This podcast episode explores the significant transformation of the home building industry, shifting from land-intensive models to asset-like models that emphasize optioning land rather than ownership. The transition is driven by the realization that land ownership is not a strong investment and reduces ROEs. Homebuilders like D.R. Horton have exemplified this shift, demonstrating the advantages of an asset-light approach in improving financial performance. Despite challenges such as supply chain issues and rising interest rates, the industry benefits from strong demand due to the housing shortage, creating a long runway for growth. Homebuilders are expected to maintain margins through efficiencies and scale, with Horton's growth potential particularly promising due to its increased market share and revenue growth.
