“House from Hell” — How America’s Largest Homebuilders Shift the Cost of Shoddy Construction to Buyers

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Hunterbrook Media is working with litigators on potential lawsuits based on our investigation. If you are a victim, we invite you to share your story by emailing ideas@hntrbrk.com — where we source information for ongoing reporting.You’re in what you thought would be your dream house — until it wasn’t.The living room ceiling has been ripped out after sewage water backed up and flooded the upstairs bathroom. With the drywall gone, you can spot loose nails and concerning gaps between the floor joists. Rainwater seeps through the cracks around the front door. Insects crawl through the window frames — even though the windows were reinstalled because they weren’t installed properly in the first place. And most of your bathrooms are unusable, awaiting repairs the builder promised more than a year ago.It feels like a nightmare — but it’s reality, according to Danielle Antonucci, who invited a Hunterbrook Media reporter to the home she and her husband bought just four years ago in Sarasota, Florida, built by the nation’s largest homebuilder, D.R. Horton ($DHI). In an email provided to Hunterbrook, Antonucci desperately pleaded with D.R. Horton to address the numerous defects rendering their home nearly uninhabitable: “I keep getting the response that this matter has been escalated to the Sarasota office,” she wrote. “It has been 21 months!”A photo of Antonucci’s living room. The ceiling has been ripped out since over a year ago, she said, after sewage water flooded from the upstairs bathroom. Source: Hunterbrook MediaPhotos of numerous problems in Antonucci’s home, including poorly fastened floor joists, incomplete bathroom and bedroom repairs, and cracks along the main doorframe. Sources: Danielle Antonucci, Hunterbrook Media“Physically, mentally, emotionally, financially, it’s been the biggest nightmare of my life,” Antonucci said, adding, “This is my full-time job now, dealing with this home.”Antonucci’s makeshift office where she said she deals with D.R. Horton over the defects in her home pretty much full-time. Piles of records — her correspondence with various subcontractors, building manuals, architectural plans, county inspection records — sit neatly on tables.

Source: Hunterbrook Media. Photos taken on April 25.Antonucci and her family. Source: Danielle AntonucciMore than 60 homeowners across 16 states who purchased their dream home from one of the nation’s two largest residential homebuilders, D.R. Horton and Lennar ($LEN), shared similar accounts with Hunterbrook. They described extensive construction defects stemming from substandard workmanship, inferior materials, and blatant building code violations that sometimes make their homes unsafe and unlivable.D.R. Horton and Lennar Homes Closed in the Last Two Years and Locations of Issues Reported by IntervieweesThese homeowners also expressed profound frustration with the builders’ complex tactics to evade responsibility for these defects, leaving families out in the cold — sometimes literally.“It’s been the biggest nightmare of my life.” - Danielle AntonucciTake Leslie Montgomery, who said her family has had to live in hotels since county officials condemned her house after a mold infestation so severe that her previously healthy teenage son was unable to attend school. Lennar offered to clean the ducts, according to Montgomery, downplaying the problem even after biochemical inspectors the company hired declared the home a total loss. The inspectors tried to reason with Lennar, saying there was “a sick kid involved,” according to Montgomery, but Lennar didn’t budge. Their testimonies echo those of thousands of other homeowners who have desperately turned to social media platforms, official government channels, consumer review sites, and local news to demand answers on the construction defects that the companies refuse to acknowledge or address. Common complaints range from water intrusion, truss and joist deficiencies, ventilation problems, and missing or inadequate fireproofing or insulation, to foundation cracks, improper grading, and plumbing issues, many in violation of building codes.A screen capture of Better Business Bureau consumer ratings and complaint summaries regarding Lennar and D.R. Horton, captured on May 1. Source: Better Business BureauBoth D.R. Horton and Lennar promise that their mission to build affordable homes will not come at the cost of quality — even as they have told investors they would cut costs to offset diminishing margins amid a tightening housing market.“You have to start value-engineering every component of the home, which means making compromises, not in quality, but in the way that you actually configure the homes,” Lennar CEO Stuart Miller said in an interview with Bloomberg Television last year.

