The 2025 Spring Selling Season arrives amid an atmosphere of economic uncertainty, heightened buyer sensitivity to affordability, and market turbulence. U.S. homebuilders are grappling with the costly challenge of mortgage rate buydowns, volatile consumer demand, and the looming question: How can they close more deals profitably without eroding margins?

New Home Star believes it has found the answer with the launch of its own lending operation: New Home Mortgage Company.

Set for an official unveiling during this week’s International Builders' Show in Las Vegas, New Home Mortgage Company aims to solve the longstanding inefficiencies of traditional builder-lender relationships. As a correspondent lender, the company will work with eight lenders—one of the most prominent being Rocket Mortgage—to deliver more competitive rates, faster service, and tailored financing options to both homebuilders and their buyers. 

In an exclusive conversation with The Builder’s Daily, New Home Star CEO Dave Rice and Marketing Director Chris Laskowski unpack why this partnership is arriving at exactly the right moment—and how it can help builders navigate an increasingly volatile market landscape.

1. The Unmet Need: Builders struggle against a Backdrop of Economic Headwinds

Business sentiment is shifting. After an initial post-election boost driven by hopes of deregulation and tax cuts, a new wave of caution has emerged. According to Axios, consumer sentiment fell roughly 10% in February, with large-ticket purchase intentions—like home buying—plunging nearly 20%. Tariff threats, a key policy initiative from the new administration, are exacerbating inflation concerns, with year-ahead inflation expectations jumping to 4.3%.

Tariffs were widely cited as a key cause of higher prices in the manufacturing sector," reports S&P Global, which noted a sharp slowdown in economic output. These macroeconomic jitters only add pressure to an already strained housing market.

Against this backdrop, builders face a double-edged sword: high mortgage rates that stall buyer demand and escalating costs to secure sales through buydowns.

Mortgage joint ventures and preferred lender relationships have historically been riddled with inefficiencies that hurt both builders and buyers," says Dave Rice, CEO of New Home Star. "Builders often find themselves locked into partnerships where the rates aren’t competitive and the service levels fall short—making it harder to close deals and keep buyers satisfied. We knew there had to be a better way."

Rice points to an example from a builder client in Columbus who faced prolonged closings and uncompetitive loan offerings despite an existing preferred lender arrangement.

That situation isn’t unique; it’s a widespread industry issue," he explains. "Builders are spending tens of thousands of dollars per sale on interest rate buydowns to make monthly payments affordable—yet the process isn’t optimized, and buyers aren’t getting the best service."

These inefficiencies are particularly concerning in today’s market environment, where excessive reliance on buydowns raises questions about long-term resale values and market stability.

When builders spend 5-6% of a home’s sales price on a buydown, they’re setting a precedent that could backfire when those homes hit the resale market," Rice cautions.

New Home Mortgage Company: A Builder-Centric Lending Solution

New Home Mortgage Company was conceived to directly address these pain points. Unlike traditional preferred lender models that often favor the lender’s interests, this new correspondent lending platform is designed with builders and buyers at the center. By working with a network of eight lenders—including Rocket Mortgage as the largest and most technologically advanced partner—New Home Mortgage Company aims to provide superior rate competitiveness, faster closing times, and customizable financing solutions.

The core advantage of being a correspondent lender is choice and control," says Rice. "We’re not locked into a single lender’s guidelines or rate structures. By tapping into multiple funding sources, we can shop the best rates and terms for each buyer, ensuring that builders aren’t forced into suboptimal financing options just to get deals done."

Rocket Mortgage’s role in the new venture is significant, particularly due to its market-leading technology and operational efficiency.

Rocket brings cutting-edge tech and scale that elevates the entire lending process," Rice notes. "But what sets this initiative apart is the ability to leverage not just one but eight competitive lenders. It’s about creating an ecosystem where builders and buyers benefit from flexibility and speed."

3. Personalization Through Data

We’re moving beyond generic incentives toward hyper-personalized financing solutions," says Laskowski.

New Home Star’s advanced data analytics platform—integrated with marketing tools like HubSpot—creates dynamic buyer profiles, enabling targeted mortgage offers based on behavioral and demographic data.

We use both implicit and explicit data to determine fit scores for various mortgage products, allowing us to match buyers with solutions that maximize conversion chances while protecting builder margins," he explains.

Laskowski outlines several buyer segments and corresponding strategies:

• First-time buyers: Often prefer predictability; extended buydown programs or fixed-rate options hold more appeal.
• Move-up buyers: Prioritize lowering upfront costs; closing cost credits or adjustable-rate options resonate best.
• Active-adult buyers (often cash purchasers): Value non-mortgage incentives like HOA fee waivers or tax-offset credits.

Builders invest heavily in customizing floor plans and finishes—why not apply that same level of precision to financing?" Laskowski asks. "The data-driven approach ensures builders don’t waste money on incentives that don’t move the needle."

4. Timing and Market Impact: Why This Matters Now

The launch of New Home Mortgage Company couldn’t come at a more critical juncture. Mortgage applications for home purchases are running 39% below 2019 levels, according to the Mortgage Bankers Association, and affordability remains a top concern for potential buyers. With the 2025 Spring Selling Season underway, builders need every competitive edge they can find.

Buyers are sitting on the sidelines because financing feels complicated and expensive," Rice says. "Builders, meanwhile, are hemorrhaging margins with buydown strategies that aren’t always effective. We wanted to create a solution that addresses both issues simultaneously."

Industry sentiment reflects growing caution. According to a recent Axios analysis, business and consumer confidence is waning, driven by concerns over inflation, tariffs, and policy uncertainty.

We’re seeing buyers hesitate, not because they don’t want to move but because they don’t trust the financial landscape," Laskowski adds. "By simplifying the mortgage process and offering more competitive terms, we’re giving buyers a reason to re-engage."

5. Why This Model Could Set a New Industry Standard

While Rocket Mortgage plays an important role as the largest lender in New Home Mortgage Company’s ecosystem, Rice emphasizes that the broader goal is to redefine the builder-lender relationship.

Historically, these relationships have been transactional, focused on squeezing margins out of the financing process," he says. "We’re flipping that script. Our goal is to be a lender-of-preference—not just for builders, but for their buyers as well."

Laskowski believes that the initiative will push competitors to evolve.

If we’re offering faster closings, better rates, and more personalized service, other lenders and builder partnerships will need to step up," he predicts. "Ultimately, that’s a win for the entire market."

Competitive Edge in a Complex Market

As builders confront the dual pressures of affordability headwinds and a cooling demand environment, solutions like New Home Mortgage Company represent a strategic pivot toward adaptability and customer focus. With its combination of diverse lending sources, data-driven personalization, and operational speed, the new venture positions New Home Star—and its builder partners—to compete more effectively in the months ahead.

This isn’t just about surviving a tough market," Rice concludes. "It’s about thriving by offering solutions that meet buyers where they are while protecting builders’ margins. We believe this model can—and will—become the new standard in builder-financed home sales."

In a housing market seeking stability amid economic uncertainty, New Home Mortgage Company may just be the catalyst both builders and buyers have been waiting for.