Could curbing share buybacks by homebuilders help solve the country’s affordability crisis? The White House certainly thinks so.
Last week, Federal Housing Finance Agency Director Bill Pulte said The Wall Street Journal that the administration is “studying” how much home builders spend on buybacks of their own stock and said the industry deliberately keeps prices high. This, in turn, erodes consumers’ purchasing power by raising housing costs, the largest living expense for the average American. In December, the median sales price of existing homes was $405,400, up 0.4% from last year and well above the $309,800 in 2020.
SUBSCRIBE: Receive more from our free The Daily Upside newsletter. READ ALSO: Europe prepares its ‘Bazooka’ defense of Greenland and Netflix earnings offer investors insight beyond the battle for Warner Bros.
“In some cases, they’re making more money than they’ve ever made before and they’re buying back stock like never before,” Pulte said. Share buybacks, which companies use to reward shareholders or when they believe their shares are undervalued, have long come under scrutiny by authorities. That hasn’t stopped builders: In fiscal 2025, DR Horton and Lennar shelled out more than $4.3 billion and $1.7 billion, respectively, to buy their own shares. PulteGroup, founded by Bill Pulte’s grandfather, spent $900 million on buybacks during the first nine months of 2025, and KB Home’s total buybacks for the year ended Nov. 30 totaled $538.5 million. In October, KB Home’s board of directors gave the green light to the buyback of up to $1 billion in company stock.
And homebuilder stocks are rising. As of Friday’s market close, the iShares US Home Construction ETF was up 11% for the year, well above the S&P 500’s 1.2%.
But there’s one key thing those builders don’t seem to be doing as much: building new homes. The latest data from the Census Bureau shows that home construction 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 President Buddy Hughes said in a December statement that “builders are grappling with rising prices for materials and labor as tariffs are having serious impacts on construction costs.” The organization did not immediately comment on Friday’s buyback scrutiny.
While there is a shortage of supply, the same cannot be said for demand:
-
Existing home sales rose 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.
-
Demand for refinancing increased 40% during the week ending January 9, following a drop in mortgage rates after President Trump said he was directing “representatives” to buy $200 billion in mortgage bonds to reduce housing costs.