William Blair Lowers Builders FirstSource Rating, Sees 2027 Housing Starts Falling

William Blair lowered Builders FirstSource to Market Perform from Outperform on Oct. 22, signaling less confidence that the building-materials supplier’s shares will outperform the broader market over the next 12 months. The firm expects U.S. housing starts to fall 3% to 5% in 2027 and did not set a price target.

Market Perform is William Blair’s rating for a stock expected to perform roughly in line with the broader market, generally measured against the S&P 500. The rating change reflects the firm’s outlook for the shares’ relative performance.

September housing starts were at a seasonally adjusted annual rate of 1,221,000. That was 5.2% below revised August and 7.4% below September 2025. The margins of error were 11.8 percentage points for the monthly change and 11.5 points for the annual comparison, each larger than the reported decline.

The 30-year fixed mortgage rate averaged 7.32% for the week ended Oct. 22, down from 7.40% the prior week but above 6.19% a year earlier. October homebuilder confidence also fell to 29, its lowest level since June 2012, in the monthly index that tracks builders’ views of sales conditions, future sales and buyer traffic.

Builders FirstSource supplies materials and services for residential construction, repair and remodeling. In the quarter ended June 30, net sales fell 8.8% from a year earlier to $3.9 billion, while adjusted EBITDA declined 34.9% to $329.3 million. A lower housing-starts environment was among the factors behind weaker sales and gross profit.

For 2026, Builders FirstSource projected adjusted EBITDA of $1 billion to $1.2 billion and said single-family starts in its operating regions could decline by mid- to high-single digits. Builders FirstSource CEO Peter Jackson said July 30, “While housing market conditions remain weak, we are continuing to invest in innovation and capabilities that enhance the customer experience.”