Homebuilding's seasonal calendar has turned to summer. For much of the new-home construction industry, the heat is on.

The spring selling season—typically the most robust period for new home sales—underwhelmed. As homebuilders look to salvage the remainder of the year, clouds of uncertainty dominate the outlook.

A sharp June drop in builder confidence marked the third-lowest reading since 2012, according to the NAHB/Wells Fargo Housing Market Index. Most builders—37%, the highest on record—reported cutting prices. Incentives, already prevalent, are now standard operating procedure. Meanwhile, new home starts have flatlined. Single-family starts in May increased just 0.4% from April but remain 7.3% lower year-over-year. Permits—an indicator of future starts—are also underachieving last year's benchmarks and trending down.

The Fed has paused its rate cuts, waiting to see how tariffs and inflation shake out. Mortgage rates remain stubbornly high. Meanwhile, buyers remain hesitant, worn down by affordability pressures and mixed or worse economic signals.

This was the backdrop for a recent conversation with Dan White, Lead Market Strategist at New Home Star. Dan’s vantage point—working across a range of builder partners and geographies—offers one of the clearest pictures of how homebuilders cope with, adapt to, and strategize through a stalling market.

Here are six takeaways from that conversation, each backed by a direct quote from White, and contextualized in a moment when the nation’s largest public builders are aggressively setting the pace through pricing pressure, production discipline, and strategic deal-making.

1. The Spring Selling Season Never Showed Up

“We expected things to ramp up in April and May, but they never really did. It was like waiting for a train that never arrived.”

Builders didn’t get the spring momentum they rely on. Instead of increasing foot traffic and contract signings, activity remained muted. Incentives and discounts grew, but buyer urgency didn’t follow.

2. The Summer Looks Slower, But Not Hopeless

“Summer’s typically slower anyway, but what’s worrying is the lack of urgency. Even when buyers are interested, they’re hesitating.”

White notes consumers' growing “wait-and-see” mindset, driven by elevated mortgage rates, rising insurance costs, flashing signs of weaker jobs and income security, and a broader sense of economic unease. Builders are responding with more aggressive promotions—but so far, without consistent or sustainable payoff.

3. Builders Are Stuck in an Incentives Loop

“We’ve seen a race to the bottom on pricing. But you can’t incentivize your way out of hesitation if the buyer psychology isn’t there.”

It’s not just about affordability—it’s about confidence. Builders throw every tool they have at buyers: interest rate buydowns, closing cost assistance, appliance upgrades. But without consumer certainty, conversion rates remain low.

This dynamic is exacerbated by the pricing tactics of large public builders like Lennar, which reported in Q2 a 13% average incentive rate—double historical norms. That pressure forces even smaller and mid-sized operators to follow suit.

No builder wants to be–nor can afford to be–late in a musical chairs-like game of dropping home prices in "air-pocket" markets that have amped up in ready-to-own new-home inventory.

4. The Market Is Fragmenting—And That Matters

“Some markets are holding up better than others. But even in strong metros, we see micro-fragmentation—pockets of strength and weakness in the same city.”

White describes a landscape in which traditional market-level analysis no longer suffices. Builders are having to go hyper-local, evaluating submarkets, product types, and even block-by-block sales patterns.

This is consistent with what Lennar executives described in their recent Q2 earnings call. In Nashville, for instance, the company’s 5.3 absorption pace—homes sold per month per community—is the fastest in its national portfolio, justifying its land acquisition of 2,500 lots from Willow Branch Homes

5. Market Share Battles Are Heating Up

“The big builders are playing long ball. They’re willing to sacrifice margin now to take share—and when the market turns, they’ll be in the driver’s seat.”

This is perhaps the most important strategic reality for the second half of 2025. Public builders, led by Lennar, D.R. Horton, PulteGroup, NVR and Meritage, are using aggressive pricing and land-light strategies to gain ground. Their volume-first models, like Lennar’s “even-flow” approach, give them leverage over suppliers and land sellers—and it’s working.

White’s insight here echoes a growing sentiment in the industry: This is not a lull. It’s a fight. And the builders willing to take short-term pain for long-term positioning are likely to come out stronger.

“They’re not just competing for this month’s buyer. They’re setting up for the restart—whenever it comes.”

6. Success Now Means Managing Every Lever

“You can’t coast. If you’re not actively managing every part of your operation—marketing, pricing, sales training, product—you’re falling behind.”

White emphasizes execution. In a market where every buyer is hard-won, builders can’t afford to be reactive. The companies finding some traction are the ones who are deliberate about their messaging, aggressive but strategic in their discounting, and relentless in following up with leads.

He also notes that companies must keep investing in training and tools, even when budgets are tight.

If your sales team doesn’t know how to sell in this kind of environment,” he says, “then all the incentives in the world won’t help.”

Final Word: Not Just a Slow Patch—It’s a Strategic Moment

The temptation in a weak market is to wait it out. But White—and the data—suggest that this moment requires something different. Builders that treat 2025 as a strategic inflection point, rather than a holding pattern, may find themselves ahead of the curve when conditions improve.

The playbook is changing. Builders are moving toward asset-light models, price-flex strategies, and hyper-targeted land deals. They’re not betting on rate cuts or a flood of pent-up demand—they’re making moves now.

As White puts it:

“The market’s not going to come to you. You have to go win it.”

In the face of elevated mortgage rates, economic and policy uncertainty, and buyer paralysis, that’s a hard truth. But it’s one that the nation’s top builders—and those paying attention—are already acting on.