What Google's AI Mode Means for Home Builders: A Q&A with Jay Dixon

We sat down with Jay Dixon, founding partner of AdsIntelligence and one of our Preferred Partners, to make sense of two forces hitting homebuilders at once: a stalled market based on affordability and consumer confidence and the most significant change to Google Search in 25 years.

Jay works with builders and real estate advertisers every day, so we wanted his read on what's signal, what's noise, and where a builder's marketing budget should go right now.

Let's dive in:

To set the stage, what's the market backdrop builders are operating in right now?

JD: Builder confidence sits at 37 on the NAHB/Wells Fargo index, still well below the 50 threshold that separates good conditions from poor. The last reading above 50 was back in April 2024.

The defining feature of this market is incentives. We've now seen 14 straight months of them, which tells you affordability pressure has shifted from buyers onto builders' own bottom lines. About four in five builders are using incentives, with mortgage rate buydowns the most common tool, alongside amenity upgrades and closing cost assistance.

What gets overlooked is that builders themselves say the holdup isn't just rates. Buyer confidence has been the primary cited holdup for four consecutive months, and some of that is separate from mortgage rates entirely.

At the same time, Google is changing how search works. What's happening with AI Mode?

JD: AI Mode is now reaching about 75 million daily users, and ads are showing up in roughly 25.5% of AI results.

The change that matters most for a high-consideration purchase like a home is that search is moving from exploration to decision-stage filtering. When the AI summary fully answers a question, fewer people click through into a research phase, so click volume contracts but the traffic that remains is more qualified.

There's also a new format worth watching: Google's Business Agent for Leads, currently in U.S. beta. Instead of filling out a static form, a buyer chats with an agent trained on the advertiser's own website.

You mentioned click volume is shrinking. How should that change how a builder spends?

JD: Restructure for fewer but higher-intent clicks rather than volume. Because AI Mode is compressing top-of-funnel research traffic, the old "capture every informational query" approach is increasingly going to pay for impressions that don't convert.

It's smarter to concentrate budget on decision-stage queries (i.e. specific communities, "move-in ready homes near [city]," floor plan and price searches) where a builder's structured inventory data can actually qualify for AI placements.

Is the new Business Agent for Leads worth trying?

JD: Test it against your standard lead forms, but treat it as a test, not a commitment.

For a homebuilder, it's a strong conceptual fit, because buyers have specific, branching questions: lot availability, school districts, financing, timelines. A website-trained agent can answer those in the moment. The caveat is that it's new, and there's no track record yet for cost-per-qualified-lead in this vertical. And it only works if the builder's site content is genuinely complete, because the agent is only as good as what it's trained on.

“Complete content” is another salient point. Google’s AI Mode is equally a further shift in the lines blurring between SEM and SEO/AEO. If additional budget isn’t an option for further investment in a builder’s SEO/AEO strategies and efforts, we’d suggest pulling dollars out of the paid bucket. It’s that important right now.

Can you share any real-world examples?

JD: We’re carefully “testing” several strategies including:

• Applying 25% of paid search spend to Google’s campaign-type called AI Max. It’s one of their new, highly automated campaign types (similar to Performance Max) and our internal strategic philosophy is hesitant to let the fox watch the henhouse. But Google is rapidly pushing us all into this pond. There are strong signal, AI Max is the campaign that will place our ads in Google’s AI Overviews and AI Mode. So, we’re carefully testing.

• Emphasizing other digital channels like Programmatic (ie. Audience Town Advertising) for enhanced brand awareness campaigns (CTV) and Remarketing.

So where should a builder actually start? What's the first move?

JD: Lead the paid search strategy with the incentive, not the home. The most defensible move in this market is making the monthly-payment math the centerpiece of your ad creative and landing pages: rate buydowns, "payments from $X/mo," closing-cost coverage.

It follows directly from the fact that affordability and confidence, not awareness, are what's keeping buyers on the sidelines. An ad that resolves the payment objection addresses the actual barrier.

How fast does a builder need to move on AI Mode? Is this a "fix it this quarter" thing or a "watch and prepare" thing? What happens to the builder who does nothing for the next 12 months?

