December Another Strong Month for Home Builder Sales, Optimism Ahead
January 21, 2020
The latest Builder Intelligence Report, compiled by BTIG in partnership with HomeSphere, continued to show good builder sales strength, with nearly half of respondents seeing positive year-over-year growth, and fewer than 20 percent seeing declines. It’s expected we’ll see very robust fourth quarter order rates for the industry overall.
Respondents were also asked about their 2020 outlook, with many showing optimism for the new year. Fifty-five percent are anticipating unit sales growth of at least 10 percent and over one-in-five are forecasting more than 20 percent growth.
When it comes to product mix, 31 percent of respondents see the entry-level mix growing either substantially or modestly, while about half think it won’t change much. More than 75 percent of respondents believe land and subcontractor labor will be the largest cost challenges they face in the new year.
Highlights from the latest Builder Intelligence Report
Sales and traffic. Sales trends decelerated slightly from November with 47 percent of respondents reporting year-over-year sales increases (compare that to 28 percent in December 2018).
Expectations. Thirty-three percent of builders described sales as better than expected versus 18 percent who reported it as worse than expected. This compares to 39 percent “better” and 19 percent “worse” in November.
Pricing and incentives. Pricing was stable despite the holidays, with 38 percent of builders raising most, all or some of their base prices. No builder reported lowering prices. Twenty-eight percent reported raising most, all or some sales incentives, while only two percent reported decreasing most, all or some of their incentives.
Input costs. Labor headwinds grew slightly, with 30 percent of builders reporting rising subcontractor costs versus 23 percent in November. Thirty-seven percent of respondents also reported rising month-over-month material costs as compared to 36 percent in November.
HomeSphere/BTIG Builder Intelligence Report
HomeSphere partners with the research firm BTIG to create a monthly report to provide our builders and manufacturers with exclusive and timely insights about the market.
To compile the report, we survey HomeSphere’s 2,600 regional and local home builders about sales, traffic, pricing, labor costs and other key industry metrics.
How to get the monthly report
If you are a builder and would like to participate and receive the monthly report for free, request an invitation below: