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Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter. Theres no doubt about it: Housing market softening across the Sunbeltthe epicenter of U.S. homebuildinghas caused homebuilders to lose pricing power over the past year. Amid the additional margin compression, some giant homebuilders are adjusting their strategies. Lennar is finally easing up a little on its market share, taking volume-over-margin strategy, while KB Homea homebuilder ranked No. 526 on the Fortune 1000said on December 18 that it plans to lean even harder into built-to-order (more on that below). At the end of last week, KB Home posted its Q4 2025 earningsthe three months ending November 30. During its earnings call, it underscored just how tricky the current housing market remains, even for builders that have avoided the most aggressive incentive wars and speculative inventory strategies. In todays article, ResiClub highlights seven key takeaways from KB Homes latest earnings. 1. KB Homes margins compress to the lowest Q4 level since 2016 During the Pandemic Housing Boom, many publicly traded homebuilders achieved record profit margins as home prices soared and buyer demand ran red-hot. Ever since the national housing demand boom fizzled out in the summer of 2022, many large homebuilders have reduced margin and made affordability/pricing adjustments where and when needed to maintain their sales pace or prevent a bigger sales pullback. That includes KB Home, which reported a housing gross profit margin of 17% in Q4 2025down from a Q4 cycle peak of 24.1% in Q4 2021. Its margin has now compressed to its lowest Q4 level since Q4 2016. As KB Home CFO Robert Dillard said on the company’s December 18, 2025 earnings call: Housing gross profit margin was 17%, and adjusted housing gross profit margin, which excluded $13.7 million of inventory-related charges, was 17.8%. Adjusted housing gross profit margin was 310 basis points lower due to pricing pressure, negative operating leverage, higher relative land costs, regional mix, and product mix, which was pronounced due to the age and price of incremental volume versus guidance. 2. KB Homes average selling price is down 8.8% from its 2022 peak Unlike many giant homebuilders such as Lennarwhich has preferred to pull the mortgage rate buydown lever when making affordability adjustments this cycleKB Home has chosen to rely more on outright price cuts. [Back in summer 2023, KB Home CEO Jeffrey Mezger told me that these price cuts would be their strategy if any of their regional housing markets weakened further.] In Q4 2025, KB Homes average selling price ($465,600) was 7.1% below Q4 2024 ($501,000) and 8.8% below its cycle peak in Q4 2022 ($510,400). While part of this decline is due to mix shift, KB Home has previously acknowledged cutting home prices over the past 18 months in markets such as Austin and San Antonio, as well as in Orlando and Jacksonville, Florida. Average selling price declined 7% to $466,000 due to regional and product mix and general market conditions,” Dillard said on the earnings call. 3. KB Homes margin defense plan: leaning harder into Built-to-Order KB Home is making no secret of its goal: Increase built-to-order deliveries as a share of business to 70% or more of total volume, up from 57% in Q4 2025. The reason is simplebuilt-to-order margins are materially higher for KB Home. Built-to-order homes tend to generate higher margins because theyre sold before construction begins, reducing inventory carrying costs. Buyers also tend to select higher-margin upgrades and options, which lifts gross profit per home. KB Home COO Robert McGibney said on the company’s December 18 earnings call: While we always have some inventory homes available for those buyers that need a quicker move-in date, the superior margins we generate on built-to-order homes will allow us to realize greater value from our communities. Our gross margins on built-to-order homes are trending 3 percentage points to 5 percentage points higher than on inventory sales, and we began to see a shift toward more built-to-order sales during November, an encouraging trend that has continued into December. As we remain focused on selling our built-to-order homes and these sales become deliveries over the course of fiscal 2026, we expect to achieve a favorable trajectory in our gross margins. Were very focused on getting back to at least a 70/30 [built-to-order] ratio, and we see a great opportunity to drive that change with the new communities coming in the spring. KB Home executives believe that by leaning more into built-to-order, itll help see their margins bottom in Q1 2026. KB Home CEO Jeffrey Mezger said on the earnings call: We’ve already shared that the first quarter margins are the low-water mark, and we expect improvement quarter-over-quarter as the year progresses from there. And it’s a combination of better leverage as we grow revenue back and better margins as our community mix rotates around. 4. KB Homes home sales are down 10% year over year KB Homes net new orders by Q4 Q4 2018 > 2,013 Q4 2019 > 2,777 Q4 2020 > 3,937 Q4 2021 > 3,529 Q4 2022 > 692 (mortgage rate shockpause before pricing recalibration/easing backlog) Q4 2023 > 1,909 Q4 2024 > 2,688 Q4 2025 > 2,414 We were disciplined in not taking overly aggressive steps to capture sales during the seasonally slower fourth quarter,” Mezger said on the earnings call. “By doing so, we believe we are positioned to achieve better margins on these sales in our 2026 first quarter than we would otherwise have produced. 5. KB Homes margin compression would be greater right now if not for modest declines in construction and material costs this year This margin pressure was again partially offset by lower direct construction costs per unit,” Dillard said on the earnings call. “It’s notable that average costs per unit declined in the quarter as direct construction costs and material costs declined more than lot costs increased. 6. KB Homes cancellation rate remains stable 7. Faster build times KB Home has reduced build times by roughly 20% year over year, hitting its company-wide target of 120 days or better for built-to-order homes. Some divisions are now averaging under 100 days. Where does KB Home actually build? Pulling data from the ResiClub Terminalwhere we keep footprint data for Americas 21 largest homebuilderswe made the map below.
