Taylor Morrison Shifts Focus to Lifestyle Buyers in 2026 Reset

Homebuilder scales back entry-level exposure, emphasizes build-to-order and brand-led sales strategy

Published on Feb. 12, 2026

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Taylor Morrison Home Corp.'s Q4 2025 results and 2026 outlook reveal a strategic pivot away from commoditized entry-level housing toward its higher-margin Esplanade lifestyle brand and a build-to-order sales approach. The company is scaling back investment in fringe and tertiary markets that require heavy discounting to attract first-time buyers, instead focusing on core geographies and customers with stronger balance sheets.

Why it matters

Taylor Morrison's shift reflects a broader industry trend of builders recalibrating their strategies to navigate a high-rate, high-price housing environment. The entry-level segment remains structurally challenged by affordability and financing constraints, while discretionary and lifestyle buyers offer more stable demand. The company's pivot underscores the need for builders to sharpen their focus on core competencies and customer segments that align with current market realities.

The details

Taylor Morrison closed nearly 13,000 homes in 2025, but its Q4 net sales orders fell 5% year-over-year as backlog shrank 40%. The company is signaling a 'reset' in 2026, projecting closings around 11,000 homes and gross margins near 20% as it liquidates spec inventory and realigns its portfolio. Central to the strategy is a pullback from certain entry-level geographies, especially tertiary markets where heavy discounting is required. Instead, the builder is emphasizing its Esplanade lifestyle brand, which saw stronger momentum late in 2025, and a shift back toward build-to-order homes after a spec-heavy 2025.

  • Taylor Morrison closed nearly 13,000 homes in 2025.
  • In Q4 2025, Taylor Morrison's net sales orders fell 5% year-over-year and backlog shrank 40%.
  • For 2026, Taylor Morrison is projecting closings around 11,000 homes and gross margins near 20%.

The players

Taylor Morrison Home Corp.

A national homebuilder based in Scottsdale, Arizona that closed nearly 13,000 homes in 2025.

Sheryl Palmer

CEO of Taylor Morrison Home Corp.

Esplanade

Taylor Morrison's resort lifestyle brand, which posted stronger momentum than entry-level or move-up orders late in 2025.

Curt VanHyfte

CFO of Taylor Morrison Home Corp.

Trevor Allinson

Analyst at Wolfe Research

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What they’re saying

“When we're talking about the first-time buyer environment today, with every sale, it's really working through with them, can they make this work. When you look at the move-up and the Esplanade buyer, it's really should I... They have the capabilities, they have the balance sheet.”

— Sheryl Palmer, CEO, Taylor Morrison Home Corp.

“It's refocusing the business geographically where we don't buy land in what I would call those more fringe or tertiary locations that attract a very different entry-level buyer.”

— Sheryl Palmer, CEO, Taylor Morrison Home Corp.

“What we definitely saw is the consumer — our industry trained them. And the honest truth is that the incentives were stronger with an inventory home, and the closer that home got to completion, the stronger the incentives.”

— Sheryl Palmer, CEO, Taylor Morrison Home Corp.

“That's something that's not going to happen overnight... we still have a little bit higher number of finished inventory than maybe we would like.”

— Curt VanHyfte, CFO, Taylor Morrison Home Corp.

“It's just not our intention to just throw inventory in the ground and sell at all cost, given, I think, the value creation that we have with our land holdings.”

— Sheryl Palmer, CEO, Taylor Morrison Home Corp.

What’s next

Taylor Morrison's shift away from commoditized tertiary markets and toward its higher-margin Esplanade brand and build-to-order strategy is expected to continue throughout 2026 as the company works to realign its portfolio and liquidate spec inventory.

The takeaway

Taylor Morrison's 2026 reset highlights a broader industry trend of builders recalibrating their strategies to navigate a challenging housing market defined by high borrowing costs, affordability constraints, and divergent demand across customer segments. By sharpening its focus on core competencies and discretionary buyers, Taylor Morrison is positioning itself for the next cycle rather than the last one.