A lean-agile model of homebuilders' production systems is proposed in this research. Value stream mapping is utilized to clarify the proposed lean-agile model, in which pull and Kanban are used to ensure smooth production upstream of the de-coupling point, while fluctuating market demands in terms of variety of homes and variability of volumes are managed by the agile process downstream of the de-coupling point. The decoupling point is used to provide components to downstream agile process and shield upstream smooth production from market fluctuations. A simulation model is developed to evaluate and validate the effectiveness of the proposed lean-agile model. Simulation experiments show that the lean-agile model prevents the accumulation of high inventory levels and thus provides better customization opportunities for clients compared to even-flow-construction. It also provides a more stable process with shorter cycle times compared to sales-driven production. The proposed lean-agile model offers new possibilities for homebuilders to manage the balance between meeting fluctuating market demands and stabilizing the production system.