Fewer counterparties, and a widening gap in who can absorb an increase

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

New home sales fell to a seasonally adjusted annual rate of 607,000 in July, Census reported this morning, and months' supply rose to 9.6 from a revised 8.5 in June. Three reports landed inside the week, and each showed a different response to the same cost pressure: Toll Brothers grew community count 12% year over year and reaffirmed its guidance, Hovnanian cut finished unsold homes by 40%, and Lowe's trimmed every line of its full-year outlook to the bottom of the prior range. Running underneath them was a steadier story about the channel itself. Webb Analytics counts 70 acquisitions by 52 buyers across 788 construction-supply locations so far this year, and H.B. Fuller's board rejected a $1.1 billion offer for one of its segments on the stated grounds that the segment shares plants with the rest of the company. What is consolidating is not only volume. It is the ability to negotiate a price increase and then reshape it.

New home sales fell to a 607,000 annual rate in July, and months' supply reached 9.6

Sales of new single-family homes ran at a seasonally adjusted annual rate of 607,000, down 10.5% from a revised June figure of 678,000 and 6.3% below July 2025, though neither change clears its 90% confidence interval. Homes offered for sale but not yet started rose to 115,000 from 106,000 in June. (Census/HUD, released August 25)

The Section 338 duties on Canada took effect August 22 after a three-day suspension

An additional 50% ad valorem duty on roughly $20 billion of Canadian goods was suspended on August 19 with under two hours left before it was due, then imposed at 12:01 a.m. on August 22 when negotiations ended without an agreement. Per the Kitchen Cabinet Manufacturers Association and the Decorative Hardwoods Association, Annex I covers nearly every subheading of HTS 4412 along with softwood veneer at 4408.10.01, while goods already dutiable under Section 232 and Canadian-origin cabinets sit outside it. Canadian hardwood plywood carried $197.2 million of customs value in 2025. (Federal Register; KCMA and DHA)

Toll Brothers ended the quarter with 471 selling communities against 420 a year earlier

Deliveries fell 10% to 2,662 homes and home sales gross margin came in at 23.9% against 25.6% a year ago, while net signed contracts rose 5% to 2,508. The company reaffirmed full-year guidance, guided to 480 to 490 communities at year end, and said its existing land position supports similar growth in fiscal 2027. (Toll Brothers FQ3, reported August 18)

Hovnanian cut finished unsold homes to 194, down 40% from a year ago

Total quick move-in homes fell 19.3% to 820, or 6.7 per community, and finished quick move-ins fell 39.9% to 194, which the company attributed to matching starts to its sales pace. Community count held at 123 against 124, controlled lots fell to 34,373 from 40,246, and 87% of lots were optioned, the highest share in company history. Homebuilding gross margin before interest and land charges was 14.6% against 17.3%. (Hovnanian FQ3, reported August 20)

Lowe's trimmed every line of its full-year outlook to the bottom of the prior range

Second-quarter sales rose 8.3% to $26.0 billion and comparable sales rose 0.2%, which the company attributed to Pro, online, and home services against continued weakness in discretionary DIY. Full-year total sales guidance moved to $92.0 billion from a range of $92.0 billion to $94.0 billion, comparable sales to flat from flat-to-up-2%, and adjusted diluted earnings to about $12.25 from $12.25 to $12.75. The quarter carried $96 million of pre-tax amortization from the Foundation Building Materials and Artisan Design Group acquisitions. (Lowe's Q2, reported August 19)

H.B. Fuller's board rejected Ancora's offer for its Building Adhesive Solutions segment

The board unanimously rejected the unsolicited, non-binding cash proposal of $1.1 billion to $1.2 billion received August 12, stating that it materially undervalues the business and that a carve-out would create material operating inefficiencies and significant dis-synergies because the segment shares manufacturing across more than 30 plants. Ancora reaffirmed its offer the same day. This remains a proposal rather than an agreed transaction. (H.B. Fuller and Ancora releases, August 24)

Beazer has still not filed a preliminary merger proxy, three weeks after signing

A search of SEC full-text filings returns no PREM14A, DEFM14A, or PRER14A for Beazer Homes in August. The company filed a DEFA14A on August 21 carrying a customer email stating that it will continue to operate as a separate, independent company and that it intends to file a preliminary proxy statement. The Dream Finders merger agreement, signed August 6, calls for the proxy within 20 business days, which places the outside date in early September. (SEC EDGAR)

NAHB put small builders' material cost increase at 9.1% and large builders' at 1.8%

Drawing on July Housing Market Index survey questions published August 24, the median annual material price increase was 6.7% across all builders, running from 9.1% for builders who started five or fewer homes in 2025 down to 1.8% for builders with 100 or more starts. NAHB attributed the gap to stockpiling ahead of announced increases, longer-term supplier contracts, and negotiated deferrals. (NAHB Eye on Housing, August 24)

Webb Analytics counted 70 acquisitions by 52 buyers covering 788 construction supply locations through August 5, against a deal count roughly level with 2025 and a location count down about 40%. Last year was the megadeal year; this one is running at higher frequency and smaller increments, which reduces the number of counterparties more slowly and more steadily. Serial acquirers do most of the work. Ferguson has published eight acquisitions year to date carrying about $1.4 billion of annualized revenue, GMS lists five on its own newsroom, and Installed Building Products has acquired roughly $59 million of revenue against a stated $100 million target for the year. Webb's Construction Supply 150 shows what it does to the rest of the field: companies that added locations grew 2.1% while those that did not shrank 1.9%, and excluding Home Depot and Lowe's, the remaining 148 shrank 1.2%.

The buyers on the other side of those counters are running cost programs. Zelman put aggregate second-quarter gross margin across nine public builders at roughly 20.3%, down 210 basis points year over year, and recorded per-square-foot direct cost declines of 5% at D.R. Horton, 5% at PulteGroup, nearly 6% at Meritage, and 7% at Lennar. PulteGroup's chief executive described the method plainly on the July call, saying procurement teams review the cost structure "identifying places where we were arguably paying more than the market warrants. That's where we go after." The same logic runs through distribution: Boise Cascade became James Hardie's sole national distributor effective July 31 and is transitioning away from carrying competing siding, trim, and exterior moulding, which removes brands from a line card by contract rather than by performance.

What that combination changes is less obvious than a count of deals, because a price increase is rarely a single event that lands on a home's cost. A manufacturer with standing relationships at a large builder negotiates the pass-through, then reshapes what the increase actually costs the account on the back end, through rebates or other builder-beneficial terms that absorb part of it without absorbing all of it. That is a capability rather than a size, and it rests on three things at once: relationship depth at the account, margin wide enough to fund the give-back, and the administrative machinery to run it. A smaller manufacturer, distributor, or installer facing the same duty, the same resin increase, and the same freight surcharge may hold none of the three, and would then be choosing between carrying the cost and losing the position. So the increase does not land evenly across suppliers, and each transaction on Webb's list likely moves another set of accounts to the side of that gap that can run the play.

The pattern is uneven by category, and the exception is worth holding onto. Watsco's second-quarter release describes a North American HVAC market that still holds more than 2,100 distributors. Where the gap does widen, it tends to become visible at a specific moment rather than gradually, at the point where a combined organization reconciles two inherited line cards and two vendor programs against one another.

The Kansas City Fed's economic policy symposium runs August 27 to 29 in Jackson Hole on the theme of financial innovation and payments, three weeks ahead of the September FOMC meeting.

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Compiled from publicly available reporting as of August 25, 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.