Welcome, prop.text readers!

In issue 36, we explore 3D printed homes hype vs reality as well as some data points that might be showing some stress in the lower income borrower cohort.

publicly.traded → Icon and 3D printed homes
industry.chatter → Falling mortgage rates could revive the market
beyond.the.curve → Google searches might show weakness

3D Printers Are Not the Solution

There are now some 100 or so companies around the world who are building homes with giant 3D printers that layer on concrete to create walls that look like horizontal corduroy. These companies have generally received favorable press, probably because reporters and editors love a novelty project and know little about how a business turns a profit. 

Icon, a Texas-based company that has been around since 2017, scored a favorable article in The New York Times early in September, which had “surprisingly little in the way of new information,” Brian Potter wrote in his newsletter called Construction Physics a few weeks ago. Potter had a more detailed analysis of the costs of building with 3D printing versus traditional methods in a post from April of 2024, and he questions how cheaply it can be done.

Since then, the only new project on Icon’s website is a 12-unit development in Austin and there is reportedly another 60-unit tiny house development for the homeless in Austin is on the way. 

All told, Icon has built some 200 homes. Given that the US is some 4.7-7.2 million homes short of demand, depending on the source, it appears it’s going to be an awfully long time before the 3D printers make a dent.

“Despite the enthusiastic tone of the article (it reads like a press release) with what appears to be a declining valuation and little in the way of new projects,” Hicks wrote. “Things seem to be going poorly for Icon.”

The biggest players in the space, who are lagging behind Icon in the number of units actually built, include:

• Mighty Buildings, which focuses on modular units 

• Apis Cor, which is developing rapid, on-site printing technology

• Alquist, a construction company specializing in 3D concrete printing 

• COBOD is a printer manufacturer with projects like 14Trees

• WASP is an Italian company focused on sustainable, clay-based printing

• Other firms are SQ4D, Peri Group, CyBe Construction, and Azure Printed Homes

Jason Ballard, Icon’s founder, told The Times he was driven by the goal of building affordable homes that were sturdy and better suited to withstand hurricanes and fires. The company is partnering with Lennar on a 100-unit development called Genesis within a larger project called Wolf Ranch in Georgetown, Texas, which is near Austin.

Lennar’s website says the homes are temporarily sold out, but also neglects to mention that these are 3D printed homes. (Other Lennar web pages do point it out.) As for affordability, the prices ranged from $469,990-578,990, which is in line with Austin’s current median home price of about $500,000, down 6.8% in the past year, according to Zillow.

Homes in Icon’s Mueller development in Austin are even pricier, with a nearly 2,400-square-foot 3 bedroom, 2.5 bath currently listed as “starting at” $1,319,000. A 1,607-square-foot 2 bedroom with 2.5 baths starts at $965,000.

So much for affordable 3D printed homes.

Alex Le Roux, the co-founder and former chief technology officer of Icon, calls Ballard “a sales grandmaster,” and he put that skill set to use when he spoke to The Times.

“Everyone laughed about the internet and smartphones, too, at first,” Ballard said. “There will be a breaking point when we break through.”

But it’s unclear when, or if ever, 3D printing will become a serious competitor to traditional stick-built construction or the modular industry, which is projected to grow at an annual rate of 4.6% from 2024-2030, from $110.6 billion to $144.8 billion. To put it in perspective, modular builds were about 5% of the total housing market in 2024.

There are plenty of downsides to 3D printed houses, aside from the fact “they look a little weird,” as Stewart Hicks, an associate professor at the University of Illinois Chicago's School of Architecture said as he critiqued the process last year on his YouTube channel. (You can watch the video here.) The homes have rounded corners and the walls are not smooth like the drywall we are accustomed to, though they are well-insulated and can withstand hurricane winds and fires.

The downsides include:

• A limited range of materials, particularly specialized concrete 

• Limitations in the complexity of home design 

• High initial costs for printers and specialized equipment

• Code compliance and permit challenges 

• The need for manual completion of finishes like plumbing and wiring 

• The difficulties in making repairs

• The complexity of the technology, which requires skilled labor  

“I think the greatest challenge with 3D printing technology at least as it is right now,” Hicks said in the video, “has to do with the relative inflexibility of the building after construction.”

Any repairs to the building, or additions or renovations, are not feasible given the fact that the giant 3D printer needs access from above to add layers. Hicks also points out that 3D printing is used for prototypes in most industries, not as a production method.

Still, Allied Market Research predicted back in 2023 that the 3D printing construction market, which was valued at $5.5 billion back then, would reach a total of $3.3 trillion by 2032. From the activity we are seeing in the last two years, that figure feels widely inflated.

Icon’s Vulcan printers, which can build an entire home on site, are estimated to cost some $500,000 each, but the company has not announced any new major projects. There is a new 3D printer in the works, called Phoenix, which will deploy an articulated arm, according to a video the company produced. The machine will be some 27-feet tall and is currently printing prototypes.

The Times article pegged Icon’s valuation at $1 billion, half the previous estimated $2 billion valuation and only twice the value of the more than $500 million in funding it has raised, well below the multiples venture capital investors look for. 

Falling mortgage rates could goose a market that “is primed to pop,” Lawrence Yun, the National Association of Realtors’ chief economist, wrote in a LinkedIn post recently. The magic number for rates seems to be near 6%, a rate could increase home sales by 10% to 15%. “Our analysis of income distribution and how many additional households would meet income requirements with lower rates indicates that 13% gain home sales looks likely,” Yun wrote. There are still issues with affordability, but as we noted last week median home sale prices are starting to moderate and the market is approaching balance.

The exceptions for emotional support animals finally hit a wall in Louisiana, where a federal judge ruled that landlords are not automatically required to waive pet fees, even for tenants with ESAs. In a building where pets were allowed, a tenant asked to waive the $400 animal fee because of her disability. The judge said that the tenant failed to show that the waiver was necessary for them to safely use and enjoy the housing and that the waiver was reasonable under the circumstances. 

GOBankingRates has put out a  list of 30 cities in America where home prices are significantly lower than their state averages, keeping mortgage costs manageable for those earning the median income, and where the quality of life is rated highly. The list includes college towns and lakeside communities, where crime is low, and good schools and a variety of amenities are available. The top spot went to Lynchburg, Virginia, and included a sampling from across the country, such as Merced, Calif., Utica, NY., Sandusky, Ohio, Logan, Utah, and Keene, NH.

Just Because

The rewilding of farmland is happening, but there are questions about how far it will go, according to the BBC. The United Nations noted recently that global agricultural land use peaked in the early 2000s and has been falling since. Around the world, grasslands, trees and bush are taking over former farmland and wild animals are moving back to abandoned pasturelands in areas where they were once the dominant species. The problem of deforestation is still urgent, as demand for beef, soy, cocoa and palm oil has increased the amount of land devoted to farming in South America, Southeast Asia and Africa. The world lost an area of tropical forest twice the size of Spain in the last 10 years. But, there have been more farms abandoned, replaced by reforestation efforts in Europe and North America and one-time pastureland in Australia and Central Asia where animals no longer graze.

Sales & Marketing roles:

Marketing Coordinator, Compass, Austin TX

Senior Account Manager, Runwise, NYC

Product & Engineering roles:

Product Strategy and Operations, VP - New Verticals | Housing, EliseAI, NYC

Head of Data & AI Platform, Industrious, Austin or NYC

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