Homebuilder sellers face tougher prices as M&A appetite slows

A 15-year musical-chairs frenzy of mergers-and-acquisitions-powered U.S. homebuilding consolidation and concentration isn’t exactly stalling. But after nearly 200 combinations since 2010, the music may be slowing, and the change in tempo could leave some would-be sellers standing longer than they’d planned.The question for those sellers is no longer simply whether a willing acquirer partner will become each would-be seller’s White Knight in Shining Armor. It’s whether that buyer will pay what owners believe their companies are worth, at a moment when increasingly selective acquirers hold more leverage in valuations.Even as the race for scale hogs the capital-stack access priority agenda of every homebuilding business, from the boardroom to the jobsite, the realities of a “longer now” of headwinds have begun to stanch some of the adrenaline surge behind M&A’s recent feeding frenzy.We’re not calling an end to consolidation, concentration, deep local scale, and greater sway over homebuilders’ means of production. We’re saying the next few innings may look different from the last few, especially from the standpoint of who’s driving the action. JTW Advisors counts 197 U.S. homebuild...