Washington Scrutinizes Builder Buybacks as Home Starts Hit Five-Year Low
TheWkly Analysis
Could putting the kibosh on homebuilders’ stock buybacks help fix the nation’s affordability crisis? The White House certainly thinks so. Last week, Federal Housing Finance Agency Director Bill Pulte told The Wall Street Journal that the administration is “studying” how much homebuilders are spending on repurchasing their own shares and said the industry is deliberately keeping prices high. That, in turn, erodes consumer purchasing power by driving up housing costs, the largest living expense for average Americans. As of December, the median sales price for existing homes was $405,400, up 0.4% from last year and well above the $309,800 in 2020. “They’re making, in some cases, more money than they’ve ever made, and they’re buying back stock like never before,” Pulte said. Stock buybacks, which companies use to reward shareholders or when they see their stock as undervalued, have long come under scrutiny from policymakers. That hasn’t stopped builders: In fiscal 2025, D.R. Horton and Lennar forked over $4.3 billion and $1.7 billion, respectively, to buy their own stocks. PulteGroup, founded by Bill Pulte’s grandfather, spent $900 million on buybacks during the first nine months of 2025, and KB Home’s total repurchases for the year ended Nov. 30 added up to $538.5 million. In October, KB Home’s board of directors greenlit the repurchase of up to $1 billion of the company’s stock. And homebuilders’ stocks are surging. As of market close Friday, the iShares US Home Construction ETF was up 11% for the year — far above the S&P 500’s 1.2%. But there’s one key thing those homebuilders don’t appear to be doing as much of: building new homes. The latest data from the Census Bureau shows that housing starts in October fell 4.6% to an annual rate of 1.25 million, the lowest level since May 2020. National Association of Home Builders Chairman Buddy Hughes said in a December statement that “builders are contending with rising material and labor prices, as tariffs are having serious repercussions on construction costs.” While there’s a supply shortage, the same can’t be said for demand: Existing-home sales jumped 5.1% in December to a seasonally adjusted annual rate of 4.35 million, the strongest pace in nearly three years, according to the National Association of Realtors. Refinance demand surged 40% for the week ending Jan. 9, following a drop in mortgage rates after President Trump said he was instructing “representatives” to buy $200 billion in mortgage bonds to bring down housing costs. In the face of a growing affordability crisis — and Trump’s recent promise of “some of the most aggressive housing reform plans in American history” — Pulte told Barron’s last week that the administration is evaluating “incentivizing builders who are working constructively with us with appropriate pricing.” He also said officials are “looking at the builders who are maybe not working constructively with us and evaluating their pricing, as well.”
|
Key Entities
- • Federal Housing Finance Agency - U.S. agency whose director discussed scrutinizing homebuilder buybacks
- • Bill Pulte - FHFA director quoted about buybacks and pricing
- • White House - Administration described as studying builder buybacks as a lever on affordability
- • D.R. Horton - Homebuilder cited for large stock buybacks
- • Lennar - Homebuilder cited for large stock buybacks
- • PulteGroup - Homebuilder cited for buybacks and connected to Bill Pulte’s family
- • KB Home - Homebuilder cited for buybacks and board authorization
- • Census Bureau - Source of housing starts data cited in the story
- • National Association of Home Builders - Industry group cited on labor and materials pressures
- • National Association of Realtors - Group cited for existing-home sales figures
Bias Distribution
Multi-Perspective Analysis
Left-Leaning View
Not found
Centrist View
Focuses on buyback totals, housing supply data, and policy signals.
Right-Leaning View
Not found
Want to dive deeper?
We've prepared an in-depth analysis of this story with additional context and background.
Featuring Our Experts' Perspectives in an easy-to-read format.
Future Snapshot
See how this story could impact your life in the coming months
Exclusive Member Feature
Create a free account to access personalized Future Snapshots
Future Snapshots show you personalized visions of how insights from this story could positively impact your life in the next 6-12 months.
- Tailored to your life indicators
- Clear next steps and action items
- Save snapshots to your profile
Related Roadmaps
Explore step-by-step guides related to this story, designed to help you apply this knowledge in your life.
Loading roadmaps...
Please wait while we find relevant roadmaps for you.
Your Opinion
Should regulators discourage homebuilder stock buybacks?
Your feedback helps us improve our content.
Comments (0)
Add your comment
No comments yet. Be the first to share your thoughts!
Related Stories
CEOs, World Leaders Prep for Awkward Encounters at Davos
The World Economic Forum's annual meeting in Davos brings together CEOs, world leaders, and policymakers at a time of heightened geopolitical...
Trump announces new tariffs over Greenland rift
President Trump’s latest rhetoric on Greenland may lead the European Union to use its economic “bazooka” for the first time ever. At the very...
Canada agrees to cut 100% tariffs on Chinese EVs.
Canada will start by allowing up to 49,000 Chinese electric vehicles into the country at a 6.1% tariff rate, with the quota rising to 70,000 over...