Builders Report Low Increases in Labor and Land Costs in March
April 28, 2020
While sales and traffic were undoubtedly impacted in March, we also saw a survey low for input cost increases according to the latest Builder Intelligence Report, compiled by BTIG in partnership with HomeSphere.
In fact, responses for month-over-month increases in both labor and land costs were at survey lows, with only seven percent reporting month-over-month increases in labor costs and 22 percent reporting the same for land costs.
Meanwhile, fewer builders also reported adjusting base prices, suggesting builders don’t believe price change will have much impact on unit demand.
Highlights from the latest Builder Intelligence Report
Sales and traffic. In March, 28 percent of respondents reported year-over-year increases in sales orders per community compared to 62 percent in February and 45 percent in March 2019. Forty-six percent saw year-over-year decreases. In traffic, 54 percent reported seeing declines in March, compared to four percent in February.
Expectations. Twenty-eight percent of respondents saw March orders above internal expectations while 46 percent noted a drop. It’s possible early month activity helped to make up for back-half weaknesses.
Pricing and incentives. Twenty-three percent of builders raised some, most or all bases prices in March compared to 48 percent bumping bases sequentially in February. Sixty-one reported holding bases flat, while eight percent lowered some, most or all prices. Incentive use increased only modestly.
Input costs. In February, 43 percent of respondents reported increases in subcontractor costs (versus seven percent in March), while 44 percent reported lot cost increases in February (versus 22 percent in March). Thirty-two percent of builders also reported rising month-over-month increases in material costs in March compared to 64 percent who said so in February.
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: