KB Home bets on built-to-order strategy amid a spec-heavy market
Summary
KB Home is shifting its focus to a built-to-order (BTO) strategy, aiming for higher margins in a challenging market. Hosts should pay attention to this trend as it may impact competition and pricing in their local markets, especially if private builders react to the changes.
Key Insights
- •KB Home executives state built-to-order homes typically result in gross margins 300 to 500 basis points higher than spec homes.
- •The builder's quarterly gross profit margin was 17% and is expected to bottom out between 15.4% and 16% during Q1 of 2026.
Action Items
- ✓Consider how your local market may be impacted by shifts in builder strategies, especially if builders are focusing on either built-to-order or spec homes, and how those impacts could change your pricing strategy to remain competitive.Effort: mediumImpact: medium
Watch Out For
- ⚠Pivoting away from spec homes could lead to fewer sales and declining market share, even if margins do increase.
Related News
![An Overview of Dynamic Pricing for Hosts [+5 Tools Included]](/_next/image?url=https%3A%2F%2Fwww.igms.com%2Fcontent%2Fimages%2Fwordpress%2F2022%2F10%2FDepositphotos_dynamic_pricing.jpg&w=3840&q=75)
An Overview of Dynamic Pricing for Hosts [+5 Tools Included]
This article discusses dynamic pricing for short-term rentals, explaining how it works to optimize revenue and occupancy by adjusting rates based on market conditions. Hosts should consider implementing dynamic pricing, using tools that automatically adjust rates, to stay competitive and maximize profits.
United Real Estate CEO Dan Duffy on the roadmap for competitive advantage
This article highlights the importance of data and AI in gaining a competitive edge in the 2026 housing market, emphasizing that hosts who prioritize data-driven decisions and adapt to market changes will thrive. Hosts should focus on leveraging data and AI to make informed decisions about their STR business to capture market share.
Foreclosure Starts Fall 7.6% Nationally, But These Key Counties Show Rising Distress
Foreclosure starts are down nationally, but certain counties are seeing a rise in early-stage filings, which can indicate future pre-foreclosure opportunities. Hosts in Florida, California, Ohio, North Carolina, and Texas should monitor county-level data to anticipate potential distressed property sales and consider how this might affect their local markets.
DSCR mortgages are grabbing the spotlight. They’ll gain speed in 2026
DSCR (Debt-Service-Coverage Ratio) loans, which qualify borrowers for investment properties based on expected rental income, are gaining popularity, and are expected to continue growing. This trend is driven by a high-rate environment, the rise of nontraditional income, and the interest of institutional investors. Hosts who might be looking to invest in more properties should consider this new financing option.