Fewer buyers are coming through the door. More builders are cutting prices to get them there. More are offering incentives once they arrive. And increasingly, neither appears sufficient to make them buy.
That is the operating reality homebuilders carry into the final stretch of 2026. Builder confidence has fallen to a one-year low. Prospective-buyer traffic is still deeply depressed. Forward-looking single-family permits slipped again in August. And higher financing costs have further complicated the outlook for builders and their customers.
For homebuilding companies, that raises the stakes on a mandate we have followed throughout this Built for This series: get better.
Taylor Morrison Homes Chair and CEO Sheryl Palmer push that mandate one step further. Getting better starts with knowing exactly whom you’re getting better for and why, and building the trust that makes people want to do business with you repeatedly.
That begins with the homebuyer, but it does not end there. Trade partners, land sellers, materials suppliers, localities and neighbors, lenders and investors, and the people who work inside the company all make choices about whom they trust with their time, money, property, capital and reputations.
This focus will be in the cross-hairs of Sheryl’s keynote at the upcoming HousingWire Homebuilder Summit, Oct. 19-21, in Dallas.
Homebuilding executives have long understood the scaling power of capital and market share. Palmer’s operating philosophy points toward another form of scale that may matter even more when business gets harder: the breeder-reactor power of trust.
Trust cannot rescue a bad land basis, manufacture a qualified buyer or make expensive capital cheap. But accumulated across thousands of interactions and reinforced by a company’s systems, people and behavior, it can become an operating asset, one that makes every other resource a builder has work harder.
Don’t mess with reputation
Palmer has had an unusual opportunity to see that principle tested against one of the world’s largest and most successful business organizations.
Taylor Morrison’s acquisition by Berkshire Hathaway has given Palmer a close-up view of an enterprise whose financial scale is without parallel. What struck her in the conversations leading to the transaction, however, was how much attention Berkshire pays to something far less tangible.
“They really do study the companies, the people, and the whole customer centricity,” Palmer told me. “It is such an important ingredient in the way they think about business and their leadership.”
As the deal moved toward contract, Palmer asked Greg Abel what she needed to understand about Berkshire that an outsider would not necessarily see, something that could help her succeed inside the organization.
“He thought about it for a second,” Palmer recalled. “He said, ‘Sheryl, there’s just one thing: don’t mess with our reputation.’”
Palmer connected Abel’s admonition to Warren Buffett’s longstanding message that financial mistakes are survivable, whereas damage to reputation is not. Decades later, she said, that principle remains “very much the company mantra.”
That matters because reputation is trust made visible over time. It is the accumulated record of whether a company does what it says it will do, particularly when circumstances make doing so difficult.
The customer gets scarcer
Circumstances are making plenty of things difficult for builders now.
The NAHB/Wells Fargo Housing Market Index fell three points to 32 in September, its lowest level in a year. Sixty-six percent of builders reported using sales incentives, while 38% cut prices.
BTIG’s August survey of small and mid-sized builders told much the same story from the field. Just 19% reported year-over-year sales gains, while 42% reported declines, even as price reductions and incentive use increased.
There are countercurrents. Wolfe Research’s private-builder survey showed August orders outperforming normal seasonal improvement. Yet 92% of respondents said higher mortgage rates were making it harder for Realtors to find customers to bring through their model complexes.
The market has not stopped. It has narrowed, and, word from the field is, it continues to do so.
A selling environment that is seeking its floor changes the value of each customer interaction. When qualified prospects are plentiful, organizations can tolerate some friction, inconsistency and even indifference and still make their numbers. When the pool contracts, every missed signal, broken promise, unnecessary complication and poorly understood customer need gets more expensive.
For Palmer, none of this requires inventing a new customer strategy for a down market. Taylor Morrison has spent years trying to make customer relationships part of the way the company itself runs.
Start on the inside
Palmer traces that work back to Taylor Morrison’s “love the customer” initiative. Its starting point was not the person walking into a sales center. It was the people already inside the company.
“You can’t have the true customer relationship if you don’t have, you know, the right relationships internally,” Palmer said. Over the past seven years, she said, the organization has embraced that idea to the point that “it’s just part of the DNA of how we operate.”
Her next observation gets closer to the operating discipline underneath the phrase.
“It’s not just — you can’t just turn it on and off with your customers.”
A company cannot ask an employee to create trust at the sales center or kitchen table if its own systems and management practices routinely create distrust inside the organization. Nor can it expect trades, land sellers, suppliers or capital partners to experience a fundamentally different company from the one its employees experience every day.
Palmer said she is already seeing a similar alignment during her first months working more closely with Berkshire and the Clayton Homes companies. After spending time with her expanded team, she described a culture centered on “doing good, doing right.”
“It’s business,” she said. “You make the right decisions. You don’t run and hide from anything.”
Listening needs infrastructure
There is a direct connection between that philosophy and another operating imperative running through Built for This: getting a company’s data and systems right.
