\u201cWe have seen an upward trend in traffic in the last six weeks or so, and that certainly is positive. The real question is, is it sustainable? Are we getting just a slight bump in consumer behavior because of seasonality, or is it a trend that may be more sustainable, that might be leading to, potentially, a little bit better spring selling season than we originally anticipated? I think it\u2019s still a little too early to tell,\u201d he said.\u00a0<\/p>\n

Winniford, like many other builders, notes consumer confidence as the key variable in the demand equation. An increase in consumer confidence could provide the biggest boost to entry-level buyers, the segment most sensitive to affordability constraints.\u00a0<\/p>\n

What the public builders are saying about Texas<\/h2>\n

Executives from several public builders recently called out Texas as one of the more challenging homebuilding environments nationally in the short term, largely due to an oversupply of new homes.\u00a0<\/p>\n

This supply imbalance pushed prices in the four largest Texas metro areas negative between November 2024 and November 2025, according to data from Zillow. These markets include Austin (-6.01%), Dallas (-3.86%), San Antonio (-2.65%) and Houston (-1.9%).\u00a0<\/p>\n

Jon Jaffee, former Co-CEO at \u041b\u0435\u043d\u043d\u0430\u0440<\/strong>, cited \u201cincreased inventory\u201d as the main reason prices fell in those markets during an earnings call last March.\u00a0<\/p>\n

\u201cIn general, homebuyers in Florida and Texas, our two highest volume states, needed more help than most other markets around the country. We needed more incentives in Florida and Texas markets to assist buyers in achieving mortgage payments they can afford,\u201d he said.\u00a0<\/p>\n

Ryan Marshall, PulteGroup\u2019s President & CEO, said during a Q4 2025 earnings call in January that Texas was one of the company\u2019s most difficult markets.\u00a0<\/p>\n

\u201cWe closed out the year with our Texas and West markets continuing to experience sluggish demand trends, although we may be seeing some signs of bottoming in Dallas and San Antonio,\u201d he said.\u00a0<\/p>\n

In July, Marshall similarly pointed to Dallas and Austin as difficult markets for Pulte.<\/p>\n

Paul Romanowski, President and CEO at \u0414\u043e\u043a\u0442\u043e\u0440 \u0425\u043e\u0440\u0442\u043e\u043d<\/strong>, referred to Texas as \u201cchoppy\u201d and market-to-market during an October earnings call. Without specifying which areas were underperformers, he said that some major markets \u201cstill have an elevated inventory level that we and the industry need to work through in the coming months.\u201d<\/p>\n

M\/I Homes<\/strong> CFO Phill Creek said in January that Texas was mixed, and explained that Dallas and Houston have performed well, while Austin and San Antonio are weaker. During Q4, M\/I Homes posted $51 million in impairments, primarily from entry-level communities with an average selling price of below $375,000. Most of those communities were located in the San Antonio and Austin markets.<\/p>\n

Is a post-bottom uptick in the Texas market in the works?<\/h2>\n

Despite difficult market conditions last year, home prices in large Texas markets are expected to increase in 2026. These forecasts, combined with strong population growth and a moderation in new home starts, could signal an upcoming stabilization and better days ahead for the Lone Star State\u2019s homebuilding market.\u00a0<\/p>\n

\u0410 2026 home price forecast<\/a> \u043e\u0442 \u0420\u0438\u044d\u043b\u0442\u043e\u0440.com<\/strong> forecasts that home prices in Austin (+2.0%), DFW (+1.8), Houston (+0.4%) and San Antonio (+0.2%) could all move up in 2026. Texas A&M University similarly forecasted<\/a> a 1.3 percent increase in the median home price in Texas this year.\u00a0\u00a0<\/p>\n

Winniford is optimistic about the state\u2019s ongoing economic expansion and population growth. Texas added 391,243 people<\/a> between July 2024 and July 2025, growing by 1.2%, nearly 2.5 times faster than the national average. The only states with a higher growth percentage were South Carolina, Idaho and North Carolina.\u00a0<\/p>\n

Texas additionally remains more affordable than many other states in the country, which is another draw for people coming from out of state. First America Homes\u2019s Lexington Heights<\/a> community in the Houston suburb of Willis, for example, offers a 3-bed, 2.5-bath model starting at $309,839.\u00a0<\/p>\n

Prices have gone up considerably since the pre-COVID era, but out-of-state movers from high-cost markets in California, Colorado, New York and beyond see Texas as a bargain in comparison.\u00a0<\/p>\n

\u201cIf you look nationally\u2026it is still very affordable to live here in the state of Texas. That\u2019s why I think Texas is so desirable in the longer term,\u201d Winniford said.\u00a0<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

For builders, particularly in the Sun Belt, the challenge from the get-go in 2026 will be to work through surplus entry-level inventory. As monthly-payment affordability pressures from high mortgage rates and home prices plague first-time buyers, solving this supply imbalance will only occur gradually.\u00a0 The wait, however long, will be both a test of patience […]<\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-62293","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nBarrier to entry: builders\u2019 first challenge is to work through a glut - Houses Marketplace<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/housesmarketplace.com\/ru\/barrier-to-entry-builders-first-challenge-is-to-work-through-a-glut\/\" \/>\n<meta property=\"og:locale\" content=\"ru_RU\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Barrier to entry: builders\u2019 first challenge is to work through a glut\" \/>\n<meta property=\"og:description\" content=\"For builders, particularly in the Sun Belt, the challenge from the get-go in 2026 will be to work through surplus entry-level inventory. 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