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The Vertical | Issue No. 2 | May 7, 2025

The Vertical | Issue No. 2 | May 7, 2025

Housing Giants Are Taking Over - Who’s Paying the Price?

Jake Heller
May 07, 2025

In 2024, the top ten publicly traded homebuilders - D.R. Horton, Lennar, and others closed 306,932 single-family homes, grabbing 44.7% of the 686,000 new home sales. In 2023, they dominated with 51% of the 668,000 sales. Meanwhile, the number of builders closing 10 or more homes a year has collapsed from ~14,000 in 2005 to just 3,200 today. The big players are winning big, and smaller builders are getting squeezed.

This isn’t just about market share. It’s about control and who owns the land, shapes neighborhoods, and defines what “home” means in America. Right now, a handful of corporate giants are deciding, and scale is beating out local character.

How the Giants Are Pulling Away

The numbers say it all. D.R. Horton closed 93,311 homes in 2024. Lennar followed with 80,210. That’s more than all builders ranked 11–100 combined. Their formula:

Deep Pockets: Horton spent $1.5 billion on finished lots in Q4 alone, helping public builders secure 66% of all U.S. finished lots.
Strategic Land Moves: Lennar spun off $5.2 billion in land assets to Millrose Properties, controlling 105,440 homesites (Lennar Q1 2025 Report; CRE Daily).
Build-to-Rent Push: BTR made up 9% of all single-family starts - about 92,000 units - with Horton selling nearly 4,000 rental homes for $1.2 billion (Arbor Realty; D.R. Horton Q4 2024 Report).
Aggressive Buyer Incentives: With mortgage rates near 6.8%, Horton leaned into rate buydowns and closing credits, helping close 19,059 homes in Q1 2025 (Builder Magazine; D.R. Horton Q1 2025 Report).

Entrepreneur Angle: Want to break in? Start small. Micro-communities, prefab builds, and entitlement-first plays are creating margin for independent players.

Why Small Builders Are Struggling

Smaller builders, especially in California, are boxed in:

Regulatory Burden: Fees in places like Hesperia could cost $62,000 per home. Add CEQA compliance and national regulatory burdens, and the cost per home spikes.
Land Costs: In Southern California, lots range from $500K to over $1 million in urban areas, or $200K–$500K inland (Zillow; Redfin).
Financing Pressure: Smaller firms face 8–10% interest loans while public builders attract cheaper, bigger capital (Pro Builder; Bankrate).

The result? Fewer choices for buyers and more repetition:

Stock Plans Everywhere: Unique architecture is giving way to cookie-cutter layouts.
Customization Shrinking: Semi-custom options are harder to find as builders prioritize efficiency.

The Builders Who Are Adapting

Despite the headwinds, some builders are fighting back:

Urban Infill: Modular construction is helping cut costs by 20–25%, making tight lots more feasible.
ADUs and Micro-Lots: With LA issuing over 7,000 ADU permits in 2022 and statewide numbers climbing in 2024, small-scale density is back in play (California YIMBY; HousingWire).
Entitlement Savvy: Some builders are acquiring raw land, entitling it themselves, and building or flipping it at a much lower basis.
Lean, Local, and Fast: Smaller builders who control their own capital stack and keep teams lean can jump on deals the big guys ignore. No red tape, no 12-layer approval chains.
Design as Differentiation: While the giants stick to stock plans, some builders are winning with thoughtful architecture, curb appeal, and brand. Buyers notice. Cities do too.

Is this the future of American housing?

Identical rooftops, vanishing variety

Why This Should Matter to You

Yes, consolidation delivers homes faster. The median new home shrank to ~2,233 sq. ft. in 2023, the smallest in over a decade. Prices hit $412,300 in Q2 2024. And big builders can still build cheaper - $90/foot in some places.

But the downsides aren’t small:

Bland Subdivisions: In Arizona, builders like PulteGroup lean on a few floor plans to hit demand, making subdivisions feel repetitive
Less Variety: Fewer builders means fewer perspectives, styles, and solutions.
Market Fragility: D.R. Horton’s cautious Texas pullback in Q3 2024 slowed starts by thousands, proving over-reliance on giants is risky

What We Can Do About It

For Cities:

Cap Approval Timelines
Entitlements and building permits for projects under 50 units should be approved in 3 months or less. Period.
Kill the Junk Fees
Waive ADU and small infill impact fees that make modest projects unviable.
Fix the Zoning Code
Let builders use smaller lots and allow duplexes, fourplexes, and townhomes by-right, not by negotiation.
Streamline Small Projects
End CEQA reviews and discretionary hearings for infill projects under a set threshold.
Partner on Infrastructure
Use public-private agreements to build needed infrastructure without burying projects in endless conditions of approval.
Pre-Approve Plans for Infill Housing
Offer city-approved plan sets for duplexes, ADUs, and small-lot homes to reduce soft costs and time-to-permit for small builders.

For Buyers:

Support Builders with a Vision
Choose developers who care about design, not just volume.
Ask Better Questions
What makes this home different? How was it built? Who built it?
Look Beyond the Logos
Big brands aren’t always better. Local builders are still out there and they need your support.

For Policymakers:

Fund the Underdogs
Create revolving loan funds for ADU builders and small developers to compete with Wall Street capital.
Reward Delivery, Not Paperwork
Offer tax credits for actual units delivered, not for stalled plans or studies.
Unlock Public Land
Lease underused public land to developers building middle-income and workforce housing.
Let Cities Experiment
Let localities experiment with leaner codes, modular pilot zones, and prefab-friendly overlays.

The future of American housing is being decided now - by builders, cities, and buyers like you. Will we settle for sameness, or build something better?

What do you see where you live?
Fewer choices?
Copy-paste subdivisions?
Local builders disappearing?