JD: We say start now, but start slow. Test. We’re looking at a few clients across a wide spectrum of the industry (ie. An MPC, a regional builder and 55+ community, etc…) in June and then we’ll evaluate. Those who start sooner will learn faster and be that much further ahead.

But as I stated previously, aligning your SEO/AEO and SEM strategies has never been more important. Understanding how each impacts the other is critical to success in this new paradigm.

For a builder with a limited budget who can only fix one thing in the next 30 days, what is it?

JD: If they don’t already have a robust SEO/AEO program, start investing there. It can only be a couple of thousand dollars a month for a decent effort. But given the renewed importance of this on all digital, getting this piece right is the foundation for anything else you might add later.

If that’s not an option, start playing around with Google’s AI Max campaigns. But work with someone who has experience in both digital media and real estate. The sky’s the limit for doing it wrong.

If everyone's rushing to Google AI Mode, where's the contrarian opportunity?

JD: This is where I'd push back on over-rotating to Google. A home is a local, visual, slow purchase. As AI reshapes search, first-party data, lower-funnel targeting, those channels AI Mode doesn't touch (YouTube, paid social, CTV) are becoming more important.

For builders specifically, the highest-leverage spend is often retargeting and nurturing people already in the funnel: community tours, video walkthroughs, neighborhood content on Meta and YouTube.

The real gap isn't initial discovery. It's buyer hesitation over a months-long decision.

What's the honest caveat builders should hear before they overhaul everything?

JD: That a meaningful share of buyer hesitation is confidence-driven and separate from rates, which means no advertising strategy fully solves the demand problem.

Marketing can capture and convert existing demand more efficiently, but it can't manufacture confidence that's being suppressed by macro factors.

Setting that expectation with a builder is more valuable than promising a strategy will move the volume needle on its own. And the right mix depends on the specific builder: price tier, geography, how much inventory they're carrying, their budget. Entry-level buyers are far more rate-sensitive than move-up buyers, and a Southern market loaded with new-construction inventory behaves nothing like a supply-constrained one.

Are there any metrics builders typically watch that may be misleading?

JD: Absolutely! Another major shift is measurement. AI–powered search experiences are likely to generate more zero–click searches, view–through conversions, assisted conversions, and multi–touch journeys.

That means marketers may need to rethink how success is measured.

Traditional metrics like click–through rate, last–click attribution and cost per click may become less valuable than brand visibility inside AI experiences, view–through impact, CRM–connected conversion quality, revenue attribution and first–party customer data. All things we’re innovating and building tracking around using AI.

It’s actually a super exciting time to be creating tools that connect the dots between online traffic and offline sales like never before.

And, Google has already announced new AI visibility and measurement capabilities for advertisers.

What's the most common mistake you see builders making in their Google spend right now? 

JD: Historically, builders’ digital agencies have “cheated” the system by bidding on brand (ie. Build name or Community name) which is typically the easiest and cheapest click to get since prospects were already aware of, and searching by that brand keyword. Moreover, those prospects searching by brand are also more likely to convert on these keywords, making the digital agency look like heroes by delivery high converting, low cost clicks. The problem is they're cannibalizing clicks they should have gotten for FREE organically.  

Performance Max is extremely opaque in terms of how it actually performs, but the reality is it’s doing the same thing via automation and is ultimately “trained” to bid on brand because that’s what converts ("performs"). It will be harder and harder to avoid these campaign types in the near future. Google is forcing advertisers in this direction. Leveraging other channels will be critical to the mix, as well as understanding who your traffic is, where they’re coming from, and what’s driving your traffic, conversions, foot traffic and sales.

Advanced Analytics platforms like Audience Town play a huge role in the buyer journey visibility. 

Where do AdsIntelligence and Audience Town fit together here? How does having third-party home mover data change what a builder can do with the strategy you're describing?

JD: Ultimately, it’s all about following behavioral trends. People don’t wake up one morning and decide to buy a home. Through advanced audience analytics like Audience Town, we collectively know the buyer journey is long (+300 days) and the touch points along the way are often as unique as the buyers themselves.

Over time, the advanced data will reveal actionable trends that will enable us to optimize campaigns (and more importantly spend) to what’s truly diving the most important KPI: sales! This will in turn create efficiencies to do more sales with the same budget or the same sales with less budget. The C-Suite loves that!

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