Taylor Morrison remains committed to its goal of closing 20,000 homes by 2028, though the progress toward this goal in 2026 will be more focused on community openings than closing volume growth. The eighth largest company on the 2025 Builder 100 list is also refining its land approach and focusing on a larger built-to-order mix relative to spec homes in 2026.
“We continue to target growth over the next many years, including a continued aspiration to reach 20,000 closings, but we will not do so simply for growth’s sake,” CEO Sheryl Palmer said during the builder’s fourth quarter earnings call. “We are limiting incremental land investment in non-core submarkets that primarily cater to the most price-sensitive buyers. While these locations make up only a small portion of our overall portfolio, greater pricing pressure and a reliance on spec inventory in these areas has compressed margin opportunities versus comparable core markets.”
Community Count Growth
In fiscal 2025, Taylor Morrison weathered challenging market conditions to deliver 12,997 closings, an increase of 0.8% from fiscal 2024. The builder’s revenue was essentially flat at $7.76 billion while net sales orders fell 9.6% annually to 11,074.
Taylor Morrison’s early 2026 guidance, which recognizes the importance of the spring selling season on full-year results, calls for closings of approximately 11,000.
“Given slower sales of to-be-built homes in 2025, we entered this year with a lower-than-normal backlog of just over 2,800 homes,” Palmer said. “As a result, this year’s home closing deliveries and margins will be more dependent on sales during the spring selling season than is typical for our business.”
Despite the smaller backlog entering 2026, Taylor Morrison is poised to grow with over 100 community openings in 2026, including over 20 in the builder’s resort lifestyle brand Esplanade. These community openings are projected to contribute closings as soon as the second half of 2026 and into 2027.
“The unique value proposition [of Esplanade communities] drives superior home prices and gross margins that consistently exceed the balance of our business,” Palmer shared with investors. “With a strong pipeline of Esplanade communities coming soon and opportunities for brand expansion in many of our markets, we expect this segment’s contribution to our bottom line to grow meaningfully in the years ahead.”
In an environment where consumer confidence is uncertain and housing affordability remains challenging, a pipeline of Esplanade communities provides Taylor Morrison with a healthy sales runway. Buyers of the brand are typically less sensitive to interest rates than entry-level buyers.
The future community openings, for both Esplanade and non-Esplanade communities, reflect Taylor Morrison’s focus on core locations that resonate with prospective buyers.
“Most of our buyers consistently tell us that the overall community design is as or more important than the home itself. Furthermore, 80% of our buyers say that wellness is important to their purchase decision, and even a higher percentage in our Esplanade communities,” said chief corporate operations officer Erik Heuser. “As a result, we believe our emphasis on prime locations, thoughtful community development, and amenity offerings position us well.”
Spec Versus To-Be-Built in 2026
Like many public peers, Taylor Morrison leaned into spec homes and incentives in 2025 in response to market conditions. Spec homes accounted for 72% of sales and 66% of closings in the fourth quarter, significant year-over-year increases, though the builder’s total spec count decreased 11% sequentially to 2,956 at the end of the fiscal year.
Chief financial officer Curt VanHyfte projects a lower gross margin in the first quarter of 2026 as the builder sells through its existing spec inventory. However, the builder is planning to return to a more historical mix of built-to-order and spec homes in 2026.
“To-be-built sales in January gained 700 basis points of share versus the fourth quarter when we sold a record number of intra-quarter spec closings,” Palmer said. “We have reduced our spec inventory by 24% since 2025; we are focused on continuing to responsibly sell through this inventory while being highly selective in putting new specs into production.
“What we’ve seen since the first of the year is buyers are showing up with more of a desire to buy what they want, where they want, how they want. Lot premiums have become quite important again,” Palmer continued.
Looking Beyond 2026
Into 2026 and beyond, Palmer said Taylor Morrision’s product diversification across entry-level, move-up, and active-adult product and consumer-centric philosophy will continue to differentiate the company among peers.
“With competitive pricing pressures unlikely to evolve, we are taking proactive steps to ensure our portfolio remains well positioned to perform regardless of the market backdrop,” Palmer said. “We are cautiously encouraged by the early activity we are seeing as the spring selling season generally kicks off in full force this week. More so than any other factor, I believe consumer confidence will be the most important determinant of further demand recovery.”
“I expect 2026 to be another solid year for our organization, albeit one focused on setting the stage for a reacceleration of growth in 2027 and beyond,” she concluded.
