Basic economics: Home builders will keep building homes as long as selling them cover their fixed costs, even at the expense of losing money on the variable costs. If a two story home costs $200,000 to build and sells for $300,000, and if the variable costs are $50,000 of the cost to build, then builders will keep building until house prices drop to $150,000.00 even if they are taking a $50,000 hit on each house. Once the fixed costs are greater than the home price, the builder will close the business rather than continue to build houses that do not create enough revenue to cover the fixed costs.
Wrong business model - most builders build an house, on spec, and if they don’t make cost, fold up the business.
There are exceptions, of course - huge companies.
But you don’t wan’t to buy the crap they build.
I wouldn't expect that builders have much in the way if fixed costs.
They can have tremendous sunk costs if they buy a parcle of land and jump through all the hoops to get permits which makes time a critical issue, but I don't think many have large fixed costs like a manufacturing business where they can sell down the margin just to stay alive.