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E-Commerce
Apple and Google would like to see your identification, please. With the formers Digital ID launch last week, both companies now let you scan a digital version of your passport at more than 250 Transportation Security Administration checkpoints, using an iPhone or Android phone. A growing number of U.S. states already support digital drivers licenses for the same purpose. But the push for these digital IDs isnt merely about airport security (which still requires you to carry a physical license or passport anyway). Its really part of a broader effort to verify who you are online, one that can finally start in earnest with passport-based digital IDs that are available nationwide. This story first appeared in Advisorator, Jareds weekly tech advice newsletter. Sign up to get more insights every Tuesday. How it works From left: Digital IDs in Apple Wallet and Google Wallet Apple and Google have similar processes for digitizing a license or passport: Open the Apple Wallet (iPhone) or Google Wallet (Android) app. Hit the + button and select the ID option. Scan your IDs main page with your phones camera. Scan the back of your license, or place your phone on top of your passports barcode page to scan the embedded RFID chip. Submit a photo of your face. Capture one or more short videos of your face performing some kind of movement. (This is presumably to prevent someone from digitizing your ID without permission.) After a brief verification period, youll be able to access your ID through your phones digital wallet screen, the same place youd use Apple Pay or Google Pay. While digital passports are available nationwide, support for digital drivers licenses or state IDs varies. Apple and Google currently let you digitize a license from Arizona, Arkansas, California, Colorado, Georgia, Iowa, Maryland, Montana, New Mexico, North Dakota, and Puerto Rico. Apples system also works in Hawaii and Ohio. A smaller number of states maintain their own digital ID apps, either in addition to or instead of Apples and Googles versions, as listed on the TSA website. Scanning a license or passport doesnt mean you can leave the print version at home. The TSA may still want to see the real thing, and passport control agencies wont accept the digital version when you cross the border. Moreover, digital ID support will be spotty outside of airports. While some states have been encouraging bars, restaurants, and other businesses to accept digital IDs, the merchant needs a phone or other identity-reader hardware for that. Much like in the early days of Apple Pay and Google Pay, trying to use your digital ID probably wont be worth the potential weird looks and awkwardness. So whats the point? Apple and Google both have bigger plans for digital IDs beyond just a slightly more seamless TSA process. Apples Digital ID setup page, for instance, says itll eventually work while booking flights or hotels and opening new online accounts. Google is more specific, saying its digital ID will let you recover an Amazon account if youre locked out, log into health portals such as CVS Health and Epics MyChart, and verify your profile with companies like Uber. Some states that have enacted age verification laws for porn sites have started accepting digital IDs as well. Therein lies the true endgame with these digital IDs: The point isnt really to replace physical IDs in the real world, but to verify your identity in the digital one. You can easily imagine a future in which a digital passport lives alongside or even replaces traditional passwords as a way to prove who you are online, with a verification process that feels a lot like checking out with Apple Pay. This obviously introduces some new concerns. The convenience of digital IDs could also become an excuse to gate off large swaths of the internet, so you might need ID to visit a local brewerys website, rent an R-rated digital movie, or access sites with social features of any kind. And while Apple and Google tout the ability to keep your personal details privatefor instance, by sharing just your age with a website without revealing your name or addressthat assumes the companies asking for your ID wont request or store more details than they need. Combined with broader use of digital IDs, this could make it a lot harder to browse the internet anonymously. A lot of this is still theoretical, but it seems to be the future were headed toward. So be aware of what Apple and Google are really asking for when they encourage you to create a digital ID. In the long run its about a lot more than getting through the airport. This story first appeared in Advisorator, Jareds weekly tech advice newsletter. Sign up to get more insights every Tuesday.
