A Market Defined by Volatility—and Consolidation

The U.S. homebuilding market in mid-2025 is not just volatile—the industry’s most prominent players dominate it more each day.

According to the NAHB’s Eye On Housing, the top 10 builders captured a record 44.7% of all new U.S. single-family home closings in 2024, up from 42.3% the prior year. Even more striking, the top 15 builders accounted for more than half (51%) of all closings for the first time.

Public builders have scale, capital market access, and land banking arrangements that give them a competitive edge,” says Tony Avila, CEO of Avila Real Estate Capital (AREC). “Smaller regional and private builders are often left behind as banks pull back and capital gets harder to secure.”

The growing concentration of market power is starkest in local markets. In 11 of the 50 largest metro areas, the top 10 builders control more than 90% of the market, with some regions approaching near-monopoly levels of dominance. As NAHB notes, in markets like Cincinnati, OH, the concentration reaches an extraordinary 97.8%.

This is the backdrop for AREC’s first real estate debt fund—a war chest aimed squarely at leveling the land and capital playing field for private homebuilders and developers.

Capital With an Edge

We have three major land and capital themes running through today's landscape,” Avila says. “First, we have a much higher interest rate environment. Secondly, we have banks exiting and reducing their exposure to land acquisition, land development, and homebuilding construction loans. Third, we have land banking, with builders trying to get more land off their balance sheets.”

For decades, local and regional builders relied on community banks to fund their land and vertical construction. These channels have shrunk, and continue to do so.

Banks are leaving their customer borrower high and dry,” Avila says. “As banks exit the business, developers and builders need acquisition and development loans, and we’ve been providing those as demand grows.”

AREC’s inaugural debt fund, closed in July 2025, is structured to do just that. The fund provides first mortgages for acquisition, development, and construction (AD&C), tailored to meet the needs of builders and developers who can’t access the favorable financing that gives the nation’s largest homebuilding enterprises advantageous optionality, heft, and near-term growth pathways.

Big-Builder Options for Private Operators

By design, AREC’s fund provides smaller and mid-sized builders with access to capital and professional property asset management capabilities—essential to remaining competitive in today’s market.

Developers need more flexible forms of capital than what traditional lenders can provide, especially in this environment,” Avila says. “That is precisely what we’re doing.”

Unlike traditional banks, AREC’s loans can feature longer terms, customized take-down schedules, and more adaptable covenants.

Our loans may have different covenants, leverage, or longer terms, allowing developers more time and flexibility compared to a bank’s rigid requirements,” Avila says. “There is often a lot of push and pull between traditional lenders and builders, especially when builders want slower take-downs or different product mixes. Coming from the development side, we understand these tensions and can structure loans to address them.”

Deep Operational Expertise

One of AREC’s distinguishing features is its asset management capability, backed by a team of industry veterans who’ve built, developed, and financed projects across multiple cycles. With senior hires like John Brimberry as Chief Lending Officer and Drew Szilagyi, Jerry Schillaci, Nathan Cichon, and Philip Trujillo, AREC’s originations team now brings more than 120 years of combined residential lending and development experience.

The first thing that sets us apart is relationships,” Avila says. “Our team has tremendous relationships with builders and developers, and they’ve successfully gotten deals done for decades.”

Avila emphasizes that no other private lender offers both this depth of experience and direct builder investment in its fund.

Few, if any other lenders has builders investing in their credit fund,” Avila says. “Public builders have taken cash off their balance sheets to invest in our fund, and in return, they can negotiate to buy lots through our borrowers.”

The Public vs. Private Divide

The rise of public builders has been accelerating for decades. In 1989, the top 10 builders accounted for just 8.7% of U.S. single-family closings. By 2006, that number had grown to 28.2%, and by 2024, it had surged to nearly half of all closings.

Public builders’ dominance stems from their ability to manage capital cycles, leverage land banking agreements, and secure financing on terms no local bank can match.

The strategy for the land bankers—Olympus, Angelo Gordon, and others—is to work with the top 20 builders on massive deals, often in the hundreds of millions of dollars,” Avila says. “We are not serving those top 20 builders, and we don’t own the land.”

Instead, AREC focuses on regional developers and private builders, providing first mortgages and construction loans while letting developers retain ownership of the land.

The developer buys the land, puts in equity, and enters into a contract to sell lots to the builder,” Avila explains. “The builder’s deposit sits behind us in the capital stack as additional collateral.”

Competing Where It Counts

For private builders facing a market where Lennar, D.R. Horton, and PulteGroup alone control nearly 30% of all closings, AREC’s model offers a way to compete on more equal footing. By supplying capital and hands-on expertise, AREC enables its clients to act with the agility and confidence of larger players.

We’re working with local and regional developers, or private builders,” Avila says. “We’ll also provide construction loans to private builders, with a first mortgage on the houses until they’re sold to consumers.”

AREC’s team also undertakes a meticulous underwriting process.

We’re going in and verifying everything—how fast the lots can sell, the pricing, the builder’s contracts, infrastructure costs, and builder margins—before we make a loan,” Avila explains. “We evaluate not just our borrower, but our borrower’s customer.”

Where AREC Is Active

The firm is deploying capital across a wide swath of high-demand markets. Recent deals have been completed in South Carolina, Orlando, Houston, Dallas, and other metro areas. AREC is also active in Boise, conducting on-the-ground evaluations of comps, development costs, and profitability before finalizing loans.

What we’re doing is making sure the economics work for both the developer and the builder,” Avila says. “That’s how we ensure every loan we originate has the best chance of success.”

The Bigger Picture: An Uneven Playing Field

As NAHB data shows, the average market share of the top 10 builders in the 50 largest metro areas is now nearly 80% (79.3%), with concentration rising year over year. For private builders and developers, this dominance represents both a challenge and an opportunity: compete smarter, or risk irrelevance.

Avila sees AREC as a crucial bridge.

Our goal is to give smaller builders access to the kind of capital and operational expertise that only big public companies have traditionally enjoyed,” he says. “We want them to be able to pivot, grow, and take advantage of opportunities without being hamstrung by outdated financing structures.”

Forward Look

Mid-2025 is a turning point. The industry’s most prominent builders are leveraging their capital strength to capture record market share, while local builders face rising headwinds. AREC’s fund offers a counterweight—a capital platform designed to empower smaller players with the scale, speed, and precision needed to compete.

Developers need more flexible forms of capital than what traditional lenders can provide,” Avila says. “That is precisely what we’re doing.”