D.R. Horton similarly promised its investors it would find ways to cut costs, like “replacing certain high quality fixtures and finishes with less expensive yet still high-quality fixtures and finishes.” But many avoidable defects are caused by business practices that focus on building and selling quickly, with minimal concern for repeat business or quality control, according to Robert Knowles, president and founder of the National Association of Homeowners and a licensed professional engineer who said he has inspected thousands of new builds.“There is no bonus for building the house to code, for quality,” Knowles said, to his knowledge. “There’s only bonuses for speed … and volume.” Knowles estimated 100% of all new builds probably have multiple code violations.Knowles’ comments echo those of multiple other building experts and former employees interviewed by Hunterbrook, who accused the builders of cutting corners and neglecting safety measures. “I don’t know how they passed inspections, because there were so many violations,” one former D.R. Horton superintendent, who said they had left “because I do not want my name attached to that kind of work,” told Hunterbrook. “They always used the cheapest subcontractor, and focused on speed rather than quality.” Knowles estimated repair costs to be about $5,000 to $20,000 for these defects in a typical new home by these builders — assuming there are no major issues like siding or roofing that need replacing. That’s far more than the $2,348 on average per home that D.R. Horton set aside last year in expected warranty costs, or Lennar’s set-aside of about $3,602 per home, according to their SEC disclosures.A chart comparing the estimated range of repair costs in new builds to the amount D.R. Horton and Lennar set aside in expected warranty expenses last year. Source: SEC Edgar, HunterbrookHunterbrook’s investigation suggests a step-by-step corporate playbook designed to push the cost of the defects to buyers by exploiting the vast power imbalance between the billion-dollar companies and middle-class buyers. D.R. Horton and Lennar do this through one-sided contracts that lock in buyers and insulate the companies from liability for defects in the homes they sell, while minimizing the buyer’s ability to seek legal recourse.Sign UpBreaking News & Investigations.Right to Your Inbox.

No Paywalls.No Ads.GoThe playbook starts by rushing shoppers — lured by glossy brochures, upgraded model homes, unbeatable loan offers, and assurances of expansive warranty coverage — into signing away their rights in contracts that make it nearly impossible for buyers to back out, even if major defects are found, according to homeowners. After closing, many homeowners who uncover defects are confronted with a byzantine warranty process seemingly designed to outlast the homeowners’ willpower — or the warranty clock. Homeowners called the warranty a “sham” and described having to “hound” the company, “fighting tooth and nail” to try and get their problems addressed. One compared the experience to “performing a root canal on yourself.”Even if the buyers succeed in this process, the companies often make cheap band-aid fixes that don’t last, forcing homeowners to repeat the cycle all over again. As one Lennar homeowner put it, “If they do, quote, attempt to repair something, you’re left with at least three to five new issues. … It’s very depressing. It becomes your full-time job.” Many end up paying for the repairs themselves. Others, worried about property value, opt not to pry deeply into the problems and keep quiet. Still others face problems so severe and expensive that they can’t pay for repairs out of pocket, leaving them stuck in a nightmare home that they can’t even sell. “I’ve lived in the house almost four years. I’ve had no peace,” Kim Cardillo, a realtor who purchased a D.R. Horton home in a 55+ community in Port St. Lucie, Florida, in 2021 told Hunterbrook. “My credit’s wrecked because of this whole situation. So it’s like, where do I go?” She added, “I’m ready to just walk away, honestly. A couple weeks ago, in tears because it’s so stressful, I was just like, you know what, I’m just going to foreclose on the house.”Many turn to legal action as a last resort, only to find they’ve waived their right to go to court by signing the purchase agreement. Instead, they are forced into a private arbitration system that critics say is rigged in favor of the builders.

“This concept of forced arbitration, it abuses the very sense of justice,” said Martha Perez-Pedemonti, a civil justice and consumer rights attorney with advocacy organization Public Citizen, who has spent years fighting against forced arbitration.“You’re talking about someone’s housing, someone’s survival,” she told Hunterbrook, adding, “I think there’s very little else that’s more important to anyone.”For the builders, the system seems to be working. The two companies have remained hugely profitable even as their stock prices have tumbled more than 30% in the last year amid cooling demand and rising costs. In 2024, each company netted around $8 billion in gross profit from home sales — or $88,661 gross profit per home sold for D.R. Horton, and about $95,609 for Lennar.1Lennar and D.R. Horton have sold more homes each year than in the previous year since 2014, and while their gross profit has declined in the last two years, it remains higher than at any point before the 2022 peak. Sources: SEC EDGAR database, Hunterbrook MediaIn response to Hunterbrook’s request for comment, a D.R. Horton spokesperson said in an email, “D.R. Horton is proud to consistently deliver top-quality new homes across the United States, enabling more than 1,100,000 individuals and families to achieve the dream of homeownership since our founding in 1978.” They said the company provides “a robust new home warranty to our homebuyers” and the staff is “fully committed to customer satisfaction and respond to any warranty needs and concerns of our homeowners.” Lennar did not respond to our request for comment.Meanwhile, the lives of many homeowners across the country have been ruined.Desperate, some of these victims have become citizen journalists themselves, filing public records requests; clandestinely recording conversations with the companies; becoming amateur construction experts; and poring over manufacturer’s inspection manuals and local building codes. They’re also speaking at city council meetings to advocate for stronger policies against the builders, engaging audiences on TikTok, Instagram, and even Discord, and picketing and putting up flyers along roadways to warn other shoppers.