Homebuilders have spent years assembling ERP systems, CRMs, construction-management tools, purchasing data, warranty records, customer surveys and sales platforms. AI has added new urgency to cleaning, connecting and making useful sense of those information streams.
But the ultimate payoff should not be measured only in automated tasks or hours saved.
Better systems should make a builder more perceptive. They should help an organization understand what is happening to its customers, internal and external, and act while the information still matters.
Customers tell builders things constantly. They do it through the floorplan they choose and the option or amenity or feature they do not. Through the community they visit twice but don’t buy in. Through the financing structure that makes a payment work, the warranty call that exposes a recurring problem, the survey response that reveals friction and the referral that signals something went right.
Most builders own enormous amounts of that information. The harder task is turning it into actionable, institutional knowledge rather than leaving it stranded inside departments, systems or individual relationships.
That is why securing a company’s data DNA is bigger than a technology initiative. Better data and operating systems create organizational capacity to listen. Listening creates understanding. Understanding enables better decisions and experiences. Repeated delivery against those expectations builds trust.
Trust compounds
For years, homebuilding’s largest operators have enjoyed advantages that are easy to see. Scale can mean cheaper capital, purchasing leverage, deeper land pipelines, broader access to mortgage incentives and enough geographic diversification to absorb weakness in individual markets.
Trust is harder to put on a balance sheet. Yet it, too, can compound.
A land seller who believes a builder will close has reason to take its call. A trade partner who trusts schedules and payment practices have reason to put its best people on that builder’s jobs. A lender or investor who trusts management’s judgment enters a difficult stretch with a different history. A municipality or neighborhood that has seen a developer do what it promised enters the next conversation differently, too.
Inside the company, trust can give people the confidence to surface unwelcome news early, challenge assumptions and own outcomes rather than spend energy protecting themselves from the consequences of saying what others do not want to hear.
And a homeowner who trusts the company behind the house can become something more valuable than a closing. That customer can become a referral, a repeat buyer, an advocate and a continuing source of intelligence about what the company should do better next time.
None of those relationships eliminates the need for competitive economics. They can improve the conditions under which those economics have to work.
Care as an operating discipline
“Care” can sound soft in an industry that measures itself in starts, closings, gross margin, cycle time and return on inventory. Practiced seriously, it is anything but.
Care means knowing when a customer is struggling before a cancellation appears in a report. It means understanding why a trade partner repeatedly misses a handoff rather than merely recording the miss. It means knowing what employees experience inside processes executives assume are working, and what a land seller, neighbor or municipal official will remember about the company after a transaction ends.
Most importantly, it requires acting on what the organization learns.
That becomes particularly important when the easiest response to weak demand is another concession. Rate buydowns, closing-cost assistance and selective price adjustments are still essential tools for bridging affordability gaps, but when two-thirds of builders are already using incentives, another incentive alone creates little differentiation.
Knowing the customer can. That can mean understanding which feature or functionality tradeoff preserves value without adding cost, which finish detail matters enough to protect, which monthly payment changes the purchase decision or where a cumbersome process is giving an already-hesitant buyer another reason to wait.
It can also mean knowing when not to chase a sale. Customer focus and operating discipline are not opposites. A company that understands its buyer more precisely should be better equipped to distinguish value creation from margin given away without changing the outcome.
What gets built in tough times
That brings Palmer’s philosophy back to the larger question behind Built for This.
This series has looked at leaders responding to a difficult housing market by working on capabilities they control. National Home Corp. has attacked the business through repeatability and continuous improvement. StyleCraft Builders has emphasized precision around the fundamentals. Park Street Homes has applied production discipline to the complexities of urban infill. DRB Group’s Char Kurihara has connected functions that too often operate apart. HistoryMaker Homes has rebuilt its technology and data architecture around the customer.
Different companies. Different circumstances. The common thread is an unwillingness to wait for the market to make the business easier.
Palmer adds something essential to that progression. Better systems, cleaner data, faster cycle times and stronger financial controls create capacity. Leadership still must decide what that capacity is for. At Taylor Morrison, Palmer’s answer starts with people.
It means building an organization capable of hearing customers when what they want is changing, earning confidence among the people and institutions the company depends on, and keeping promises consistently enough that trust accumulates rather than resets with every transaction.
The final months of 2026 are giving builders little reason to count on an outside rescue. Demand stays fragile. Financing has become more difficult. Costs are still stubborn, and the industry’s expanding menu of discounts and incentives has yet to unlock a durable pool of incremental buyers.
Companies still can know their customers better. They can connect information trapped in silos. They can make it easier for employees to act on what they learn. They can become more dependable partners to trades, land sellers, suppliers, communities and capital. And they can treat trust with the same seriousness they bring to land, capital, product and pace.
Capital can scale a homebuilder. Market share can scale a homebuilder.
Palmer’s experience suggests something harder to build, easier to lose and increasingly valuable when customers become scarce: Trust can scale a homebuilder, too.
