Forbes has uncovered a dozen new billionaire builders whose fortunes have seen a significant increase due to the high prices and high interest rates in the homebuilding industry. One such billionaire is Tom Bradbury, the founder of Smith Douglas Homes, who has built 304 communities in five states since 2008, with sales reaching $765 million in 2023. Bradbury’s wealth has led to him becoming a billionaire as shares of Smith Douglas have increased by 56% since going public.
Despite the challenges facing homebuyers, such as spiking mortgage rates and soaring home prices, the shortage of housing units in the US has made it a great time to be a homebuilder. The S&P index of builders has increased by 57% in the past 12 months, with companies like D.R. Horton and Toll Brothers seeing even higher stock increases. This building boom has led to a surge in billionaires in the homebuilding industry, including Kathy Britton of Perry Homes and Itzhak Ezratti of GL Homes.
The homebuilding market shows no signs of slowing down, with calls for an increase in new home production from political figures like Kamala Harris and Donald Trump. Builders have the advantage of being able to offer competitive rates and sales incentives to cash-strapped buyers, making the environment solid and performing better than expected by economists. Efficient systems like the SMART build system at Smith Douglas Homes have decreased build times, allowing for faster and more affordable construction.
Builders like Patrick Zalupski of Dream Finders Homes have seen success by offering more affordable housing options and cutting higher-end features. Even luxury builders like Lennar and Toll Brothers have begun offering smaller, more affordable homes to cater to demand. The market slowdown since the pandemic has made building more attractive for buyers, with existing home prices remaining high and mortgage rates spiking.
Many of the larger builders have the advantage of being able to offer better mortgage rates through affiliate lenders, giving buyers more incentive to purchase new homes. The homebuilder boom is expected to continue for the foreseeable future, with a shortage of housing units predicted for the next five years. The National Association of Realtors predicts a steady increase in new housing starts and sales, making it a lucrative time for billionaire builders in the industry.
Overall, the housing shortage in the US has led to a rise in billionaire builders who have capitalized on high prices and interest rates to increase their wealth. Builders like Tom Bradbury, Patrick Zalupski, and Kathy Britton have found success in providing affordable housing options to buyers in a challenging market. As the demand for new homes continues to rise, these builders are likely to see continued success and profits in the coming years.
