Douglas C. Yearley Jr. was in elementary school when siblings Robert I. and Bruce E. Toll built their first two model homes in 1967 in the Philadelphia suburb Elkins Park, Pennsylvania.

Yearley, 65, joined Toll Brothers in 1990 and has served as CEO since 2010.

“We’re America’s Luxury Home Builder,” he said, touting the brand’s tagline during a interview Feb. 19 at Toll Brothers headquarters in Fort Washington, Pennsylvania.

The company founded by the brothers, who grew up in an Elkins Park house their father built, completed 11,000 new homes in 2024.

Toll Brothers is a household name in Pennsylvania, New Jersey and Delaware, and is no stranger to 23 other states across the country, including Florida and California in 2024. In the Greater New York area alone, 43 residential projects — many of them high-rises — in Manhattan, Brooklyn, Jersey City and Hoboken were built by Toll Brothers.

The company’s net income for fiscal year 2024 was $1.57 billion, though sales and income were below projections in the first quarter of fiscal year 2025.

“We’ve risen to the challenge of satisfying the need people throughout the country have for something that’s embedded in American culture: home ownership,” Yearley said.

“The earnings miss was primarily due to (lower asset values) and a delay in the pending sale of an apartment property that is now expected to close later in year,” Yearley said. “Our core homebuilding operations met expectations in the quarter, and we reaffirmed all of our key homebuilding (estimates) for fiscal 2025.

“The long-term outlook for the new home market is very positive, especially for our luxury niche.”

Toll Brothers homes generally sell for between $350,000 and $5 million. The current average price is about $900,000. A quarter of all buyers pay cash, and first-time buyers — the typical age of whom has risen in recent years to the mid-to-late 30s from the 20s — often are doing so thanks to considerable down payment help from their parents.

Challenges amid a housing shortage

Borrowing costs for homebuyers remain high. The 30-year fixed rate mortgage has hovered just under 7% for five weeks as of Feb. 25, according to the government-backed mortgage buyer Freddie Mac.

The number of existing home sales decreased 4.9% in January, according to the National Association of Realtors. Wharton real estate professor and podcaster Susan M. Wachter suggests there are “muddy waters ahead” for the industry.

While Toll Brothers saw solid first quarter demand, the start of the spring selling season has seen mixed results. Meanwhile, “there is a serious housing shortage across the country,” said Yearley, and experts agree.

Alex Horowitz, director of the Housing Policy Initiative of the Pew Charitable Trusts, put the number at between 5 million and 7 million units, and Chen Zhao, head of economics research at Redfin, said 1.5 million to 7 million.

Land use regulations and restrictive zoning are the foremost causes of the shortage, according to Horowitz. Yearley said zoning and regulations in states like New Jersey can mean it takes developers three to five years to build a home.

“But the main limitations on building housing in this country are land and workers,” he said. “The industry’s construction needs are not going to be satisfied by American kids. We need a healthy immigration policy, period. That is not a political statement.”

Toll Brothers and other homebuilders also are monitoring the Trump administration’s actions on tariffs. The company imports lumber and steel from Canada, but with the implementation of those tariffs delayed, “right now it’s business as usual,” said Yearley.

‘More supply is more supply’

While known as a luxury builder, Toll Brothers has also built 22,000 apartments, most of them in the last decade.

The company builds some affordable rental units, including townhouses, within larger market-rate developments in communities that offer incentives.

“We’ll come in with plans to build townhouses, and the town will ask us to build some units for lower-income people to help them meet their (affordable) obligations,” said Yearley.

Although Toll Brothers does not track the total number of affordable units it has built nationally, the arrangements with individual communities in New Jersey, Pennsylvania, and Massachusetts “are working well,” said Yearley.

“When you increase the overall supply, it has to affect everyone,” including lower-income buyers, Zhao said. “When we advocate for more construction, we’re agnostic about price. At the end of the day, more supply is more supply.”

It’s a Philly thing

Robert I. Toll died in 2022. His younger brother, Bruce E. Toll, retired from the company’s board of directors in 2016.

“Toll Brothers was founded here and grew up here. We’re a household name in Philadelphia, and like Philadelphia, we have a great loyalty to the brand,” said Yearley. “This company was founded on grit, and on being smarter and working harder than anyone else, and having a competitive drive that speaks to how Bob and Bruce were raised, and speaks to Philadelphia.

“We hate to lose.”

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