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E-Commerce
Somewhere between endless meetings and half-finished projects, we all went looking for better ways to get things done this year. These are the 2025 titles that helped people stay organized, focused, and finally finish what they started. Learn something new every day with Book Bites, 15-minute audio summaries of the latest and greatest nonfiction. Get started by downloading the Next Big Idea app today! Move. Think. Rest.: Redefining Productivity & Our Relationship With Time By Natalie Nixon A creativity whisperer to the C-Suite keynote speaker teaches how to harness the power of everyday activities to stress less and be more productive. Listen to our Book Bite summary, read by author Natalie Nixon, in the Next Big Idea app or view on Amazon. Mastery: Why Deeper Learning Is Essential in an Age of Distraction By Tony Wagner and Ulrik Juul Christensen In a world where AI can deliver information faster and more accurately than any human, what matters most are the uniquely human skills of critical thinking, communication, creativity, collaboration, and character. This is why we need to replace our outdated, time-based education model with a mastery-based approach. Listen to our Book Bite summary, read by coauthors Tony Wagner and Ulrik Juul Christensen, in the Next Big Idea app or view on Amazon. Your Hidden Genius: The Science-Backed Strategy to Uncovering and Harnessing Your Innate Talents By Betsy Wills and Alex Ellison Traditional career advice places too much emphasis on skills and intereststwo things that change over time. Aptitudes are the permanent, reliable guide to how every person can uniquely flourish, thrive, and achieve their potential. Listen to our Book Bite summary, read by coauthor Alex Ellison, in the Next Big Idea app or view on Amazon. Dear Writer: Pep Talks & Practical Advice for the Creative Life By Maggie Smith We are all creative beings because making your life is the ultimate creative act. For those who choose to tune their senses as artists, there are ten key principles to improving your craft. Listen to our Book Bite summary, read by author Maggie Smith, in the Next Big Idea app or view on Amazon. Unforgettable Presence: Get Seen, Gain Influence, and Catapult Your Career By Lorraine K. Lee You can be an incredibly hard worker who delivers quality results time and again, but still get overlooked for that big promotion. The true accelerator of ambitious goals is an unforgettable presence. Listen to our Book Bite summary, read by author Lorraine K. Lee, in the Next Big Idea app or view on Amazon. Who Better Than You?: The Art of Healthy Arrogance & Dreaming Big By Will Packer Trailblazing filmmaker and powerhouse CEO Will Packer presents powerful and illuminating stories from the front lines of Hollywood to offer a clear vision on how to manifest your own successby believing there is no one more deserving of it than you. Listen to our Book Bite summary, read by author Will Packer, in the Next Big Idea app or view on Amazon. How to Break Up With Your Phone By Catherine Price Smartphones have stolen an alarming amount of our attentionand therefore our lives. To nurture habits that fill our precious time with fun, excitement, and connection, start by breaking up with your phone. Listen to our Book Bite summary, read by author Catherine Price, in the Next Big Idea app or view on Amazon. Four Days a Week: The Life-Changing Solution for Reducing Employee Stress, Improving Well-Being, and Working Smarter By Juliet Schor Research increasingly shows that switching from five to four is a win for employees and their entire company. The benefits are so impressive that governments are getting involved in legislating fewer working hours. Times are changing, and modern life and modern business are better off on a four-day work schedule. Listen to our Book Bite summary, read by author Juliet Schor, in the Next Big Idea app or view on Amazon. Theres Got to Be a Better Way: How to Deliver Results and Get Rid of the Stuff That Gets in the Way of Real Work By Nelson Repenning and Donald Kieffer A lot of companies struggle with workflow design challenges that stand in the way of getting real work done. Fortunately, for these similar obstacles there exist solutions that apply across industries. Listen to our Book Bite summary, read by co-authors Nelson Repenning and Donald Kieffer, in the Next Big Idea app or view on Amazon. The Brain at Rest: How the Art and Science of Doing Nothing Can Improve Your Life By Joseph Jebelli Your brains default network is the most important part of your