What Lennar & KB Home Just Told Us About Storage Demand

THE SELF STORAGE REPORT — FULL TRANSCRIPT Episode: Ep. 7 — "What Lennar & KB Home Just Told Us About Storage Demand" Format: Solo — Chris Berg (Abernathey Development, "The AI Storage Guy"), reading the Lennar and KB Home Q2 2026 homebuilder earnings calls for what they signal about land prices, consumer sentiment, rates, and self-storage demand ("skate to where the puck is going"). Topics: Public Storage's aggressive 2026 (PS 4.0, Welltower JV, ~$10.5B NSA, +$1.2B Public Storage Canada — 68 sites / 5.3M sq ft; PSA doing a 3PM session at the CA SSA in July; PSA manages all of Chris's assets); consumer sentiment at multi-decade lows (Univ. of Michigan); Bank of America (June 22) flagging a real possibility of THREE rate HIKES in 2026; Kevin Warsh's hawkish first presser; land prices beginning to come down (KB Home); KB Home long the SF Bay Area (echoing Spencer Levy); the smaller-homes → more-storage tailwind (home size vs. storage-usage chart). Closes with the Storage Demand Score. Note: Clips from the KB Home / Lennar / NAR earnings calls are audio and not transcribed here; this is Chris's framing (clip points marked). Recorded: ~July 2026 Source: original recording transcript (solo; lightly cleaned for readability) ======================================================== Chris Berg: Today, you and I are going to be like the Great One, Wayne Gretzky — we're going to go where the puck is going, rather than where it's been. We're going to dive into the Lennar and KB Home Q2 2026 earnings calls. Why do that on the Self Storage Report? Because this tells you where the puck is going — where people are building, where they're buying lots — and of course the price of land, which we've been talking about for a while. A very important metric. Welcome to the show. I'm Chris Berg, head of business development with Abernathey Development. Subscribe so you can be the first to get the content we put out every week. And if you're developing, buying, or acquiring sites, check out storagedemandscore.com to ensure there's actually demand for your product in that market — powered by TractIQ. Before we get into any of this, we have to address Public Storage. They are dropping the hammer in 2026 — out of the gates with PS 4.0, the JV with Welltower, a $10.5 billion deal with NSA, and then this week another $1.2 billion on Public Storage Canada — 68 sites, 5.3 million square feet. That's going to be very good for them, because there's a lot less supply in Canada than in the U.S. The stock's been performing extraordinarily well — as of the last show, Public Storage was outperforming the QQQ and the S&P 500. I think what people are buying is the platform, so it's an important company to keep your eye on. One other thing: they manage a lot of our assets — all of them at this point — and they're doing a third-party-management bonus session at the California SSA coming up in July, the first time they've ever done that for their 3PM partners. So Public Storage is making moves; we'll keep an eye on it. Now, the home builder calls — and what's really important to note is consumer sentiment. According to the University of Michigan (which comes out monthly), it's debatable how they measure it, but it's roughly the worst it's been since the 1950s. So think about it: if consumer sentiment is really low and confidence is low, what does that mean for people going in to get a mortgage and buy a home? First, remember: back in early 2026 a lot of people were talking about potential rate cuts. Well, Bank of America just came out on June 22nd saying there's now a great possibility, in their opinion, that rates could actually be raised three times in 2026. If you watched Kevin Warsh's first presser — many thought he'd be dovish; he came out much more hawkish. That's important, because rates going up doesn't bode well for consumer confidence and probably raises mortgage rates. Here's an important clip from the KB Home Q2 2026 earnings call. If you've watched the show for a year now, I've said: pay attention to the price of land — always a very important economic metric. Remember, it was September 2024 when Lennar and other home builder stocks hit a peak. Often when home builder stocks start to go down, that's a sign the economy is slowing — and that's been the case; there hasn't been a new all-time high in the home builder stocks lately. I said a while ago: pay attention to the middle or end of 2026, that's when I believe you'll see land prices start to come down. [Clip: KB Home Q2 2026 earnings call — analyst question on land] Chris Berg: He's languaging it carefully, but the important takeaway: they're starting to