Real Estate

Big homebuilders grab up smaller rivals

Big builders are seeing their profits healthy and their homes selling at higher prices. For their smaller, privately owned competitors, times remain tough.

What sets the big builders apart is access to capital. The bond market has been kind to big builders, which issued a record $8.1 billion in bonds last year. Bond issues are on pace to have one of the strongest years ever this year, according to a recent analysis by J.P. Morgan (JPM).

Private builders have traditionally relied on small or regional banks for funding. But many of those lenders stopped making loans for construction and development during the financial crisis and have been slow to resume. More than 480 banks have failed since the beginning of the downturn, according to the Federal Deposit Insurance Corp.

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3d rendering of a row of luxury townhouses along a street

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