Cautious optimism returns for 2026 as builder finance undergoes structural change

"The biggest surprise was the relatively positive tone. There was an overwhelming feeling that 2026 will be better than 2025 better orders and a better order pace per community. We've heard that directly from builders as well: some are still relatively flat, but most are saying year over year is better."

"That said, demand uncertainty is still front and center. In the survey, 56% of respondents said market or demand uncertainty is their No. 1 concern. In conversations with both public and private builders, that's still the core theme even when they're seeing signs of improvement."

"One nuance worth noting: larger builders were less optimistic. Among respondents over $1 billion in annual revenue, the skew was flatter to down versus last year."

Homebuilding executives surveyed by Builder Advisor Group and Avila Real Estate Capital express cautious optimism for 2026, anticipating better orders and improved order pace per community compared to 2025. Most builders report year-over-year improvements, with some experiencing their best orders in recent weeks. However, demand uncertainty dominates as the top concern for 56% of respondents. Notably, larger builders with over $1 billion in annual revenue show less optimism, with flatter to negative outlooks compared to the prior year. The industry is experiencing structural shifts in financing, moving away from traditional bank-led lending toward more equity-heavy capital structures, particularly for land acquisition.

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