see land prices come down. Keep your eye on that metric — I think it'll happen more, and probably even more precipitously in the months to come, definitely into 2027. Both home builders basically said the same thing. Lennar spent more time on consumer sentiment than KB Home. One surprising thing in the KB Home piece: they're very California-heavy and very long the Bay Area — the same thing Spencer Levy said on the show a couple weeks ago. Three years ago Spencer was long the San Francisco Bay Area; many laughed at him, "there's feces and needles and drugs, no way I'm putting capital there." Now that's bearing out, and KB Home said the same on their call. On consumer sentiment — for self-storage, people moving is the lifeblood of the business. Listen closely to what they're saying about the consumer. [Clip: Lennar on inflation and consumer sentiment] Chris Berg: I wish I had the article for you, but recently — I think one-third or one-quarter of people 35 or younger are now living with their parents. You could say that's bullish for storage: less room in the house, so you need more storage. I can buy that thesis to an extent. But people moving and buying homes is the lifeblood, so the longer they stay put, the less demand. [Clip: continued — rates / three hikes] Chris Berg: There he is, basically sharing what I said up top — B of A now suggesting there could be three rate hikes, versus many anticipating cuts at the start of the year. We'll see. If you watched Warsh's presser, much more hawkish than people anticipated coming out of the gates. Here's another important part — to give context: I recently watched an interview where a younger person thinking about buying a home was asked what the first question they should ask is. The answer: ask your boss. "Hey, I'm thinking about buying a home, what do you think?" — because does he plan to keep you on, especially in this AI environment where many tech companies are making cuts? Here's what the people at NAR had to say. [Clip: NAR on buyers, jobs, and confidence] Chris Berg: So there you have it. It's important to understand where people are right now on putting down a down payment and being attached to a mortgage — there's not a lot of confidence. So you'll continue to see people, especially those in 3% rates, stay put. The good news is things have flattened out in the industry, but it'll take a while to go back up. Now, what will the legislature, DC, and local municipalities do about the affordability crisis? There's been a housing bill that passed the House and Senate and went to President Trump's desk — I believe he said he won't sign it because of the "Save America Act" and voter ID, so that housing bill is off to the side for now (though they could override a veto in the legislature, so it may be moot). Lennar spoke about their perspective on the government showing up for the affordability crisis. [Clip: Lennar on government and affordability] Chris Berg: We'll see if that bears out. The key thing not being said: many people are going to stay in their mortgages, and there's not much DC can do about the 10-year. That clip reminded me of the famous Ronald Reagan quote. [Clip: Ronald Reagan quote] Chris Berg: I love that clip. So — that doesn't sound great for self-storage. Was there bullish news for self-storage in these calls? Yes. Eric, bring up this graphic. When you talk about affordability, one thing builders think they can do is build smaller homes — less footprint, less cost, hit budgets, put more people in homes. This is where you want to think long-term, and there's a bullish signal for self-storage: the blue line is home size over the last ~20 years, and the gold line is self-storage usage over the last 20 years, going up pretty dramatically. Homes getting smaller is good news — we just hope people continue to have disposable income to buy more stuff to store. The obvious question: this is great, Chris, but we all know supply and demand is the key. So go to the tool I built to understand whether there's demand in your marketplace for the product you want to build or buy: storagedemandscore.com. Put in an address, put in the net rentable square feet you'll build or want to buy (or zero for an acquisition), hit the big blue button, and it walks you through the demand score. Three-plus is high demand, two to three healthy, one to two moderate, below one not much demand. I'd love your thoughts — especially if you listened to the Lennar and/or KB Home calls. Are you bullish or bearish on self-storage right now? Thanks for joining us. I'm Chris Berg, this is the Self Storage Report. Please share this with your friends and colleagues, and subscribe to the channel. [END OF TRANSCRIPT]