The White House is investigating whether limiting stock buybacks by homebuilders could address the national housing affordability crisis. Federal Housing Finance Agency Director Bill Pulte told The Wall Street Journal last week that the administration is "studying" how much homebuilders spend on repurchasing their own shares. He said the industry is deliberately keeping prices high, which drives up housing costs and erodes consumer purchasing power. As of December, the median sales price for existing homes was $405,400, up 0.4% from last year and well above the $309,800 recorded in 2020.
"They're making, in some cases, more money than they've ever made, and they're buying back stock like never before," Pulte said. Stock buybacks, used by companies to reward shareholders or when they view their stock as undervalued, have long faced scrutiny from policymakers. Builders have continued these practices: in fiscal 2025, D.R. Horton and Lennar spent $4.3 billion and $1.7 billion respectively on buybacks. PulteGroup, founded by Bill Pulte's grandfather, allocated $900 million for buybacks in the first nine months of 2025, while KB Home's repurchases for the year ended Nov. 30 totaled $538.5 million. In October, KB Home's board authorized the repurchase of up to $1 billion of company stock.
Homebuilder stocks are performing strongly. As of market close Friday, the iShares US Home Construction ETF had risen 11% for the year, significantly above the S&P 500's 1.2% gain.
However, homebuilders appear to be constructing fewer new homes. Census Bureau data shows housing 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 Chairman Buddy Hughes said in a December statement that "builders are contending with rising material and labor prices, as tariffs are having serious repercussions on construction costs." The organization did not immediately comment on the buyback scrutiny on Friday.
Demand remains robust despite supply shortages. Existing-home sales increased 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. Refinance demand surged 40% for the week ending Jan. 9, following a drop in mortgage rates after President Trump said he was instructing "representatives" to buy $200 billion in mortgage bonds to lower housing costs.
Facing a growing affordability crisis and Trump's recent promise of "some of the most aggressive housing reform plans in American history," Pulte told Barron's last week that the administration is evaluating "incentivizing builders who are working constructively with us with appropriate pricing." He added that officials are "looking at the builders who are maybe not working constructively with us and evaluating their pricing, as well."