Episode summary
Wade Jurney on building entry-level homes in this market
HousingWire Daily
· · 24 min · Hosts: Sarah Wheeler · Guests: Wade Jurney
Summary
Wade Jurney says National Home Corporation is built around one idea: keep starter homes as affordable as possible. The company is headquartered in Houston and builds across Texas, Oklahoma, North and South Carolina, Alabama, Georgia, and Indiana, with an average home price of $225,000 and a range from the 150s and 160s up to around $300,000. He says the business model depends on heavy standardization, value engineering, and stripping out customization so the company can stay the price leader.
Jurney argues the market problem is not mortgage rates so much as home prices, which he says are too high for the typical buyer. He expects the market to keep “bouncing bottom” for a couple of years, but says a softer market can still help a builder by improving labor availability, lot availability, and hiring. He sees the segment as a volume business, not a margin business, and says National Home Corporation is using the downturn to gain market share.
He also walks through the tight math of entry-level building: average lot costs around $60,000, gross profit was 17.2% at the end of Q3, and pre-tax net margin is about 4%, or roughly $9,000 per home. That leaves little room for design changes, lot inflation, or construction variances, which is why the company buys finished lots, avoids options, and keeps the product uniform.
Key takeaways
- Jurney says National Home Corporation targets only the starter-home segment and keeps its average home price at $225,000 by standardizing nearly every product decision.
- He argues that home prices, not interest rates, are the main affordability problem, and he expects the market to keep “bouncing bottom” for another couple of years.
- The company is pursuing volume and market share in a weak market because, Jurney says, softer conditions can improve labor, lot access, and hiring.
- Jurney says the economics are extremely tight: average lot cost is about $60,000, gross margin was 17.2% at the end of Q3, and pre-tax net margin is about 4%.
- He says customization is off the table because every upgrade raises cost and pushes buyers out of the market.
Notable quotes
“we only target the starter entry level segment. Uh in fact, uh I think we have the lowest average sales price of any builder in the country”
“I feel like homes I feel like everything's overpriced, but uh homes in particular, and so, you know, you know, our mission statement is to you know, make America affordable by keeping costs low”
“we can't think that rates are going to come down. I think the historical 30-year average is somewhere in that 7.5 or 7.8 range”
“we're going to take the opportunity during this you know, quote unquote downturn to grow”
“we always go back to price sells. We always go back to price”
How the episode opens
Welcome everyone. My guest today is Wade Journey. He's the chairman of the board of National Home Corporation. We're here at our home building summit in Dallas and Wade, welcome to the podcast. — Thank you so much. I'm happy to be here.
Happy to have you. So you and I talked a year ago uh the first time we hosted the Home Builders Summit and boy, a lot has changed since then. Um you were just on stage and you had some really interesting things to say. Um so I I just wanted to dig in. First maybe uh tell us a little bit about your company and and who you focus on.
Sure. Uh so the National Home Corporation is headquartered in Houston. Uh we build in Hous- uh Texas, uh Oklahoma, North and South Carolina, Alabama, uh Georgia and Indiana currently.
Uh so we have quite a wide geographic reach. Uh but we only target the starter entry level segment. Uh in fact, uh I think we have the lowest average sales price of any builder in the country.
Our average home price is 225,000. Uh ranges really anywhere from some of our homes go down to 150s, 160s, uh up to probably just around the 300 mark.
When you said that uh so you said that from stage, you know, that here's our average, you know, you could see people in the room kind of look around be like, "Really?" — Right. — How do you do that? I mean, some some of their their land cost is that much.
Yeah, I know. Uh so it's really what differentiates us. I mean, it's just it's it's been my life's battle to keep cost of homes down and I'm uh of the thought that uh homes in in the United States cost too much money nowadays.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- entry-level housing
- homebuilding
- housing market
- starter home laws
- mortgage rates
Companies and tickers mentioned
- National Home Corporation
Watch the episode
Watch “Wade Jurney on building entry-level homes in this market” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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