With a 3rd or so of the general public homebuilders’ first 2026 earnings cycle full, the theme and variations – steering misses, land impairments, margin compressions, even a net-negative-earnings or two, with the uncommon upside shock – affirm it’s some of the grinding, grueling promoting environments in additional than a decade.
Step again from the fray for a second, and it’s a second to understand one thing about technique – navy, sports activities, enterprise, or life.
It must be ready, adept, and canny at each offense and protection. Even to the extent that technique generally takes a again seat to tactical responsiveness, agility, and nimbleness.
Now, on the danger of by no means letting the information of a narrative get within the danger of a well timed sports activities reference, in sports activities, it’s mentioned of some successful groups, “the very best offense is a superb protection.” Generally, controlling the ball on offense wears down the rivals’ protection. As the times depend right down to Tremendous Bowl LX at Levi’s Stadium in Santa Clara, Calif. – symbolically kicking off homebuilders’ vital spring promoting season – homebuilding’s strategic and aggressive metaphors align.
For a enterprise case, Century Communities’ Q4 and full-year 2025 outcomes are a powerful start line. We are saying this as a result of what the Century staff placed on show is just not “progress.”
It’s management.
Management of tempo. Management of stock publicity. Management of development cycle time. Management of direct prices. Management of mounted overhead. Management of land danger. Management of capital allocation. Management of the Century Communities enterprise future.
That’s what “enjoying protection” seems like for a high-volume builder when shoppers reside in a relentless state of family angst — charges stay excessive, value factors stay elevated, and there’s worry that dwelling costs might soften sufficient to punish anybody who buys on the fallacious second.
On this market, protection doesn’t imply laying low. It means embracing contact to maneuver the ball.
And Century’s This autumn “end-of-year dash” is a textbook instance of the industry-wide protection technique: purchase the sale to shed the fallacious stock, whereas tightening operations so the enterprise is able to speed up when demand bounces again.
Protection transfer #1: “purchase gross sales” to shut out older, higher-cost communities
Century’s This autumn cadence wasn’t delicate. Century Communities Executive Chair Dale Francescon said deliveries benefited from the corporate’s deal with “growing gross sales tempo, significantly in older, higher-cost communities and communities in closeout, by means of the continued use of value and financing incentives,” which helped drive This autumn internet orders to an organization report of two,702.
CEO and President Rob Francescon put math across the lever: incentives on closed properties averaged roughly 1,300 foundation factors in This autumn, up 200 bps, pushed by the tempo technique and the aggressive year-end atmosphere. He additionally highlighted the important thing strategic level: incentives have ranged from 600 bps to 1,300 bps for the reason that begin of 2024, which he described as “ample leverage” to tug again on if market circumstances enhance.
That’s the defensive play: settle for margin ache to remove IRR miscalculations embedded in older neighborhood underwriting, and to cut back the drag from specs that don’t pencil in at the moment’s actuality.
Chief Monetary Officer Scott Dixon underscored how the motivation lever exhibits up downstream: Century’s This autumn common gross sales value of $367,000 decreased 5% sequentially, and he mentioned the lower was “largely pushed by elevated incentive ranges.”
That is what “shopping for gross sales” actually is. It’s not simply discounting. It’s actively changing danger into money, shortening the time capital sits idle, and stopping outdated assumptions from impairing progress over the following 12 months.
Protection transfer #2: flip the development clock right into a aggressive weapon
The crowning operational achievement in Century’s 12 months wasn’t a headline EPS beat. It was this: cycle occasions right down to a report 114 calendar days, and direct development prices down by a median of $13,000 per begin.
These two numbers usually are not information slop. They’re successfully strategic moats.
In a worse-than-expected working and promoting context, cycle time is a builder’s model of defensive subject place: it reduces publicity to altering demand, charges, incentives, and competitors. It additionally reduces the builder’s must “over-spec” the longer term.
And Century instantly linked quicker builds to decreased stock danger: Dale Francescon mentioned quicker construct occasions “permit us to cut back our completed spec stock by almost 30%.”
