D.R. Horton's stick-and-brick cost rose 1% as suppliers announced increases

What the week's housing news means for people who sell to builders.

D.R. Horton's stick-and-brick cost per square foot rose 1% from the prior quarter after falling 4% over its fiscal year, and Meritage said modest cost increases could reach its margins over the next several quarters. The same week, A. O. Smith, Carrier, and Lennox described price increases for December and 2027, and Builders FirstSource said any real price reset with builders comes at year-end. The volume underneath is still falling: D.R. Horton started 10% fewer homes than a year earlier and guided its next quarter's closings about 10% lower. When builders bring margin complaints to their suppliers, a division's complaint about price and the corporate office's complaint about margin may not be about the same number.

D.R. Horton started 10% fewer homes and guided next quarter's closings about 10% lower

D.R. Horton expects stick-and-brick costs to be flat to slightly up next quarter, and its presentation lists about 20 exclusive national supplier agreements covering flooring, paint, door hardware, and more. (D.R. Horton Q4 release, D.R. Horton Q4 presentation, D.R. Horton Q4 call)

Meritage started 12% more homes than a year ago and is cutting starts this quarter

Meritage's CFO said its procurement team "has successfully pushed back on price increases to date" but that "tariffs, along with higher oil-based materials and transportation costs, are increasingly pressuring the supply chain," and the CEO said it is "adjusting our starts in Q4." Meritage gave no fourth-quarter guidance. (Meritage Q3 release, Meritage Q3 call)

Century cut its full-year delivery guidance and LGI narrowed its closings range

Century said its direct construction costs fell from the prior quarter and pointed to "the impact of increased mortgage rates on our orders and deliveries." LGI said its revised outlook "reflects slower sales activity in the quarter as affordability pressures continued to weigh on demand." (Century Q3 release, LGI Q3 release)

Dream Finders set out a $100 million savings target for Beazer

Dream Finders' first report since closing Beazer on Oct. 20 covers a quarter before the deal, with gross margin at 14.9% from 17.5%; it said it has a "detailed integration plan" for "the $100 million cost savings we outlined for Beazer" and will end land deals that do not meet its return thresholds. (Dream Finders Q3 release)

Green Brick's incentives reached 11% of new orders

Green Brick said it continues "to respond to deteriorating market conditions to maintain sales pace." (Green Brick Q3 release)

Builders FirstSource's single-family sales fell 6.2% as it bought a New Mexico dealer

Builders FirstSource said there is "extra capacity that we are still digesting," and this week it said it had acquired L&P Building Supply of Las Cruces, N.M., which supplies lumber, building materials, trusses, and wall panels in southern New Mexico and El Paso. (Builders FirstSource Q3 release, Builders FirstSource Q3 call, Building Products Digest)

Lennox's residential margin fell 490 basis points as it works to win back new construction

Chief executive Alok Maskara said "we have talked in the past about our share loss in RNC," said that loss will be lapping itself within the next quarter or so, and said Lennox is working with national accounts and new-construction customers to lower their "joint cost to serve." (Lennox Q3 release, Lennox Q3 call)

West Fraser is indefinitely curtailing an OSB mill and a lumber mill

West Fraser is curtailing its Huguley OSB mill in Lanett, Ala. (about 500 million square feet a year, 3/8-inch basis) and its Leola, Ark. mill (225 million board feet of southern yellow pine) in the fourth quarter, citing "continued weakness in demand for wood products used in new home construction and repair and renovation applications." (West Fraser Q3 release)

Spending on new single-family construction was flat in September

Census released the September estimates on Nov. 2. (Census)

The Fed held rates and the 30-year mortgage rate eased to 7.24%

The Federal Reserve held its target range at 3.75% to 4.00% on Oct. 28, with two members dissenting in favor of a hike, and Freddie Mac's 30-year average fell to 7.24% on Oct. 29 from 7.32%, its second weekly decline from 7.40%. (Federal Reserve, Freddie Mac)

An executive order set a 180-day review of factory-built housing

The order, published Oct. 28, creates a HUD and FHFA task force with USDA, Commerce, and VA to recommend within 180 days how to support factory-built and modular housing and whether to tie federal grants to standardized permitting. (Federal Register)

A. O. Smith said on its Oct. 29 call that it had announced an additional increase on most of its water heaters, effective in December, citing steel and freight costs.

ACHR News publishes a full monthly HVAC price-increase roundup; link in Sources.

This week's reports set up the 2027 price conversation from both sides. D.R. Horton's stick-and-brick cost is rising again and Meritage expects modest increases, while A. O. Smith, Carrier, and Lennox described increases for December and 2027; Carrier said its announced increases in the Americas run "up to 10%" after it realized low-single-digit price this year against the mid-single digits it expected. Builders FirstSource's chief executive said "the real reset, if there is any," with builders happens "at year-end and into the beginning of the year," in negotiations that are "multilateral," and its outlook assumes it gives up "a little" price. (Carrier Q3 call, Builders FirstSource Q3 call)

D.R. Horton and Meritage both name supplier rebates in their annual reports, and Meritage says it negotiates them "on behalf of our subcontractors," but neither filing says whether its divisions see those dollars on the house. A division's price complaint is likely about the installer's invoice, turnkey or not, and through two-step distribution a manufacturer can have little say over that bid. So a division can be unhappy with price on its local P&L while the corporate customer has already been made whole through rebates or other incentives. (D.R. Horton 10-K, Meritage 10-K)

How much of an increase a supplier can carry likely depends on its unit of measure, its margin, how much of its business sells into replacement, and how committed it is to new construction. Branded, visible products with a large add-on replacement business, such as water heaters, HVAC, and roofing, may be able to carry more of an increase in other channels, and an announced figure may be a blended channel number that some builder agreements could cap or delay. Lennox, after losing share in new construction, is moving to a 2027 increase it says works better for national accounts, and Builders FirstSource, with single-family sales down 6.2%, expects to give some price back.

Owens Corning reports Wednesday, Nov. 4, and JELD-WEN reports after today's close; Dream Finders' early tender deadline on its exchange offer for Beazer's notes is Nov. 4, and comments on Treasury's institutional-investor purchase rule close Nov. 23.

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Compiled from publicly available reporting as of November 3, 2026. Figures are as reported by the cited sources and subject to revision. Starts & Specs is provided for general informational purposes only. Nothing in it is financial, investment, legal, or business advice, or a recommendation to take or refrain from any action; any analysis reflects the author's reading of public information and may be wrong. Readers should independently verify figures and make their own decisions.