Home Builders Report Slower Sales at the End of March
April 1, 2020
HomeSphere is partnering with BTIG to keep our partners current on home building business trends as they relate to COVID-19's impact on the economy and our industry.
In our latest flash survey, compiled from March 27 to 30, the majority of builders reported that they’re experiencing slower-than-normal sales as a result of the current climate. At the same time, cancellation rates are still at a normal level for most respondents, though more are starting to report higher rates.
Only 28 percent of respondents reported sales rates at normal seasonal levels, while 67 percent reported sales at below seasonal norms. That’s up from 49 percent in our previous survey.
As for cancellations, 63 percent of respondents reported normal levels — down from 70 percent last week. Once again, 10 percent reported rates as lower than normal, while 26 percent described them as above normal levels. That’s an increase from only nine percent in our previous survey.
With traffic impacted by a number of fronts — slowing demand, more widespread stay-at-home orders, model home closures, remote work and preventative safety measures — 80 percent of builders, unsurprisingly, reported numbers below seasonal norms.
Builders also reported that 42 percent are reducing their start expectations while 36 percent are remaining on plan. Twenty-two percent reported halting new starts. Respondents also indicated it’s taking much longer to obtain a permit.
We’re finding a continued slowdown in construction cycle times, weakened demand levels and some concern about the efficacy of backlogs.
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