The Short Version
- Materials for the same house rose 9.1% for builders starting five or fewer homes a year — 1.8% at 100-plus.
- The one figure in July's new home sales release that clears Census's own error band is inventory: houses for sale, +1.9%.
- Hovnanian's contracts per community fell to 9.4 from 9.8 — the second builder in a week to sell less per community.
- Fiber cement passed stucco in the Mountain division, at 42% of 2025 starts.
- Training a team beat handing it the tool — until the tool hit a job it couldn't do.
By the Numbers
30-Yr Fixed
6.66%
▲ 0.01 W/W · Aug 27
New Home Sales
607K
▼ 10.5% M/M · July
Median New Price
$393,800
▼ 0.9% Y/Y · July
Case-Shiller
+1.5%
▲ 0.3 pt vs May · June, Y/Y
This Week's Feature
Teach or Build: When to Train Your Team vs. Buy It Done
The question owners actually ask about AI isn't whether it works. It's where the money goes: do I teach my own people to use this, or do I pay somebody who already knows how?
Before either, size the prize. The St. Louis Fed's FRED Blog put a number on it on August 27: the share of work hours saved by generative AI rose from 1.6% to 2.2% between the third quarter of 2024 and the second quarter of 2026, while the share of employed adults using it for work rose from 28.2% to 39.2%. Call it roughly an hour a week on the Fed's measure, and carry the Fed's caveat with it: people report their own saved time, so the figure is "inherently approximate."
An hour a week per person is real. It is also the entire pot. Every training day, retainer and subscription has to pay itself back out of an hour a week, and a pitch whose arithmetic needs more is a pitch to ask for the working.
Which door you go through has actually been tested, properly, with a control group. A randomized trial of 758 consultants included an arm that got AI plus training materials — the teach-your-team condition, run as an experiment. Training won on quality across the tasks the tool could do, and lost on speed. On the one task it couldn't do, the trained group was hurt worse than the untrained one.
Keep reading (6 min)Voice of the Builder
Same house, 9.1% more in materials — unless you start a hundred a year.
The median builder paid 6.7% more for the materials in the same house over the past year, NAHB reported Monday from a question asked in early July. By builder size it stops being one number: 9.1% for builders who started five or fewer homes in 2025, 1.8% for builders with 100 or more — a 7.3-point spread on identical work.
NAHB offers three explanations, all in the may register — it did not test them. Larger builders may stockpile ahead of announced increases, hold longer-term contracts that lock current prices, or negotiate deferrals through supplier relationships.
What it means on your jobsite
All three are partly replicable at your size. Get a signed 90-day price hold on the framing package instead of a verbal quote. Buy out at permit rather than at start. And trade a single-supplier commitment on the three items that move most for locked pricing on them.
- Inflation is stuck and real spending is flat. Headline PCE held at 3.7% in July and core at 3.3%, where NAHB notes core has sat since the Iran conflict began. Spending rose 0.2%; adjusted for prices, flat. NAHB
- Two builders in a row sold less per community. Hovnanian's contracts per community fell 4.1%, to 9.4 from 9.8 in the quarter ended July 31, on 123 communities against 124 — reported Aug 20, two days after Toll Brothers ran 5.4 against 5.6. Community count is holding; sales per community is not. Hovnanian FQ3
- Purchase applications are 5% below last year, and the hole is at the entry level. Week ending Aug 21: MBA's purchase index ran 5% under the same week of 2025, pulled down on the week by a 7% drop in FHA applications. Refinances were 17% below a year ago. MBA's own rate printed 6.78% — an applications measure carrying 0.66 points, so it sits above the Freddie Mac offered rate in the strip. MPA on MBA's weekly survey
Bright Spots
- One number in July's sales release survives Census's own error test, and it isn't the sales number. New houses for sale rose to 488,000, +1.9% (±1.2%) — the only one of ten comparisons whose band excludes zero. The −10.5% sales drop that led the coverage prints as ±14.0%, Census's own asterisk on it. Plan the fall against the inventory figure. Census
- The top end is still transacting. New homes priced above $800,000 took 8% of July sales, up from 5% a year earlier — a share, not a median that moves with mix. NAHB
- Price erosion is slowing. Case-Shiller National rose 1.5% in June against 1.2% in May. S&P's Rebecca Kaufman: lower inflation and firmer nominal home price growth "helped slow that pace of erosion." S&P Cotality
Then again: Slowing is not stopping. June was the 13th consecutive month U.S. home values fell in real terms (S&P Cotality), and new-home supply is 9.6 months, the highest since January — 5.3 months counting existing homes, the highest since late 2014 (NAHB).
