Site Prep Contractors NAICS 238910

Oct 9, 2025 - Homebuilders Reduce Volume to Preserve Margins

• Amid weak market conditions, some homebuilders are pulling back on production to protect profit margins. In their recent quarterly reporting, homebuilders KB Homes and Lennar reported lower third-quarter profits as high mortgage rates and economic uncertainty keep buyers on the sidelines, according to The Wall Street Journal. Some builders have found their margins squeezed as they offer incentives to lure buyers and clear inventories of unsold homes built on spec. The homebuilding industry is hopeful that lower interest rates will bring in new buyers. Still, some industry observers suggest softness in the US job market could prolong a comeback for the US housing sector. In its third-quarter reporting, KB Homes cut its full-year guidance to $6.1 billion to $6.2 billion, down from its Q2 estimate of $6.3 billion to $6.5 billion.
• New single-family home sales rose 20.5% month-over-month and 15.4% year-over-year in August 2025, according to the US Census Bureau. August’s new home sales reached 800,000 units, the highest number since January 2022. However, some economists told Reuters that the August new home sales numbers are probably inflated and may be revised downward later this year. Other housing bellwether metrics, including builder sentiment and job growth, don’t suggest a sudden surge in new home sales. However, falling interest rates could revitalize the sluggish housing market. The Federal Reserve cut its benchmark overnight interest rate from 4.25% to 4.0% on September 18 amid a tepid labor market, and the central bank is expected to announce more cuts before the end of the year.

• Demand for building design services rose slightly in August from the prior month, but design demand remained in negative territory, according to a September report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 47.2 compared to July’s reading of 46.2. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries dropped to 50.3 in August from 53.4 in July, and the index for the value of new design contracts decreased from 47.9 to 47.2. August marked the 18th consecutive month of decline for new design contracts, the longest slump in the 15 years the AIA has collected data. However, the AIA’s Chief Economist, Kermit Baker said, "While business conditions remained soft at architecture firms nationally, there are signs that the downturn may be bottoming out. Inquiries for new projects have increased four straight months, and billings both at firms with a multifamily or commercial/industrial specialization are beginning to stabilize."
• While the availability of lots for building single-family homes has improved since the pandemic, lot shortages remain a challenge for builders, according to the National Association of Home Builders (NAHB). In a recent NAHB survey of builders, 64% reported coping with some level of shortage, with 38% saying lot supplies were “low” and 26% saying they were “very low.” The share of builders reporting shortages peaked in 2021 at 76%, about a year into the pandemic. However, the percentage of builders experiencing lot shortages has remained above 60% since 2015. In addition to the scarcity of available lots, builders continue to face other stubborn headwinds, including high materials costs, tight credit availability, and attracting enough skilled labor.