Industry Survey: No Winter Slowdown for Home Builders

November 18, 2020

Builder Survey: No Winter Slowdown for Home Builders

Home builders aren’t feeling winter slowdown according to our latest State of the Industry Report, compiled by the research firm BTIG 

Seventy-three builders in all responded to our monthly survey, indicating their community sales, traffic and pricing power were anti-seasonally strong in October. Traffic came in at pre-pandemic levels while builders continued to raise prices.   

Meanwhile, building material costs remained elevated though responses indicated some improvement with less builders reporting month-over-month increases. Among anecdotal commentary, lumber continues to be a concern even as prices begin to soften.  

Survey results are in line with the latest NAHB/Wells Fargo Housing Market Index, which shows builder confidence at a record high of 90 points.  

Highlights from the latest State of the Industry Report

Sales and traffic. Sales and traffic were reported at survey record levels in October. In sales, 76 percent reported year-over-year increases compared to 67 percent in September and 53 percent in October 2019. Seventy-one percent reported an increase in year-over-year traffic compared to 67 percent in October. Eleven percent of builders reported a decline in traffic. One issue to note: quality of builder traffic went down from September to October. 

Expectations. Sales and traffic relative to expectations decreased with 59 percent reporting sales as better than expected and 54 percent reporting traffic as better than expected. That compares to 69 percent and 58 percent, respectively, in September.

Pricing and incentives. Builders reported continuing to raise prices with 76 percent raising some, most or all base prices compared to 75 percent in September and 39 percent in October 2019. Only one percent of respondents lowered pricing, while incentive use continued to remain low.

Input costs. Fewer builders reported material cost increases. Still, responses are elevated because of lumber. In October, 84 percent of builders reported rising material costs compared to 94 percent in September. Rising land costs are a concern with the percentage of builders who reported increases at the highest level since May 2018. Meanwhile, 12 percent of respondents reported increased availability of acceptably-priced lots compared to 12 percent in September and 20 percent in October 2019. 

HomeSphere/BTIG State of the Industry 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:

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