WSJ What’s News - What’s News in Earnings: Homebuilders Offer Clues on the U.S. Housing Market

Episode Date: February 20, 2026

Bonus Episode for Feb. 20. Financial results from homebuilders PulteGroup, D.R. Horton and Toll Brothers give investors a peek at the forces shaping housing markets across the country ahead of the all-important spring selling season. Wall Street Journal national housing reporter Nicole Friedman discusses insights into affordability and regional differences. Veronica Dagher hosts this special bonus episode of What's News in Earnings, where we dig into companies’ earnings reports and analyst calls to find out what’s going on under the hood of the American economy. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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And this is What's News in Earnings. Our look at some of the biggest themes standing out this earnings season. The U.S. housing market is entering the 2026 spring selling season in an uneasy equilibrium. Mortgage rates have settled into a new normal, about 6%. But for many, the American dream feels further away than ever. The nation's biggest home builders are telling different stories about the housing market. This week, Toll Brothers reported a jump in profit fueled by luxury buyers. Meanwhile, the entry-level builder, D.R. Horton, is shrinking home sizes and piling on incentives just to keep first-time buyers in the game. And Pulte Group is highlighting the country's growing geographic divide. Joining me to break down

what all this means for the housing market is WSJ National Housing Reporter Nicole Friedman. Nicole, let's start with this geographic divide. Pulte Group is seeing a notable split. Demanded Florida was improving, but cooling for families in the West. How does what the company is saying reflect different housing trends across the country? Yeah, so we have definitely seen different housing markets in different parts of the country. there's been a lot more competition and rising home prices in the northeast and Midwest, where the inventory is still lower than normal. But in the south and west, we've seen much slower housing markets, even declining prices. And that's because there's been more supply of homes for sale in a lot of those markets.

Also, as Pulte Group noted, in the West, there's been more concern about a slowdown in the tech, sector in white-collar job hiring. And a lot of people are just unwilling to make a big purchase, like buying a home if they're not confident about their job security. And then Florida is interesting because it's been one of the slowest markets in the country. We've seen a lot of inventory for sale in Florida falling prices. And so now we're starting to hear from home builders and from local real estate agents that there's some pickup and demand in Florida. And so it's going to be important to watch this spring whether we're starting to see a turnaround in that market and if the lower prices there are starting to bring some buyers back. So affordability is such an

issue across the board. And builders are looking for ways to engineer through this affordability crisis. For example, D.R. Horton is shrinking floor plans to keep a lid on prices. And he here's Pulte Group CEO, Ryan Marshall, on the company's latest earnings call on talks they've had with the Trump administration. There's a lot being talked about, as I know you can appreciate it's hard because housing remains very, very local. And so, you know, I think the entire industry, us included, are going to continue to work with, you know, the administration to try and create more supply, which ultimately will impact affordability. Nicole, how are home builders trying to tackle affordability? So this is the major challenge for home builders is how to keep their homes affordable for buyers. And we're definitely seeing an investment in recent years in smaller homes, smaller floor plans that can kind of keep prices lower.

Also, home builders have really leaned into incentives. They're often offering lower mortgage rates for home buyers. So if you look at a big homebuilder's website, you can often see an advertisement for, you know, buy today at maybe a 5% mortgage rate or even under 5, which is lower than they could get if they bought an existing home. And so that's a big incentive. The latest survey from the National Association of Home Builders shows that two-thirds of home builders were offering incentives of some kind in February, and about a third of builders cut prices in February.

And this has become a big political topic that the administration is talking to home builders about. And so the builders are really eager right now to show that they are participating in this process and trying to collaborate with the administration. Nicole, this sounds like some good news for home buyers. What else are you hearing about the spring selling season and how it's shaping up? So the biggest thing going on right now heading into the spring selling season is that mortgage rates have come down, and they're about 6% right now. And so that can make a big difference for a buyer in terms of their monthly payment. Some builders have said in their recent earnings calls that

they started to see more foot traffic in January, so that can be an early sign of buyer interest. But it's a little too soon to say whether that will translate into actually more home sales. There's still a lot of buyers who are priced out. And so there's still work. that needs to be done in kind of improving their willingness to enter the market. That was Wall Street Journal, National Housing Reporter, Nicole Friedman. Nicole, thanks for joining us. Thank you for having me. And that was What's News in Earnings.

Today's show was produced by Pierre Bienname, with supervising producer Talley Arbell. Additional sound courtesy of S&P Global Market Intelligence. Later today, we'll have the PM edition of What's News out for you as usual. And we'll be back later this earnings season, diving into another industry. Until then, I'm Veronica Dagger. Have a great day.