Hot Markets
| Metro | Case-Shiller Y/Y, June | Why it matters |
|---|---|---|
| Chicago | +6.9% | Strongest of the 20 cities, more than four times the national +1.5% |
| New York | +4.79% | The Northeast is the only region with new home sales up year to date, +8.8% (NAHB) |
| Cleveland | +4.13% | Redfin has it +7.5% on median price, four weeks to Aug 23 — two methods, one answer |
Case-Shiller is repeat-sales, not median price — the same house against its own last sale, so mix doesn't move it. Three-month moving average. S&P Cotality
Cooling: Houston, −1.5% on median sale price and −15.3% on pending sales, four weeks ending Aug 23 — backward- and forward-looking both negative. Bidding there this fall, price the carry of a slower sale into the schedule, not last spring's absorption. Redfin
Design Trends · New Construction
In 2025 starts, fiber cement took the Mountain division away from stucco.
Across single-family homes started in 2025, vinyl siding held 27.7% of the market, stucco 24.1%, fiber cement 22.6% and brick 16.8% — NAHB's read of the Census Survey of Construction, published July 20, 2026. The arc belongs to fiber cement, up almost 20 percentage points over 25 years, and two regional defaults changed hands: fiber cement reached 42% in the Mountain division, passing stucco for the first time in data back to 2000, and vinyl 39% in the East South Central, passing brick for the first time since 2020.
The spec change
If you build in the Mountain division and stucco is the standing default on your plan set, the market moved past you last year — same for brick in the East South Central. Neither needs a redesign: it's an elevation package and one supplier conversation.
AI on the Jobsite
Reconcile the selection sheet against the allowances before the client falls in love
Allowances get written early and materials don't wait: the same house cost the median builder 6.7% more over the past year (NAHB). An allowance written a year ago is short by that much before anyone picks a faucet.
Copy this prompt
Attached: my client's selection sheet as chosen, the contract allowance schedule, and current supplier pricing. Return three lists. (1) Every selection over its allowance, with the dollar delta and the allowance line it sits against. (2) Every allowance line with no selection yet, and the date the schedule needs that decision. (3) Every selection that conflicts with the spec book or plan set — a fixture that won't fit the rough-in, a finish not made in that size. Then one client-facing summary under 150 words: what's over, what's outstanding, what needs deciding this week. Do not price overages as change orders and do not substitute products. Triage only — flag ambiguity instead of guessing.
Time saved: Your arithmetic, not ours: count the selection lines on your current job, time yourself reconciling ten by hand, multiply.
JobTread Tip of the Week
One saved view of every quote priced before the cost increase
Voice of the Builder above is about pricing that has aged. A saved view puts every stale quote on one screen instead of one job at a time.
- Open Customer Orders and filter to proposals still unsigned.
- Add the date-created column and sort oldest first.
- Save it as a custom view named for the cutoff you actually care about — "Priced Before Last Catalog Update" — so next week it's one click.
- Walk it every Monday: anything priced before your last cost-catalog update gets re-priced or gets an escalation line before signature.
The Punch List
- New Residential Sales, July — Census/HUD. Next release Sept 24
- Case-Shiller home prices, June — S&P Cotality
- Materials cost by builder size — NAHB, Aug 24
- PCE inflation, July — NAHB, Aug 26
- New Residential Construction — Census/HUD. Starts release Sept 17
- Canadian lumber duties — NAHB. April's was a preliminary determination; final results still pending
Quitting Time
Why did the estimator and the schedule break up?
Unrealistic expectations on both sides.