Now layer in what the investor deck makes express: Century has leaned right into a spec-driven machine — 99% of whole firm dwelling deliveries are spec builds, and Century Full’s spec combine is 100%.
That issues as a result of spec dominance is a double-edged sword in a weak market—except the builder can construct quick, value exactly, and finance creatively. Century is clearly attempting to make spec properties much less of a balance-sheet danger and extra of a throughput benefit, emphasizing that spec development “streamlines the development course of… leading to extra environment friendly construct occasions” and helps “faster stock turns and improved ROE.”
Protection right here is about narrowing the window throughout which something can go fallacious.
Protection transfer #3: affordability with product plus financing, not hope
Century’s model place sits within the a part of the market the place “pent-up demand” is obvious — however affordability math nonetheless guidelines the day.
The investor deck attracts a transparent line round the place Century believes it performs, i.e., who the group is:
Century Communities’ 10,387 new properties delivered in 2025 had a median gross sales value of $378,000, under the nationwide common and median value proven on the slide, with Century Full ASP of $261,600.
On the identical slide, Century provides one other key information level: 94% of whole firm dwelling deliveries are priced under FHA limits (primarily based on This autumn 2025 deliveries).
Then there’s the financing layer — the place Century’s vertical integration is functioning like a defensive defend towards fee shock. Dixon reported an 84% mortgage seize fee (quarterly and annual information) and famous ARMs rose to “roughly 25%” of originations in This autumn, with receptivity “growing.”
That is protection as a combined-arms tactic: value/incentive, product, and mortgage construction. It’s also, in follow, how builders proceed to soak up mounted subject prices when visitors is fragile.
Protection transfer #4: derisk the land ebook with out ceding the flexibility to develop
Probably the most underappreciated hazard in a chronic demand stall is just not margins. It’s land. Notably, “lengthy on land.”
Century’s message is constant: hold a progress runway, however don’t let the land pipeline dictate habits.
Rob Francescon described the corporate’s “conventional land possibility technique” as “versatile and reduces danger,” noting the flexibleness “allowed us to regulate phrases in lots of instances and obtain decrease costs in some instances over the course of 2025,” and he identified the capital-at-risk actuality: 26,000 possibility tons secured by nonrefundable deposits totaling simply $74 million.
The investor deck reinforces the expansion math whereas emphasizing the chance posture: Century highlights 60,916 tons (as of December 31, 2025), with 57% owned and 43% managed. It additionally asserts that “current lot provide and neighborhood depend [are] supportive of 10% supply progress in 2026 and 2027, assuming improved market circumstances.”
That’s the protection/offense bridge: maintain the choice to speed up with out carrying the complete draw back of a land-heavy posture.
Protection now, offense later — however solely In the event that they management the clock
Century is doing what a big share of high-volume manufacturing builders are doing proper now: Shopping for gross sales to clear stock and closeout communities, plus
- Compressing cycle time to cut back danger home windows and improve responsiveness
- Renegotiating direct prices and overhead to claw again profitability
- Holding land flexibility so the pipeline doesn’t turn into a lure
- Utilizing finance instruments (together with greater ARM combine) to resolve affordability equations in actual time
And so they’re doing it whereas defending the steadiness sheet: the deck highlights liquidity of $1.1 billion and internet homebuilding debt-to-capital of 25.9%.
Right here’s the twist on the sports activities adage: for builders in 2025, the very best offense isn’t a great protection. It’s a protection that lowers the price of your subsequent offensive drive. Century’s report cycle time, value reductions, spec-machine self-discipline, and land optionality are all designed to do one factor: Be prepared to show demand into deliveries rapidly — with out having to re-load danger first.
And it’s the lead-in to the larger query the following few quarters will reply for Century—and for the broader sector:
When the market lastly loosens—whether or not it’s charges, confidence, or coverage help—which builders have constructed the operational talent set to maneuver from protection to offense with out giving again the positive factors they made preventing by means of the mud?