brain that you have probably never heard about. It is critical for maintaining intelligence, creativity, memory, and so much more. The key to a healthy default network? Rest. Listen to our Book Bite summary, read by author Joseph Jebelli, in the Next Big Idea app or view on Amazon. Finding Focus: Own Your Attention in an Age of Distraction By Zelana Montminy We live in a world that is quietly, relentlessly unraveling our attention and, with it, our capacity to think clearly, feel deeply, and live purposefully. Finding Focus is about how to come home to yourself and what matters most. Listen to our Book Bite summary, read by author Zelana Montminy, in the Next Big Idea app or view on Amazon. Digital Exhaustion: Simple Rules for Reclaiming Your Life By Paul Leonardi A revelatory examination of why youre feeling so worn outand practical daily strategies to change your relationship with your devices. Listen to our Book Bite summary, read by author Paul Leonardi, in the Next Big Idea app or view on Amazon. The Key Ideas in 15 Minutes If you are going to get anywhere in life, you have to read a lot of books, Roald Dahl once famously said. The only trouble is, reading even one book from cover to cover takes hoursand you may not have many hours to spare. But imagine for a moment: What if you could read a groundbreaking new book every day? Or even better, what if you could invite a world-renowned thinker into your earbuds, where they personally describe the five key takeaways from their work in just 15 minutes? With the Next Big Idea app, weve turned this fantasy into a reality. We partnered with hundreds of acclaimed authors to create Book Bites, short audio summaries of the latest nonfiction that are prepared and read aloud by the authors themselves. Discover cutting-edge leadership skills, productivity hacks, the science of happiness and well-being, and much moreall in the time it takes to drive to work or walk the dog. I love this app! The Book Bites are brilliant, perfect to have in airports, waiting rooms, anywhere I need to not doomscroll You guys are the best! Missy G. Go Deeper With a Next Big Idea Club Membership The Next Big Idea app is free for anyone to tryand if you love it, we invite you to become an official member of the Next Big Idea Club. Membership grants you unlimited access to Book Bites and unlocks early-release, ad-free episodes of our LinkedIn-partnered podcast. You also gain entry to our private online discussion group, where you can talk big ideas with fellow club members and join exclusive live Q&A sessions with featured authors. For a more focused learning experience, we recommend a Hardcover or eBook Membership. Every few months, legendary authors and club curators Malcolm Gladwell, Susan Cain, Adam Grant, and Daniel Pink select two new nonfiction books as the must-reads of the season. We then send hardcover copies straight to your doorstep, or eBook versions to your favorite digital device. We also collaborate with the authors of selected books to produce original reading guides and premium e-courses, 50-minute master classes that take you step by step through their most life-changing ideas. And yes, its all available through the Next Big Idea app. My biggest Thank You is for the quality of book selections so far. I look on my shelf and see these great titles, and I find myself taking down one or two each month to reread an underlined passage. Full marks to all involved! Tim K. Learn Faster, From the Worlds Leading Thinkers Whether you prefer to read, listen, or watch, the Next Big Idea is here to help you work smarter and live better. Wake up with an always-fresh Idea of the Day, the perfect shot of inspiration to go with your morning coffee. Then dive into one of our Challenges, hand-picked collections of Book Bites that form crash courses in subjects like communication, motivation, and career acceleration. Later, watch the playback of an interview with U.S. Surgeon General Vivek Murthy, Stanford psychologist Jennifer Eberhardt, or philosopher John Kaag. And be sure to check the Events tab in the app, so that you can join an upcoming live Q&A and personally chat with the next featured thought leader. If youre hoping to grow as a person or as a professional, we hope youll join us and tens of thousands of others who enjoy the Next Big Idea. Get started by downloading the app today! Enjoy our full library of Book Bitesread by the authors!in the Next Big Idea app. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
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E-Commerce
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