Most home builders anticipated that the most significant obstacles they would face this year would be elevated mortgage rates and buyer hesitancy at the beginning of 2026.
They were not mistaken: the 30-year mortgage rate averaged 6.49% in June, and housing demand has weakened, as evidenced by the stagnant number of mortgage applications in the first half of the year.
Consequently, new home sales are 7% lower than they were at this time last year, and builders have halted production, commencing 5% fewer homes than in the first half of 2025.
In this challenging business environment, the industry is undergoing a surge in consolidation activity as companies strive to achieve economies of scale and efficiencies.
Taylor Morrison, Tri Pointe Homes, and United Homes Group were acquired by Berkshire Hathaway, Sumitomo Forestry, and Stanley Martin Home, respectively, thus far in 2026.
In order to gain a more comprehensive understanding of the scope of this phenomenon among a representative sample of builders in the country, the NAHB/Wells Fargo Housing Market Index survey inquired about merger and acquisition (M&A) activity in August 2025 and again in June 2026.
The findings indicate that the proportion of builders who reported an increase in M&A activity in their local markets has increased from 14% in August 2025 to 21% in June 2026.
Nevertheless, over 40% of builders indicate that there have been no modifications to the consolidation trends in the markets in which they operate.
Another discovery suggests that the industry is experiencing slightly increased levels of M&A activity: the proportion of builders who have been approached for acquisition and/or merger increased from 9% to 18% between August 2025 and June 2026.
Consequently, the percentage of individuals who have not been contacted at all decreased from 87% to 78% during this time.
The majority of builders (61%) intend to expand organically within their current markets when queried about their future growth plans.
Only a small percentage of individuals intend to expand through acquisition (6%) or to be acquired by another company (5%).
Please refer to the comprehensive survey report.
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