May Builder Trends: Sales, Traffic and Market Sentiment Improve
June 19, 2025
HomeSphere and BTIG’s May State of the Industry report shows builder momentum gaining steam, with encouraging trends across sales, traffic, and overall market sentiment.
Year-over-year performance strengthened, as 37% of builders reported increases in both sales orders and community traffic. This marks an improvement from April, when 31% saw sales gains and 30% reported higher traffic. Meanwhile, the share of builders seeing a decline in sales held steady at 25%.
Expectations also improved. More builders reported performance exceeding their forecasts, with 37% saying sales were better than expected, up from 33% in April. Fewer builders—just 20%—said sales fell short of expectations, down from 29% the month prior. Traffic trends followed a similar pattern, with sentiment shifting from a net negative in April to a positive spread of +12 in May.
In terms of pricing, more builders lowered base prices than in recent months—the highest level since November 2024—though some continued to raise prices. At the same time, incentive activity held steady, with only 6% of builders reporting a reduction in incentives.
Regionally, market conditions varied. Builders in Arizona and Iowa were especially optimistic, while those in California and South Carolina reported weaker demand.
Overall, May showed a notable improvement in builder sentiment and performance, with signs of growing confidence heading into the summer. The modest shifts in pricing suggest a balancing act to stay competitive as demand strengthens.
The latest NAHB/Wells Fargo Housing Market Index (released June 17, 2025) dropped two points to 32.
Highlights from the latest State of the Industry Report
Sales & traffic. Builders reported better sales and traffic relative to April. 37% of respondents reported year-over-year increases in sales orders vs. 31% in April, and 25% saw a year-over-year decrease in orders in May, flat sequentially. 37% of builders reported an increase in year-over-year traffic at communities while 25% saw a decline vs. 30% and 34%, respectively, last month.
Sales & traffic relative to expectations. Business relative to expectations improved in May compared to April. 37% of respondents saw sales as better than expected (33% in April), and 20% saw sales as worse than expected vs. 29% last month, resulting in a change in the better-minus-worse spread to +17 from +4. 33% of builders saw traffic as better than expected, and 21% saw traffic as worse than expected (a better-minus-worse spread of +12). This compares to 27% better and 30% worse last month (a spread of -3).
Base pricing & incentives. The number of builders who decreased base prices in May compared to April was higher and the greatest level since November 2024; the percentage of builders who increased incentives dropped month-over-month. 34% of builders reported raising either "most/all" or "some" base prices, up from 33% last month; 20% reported lowering "most/all" or "some" base prices, up sequentially from 18%. 6% reported decreasing "most/all" or "some" incentives, steady sequentially.
Regional color / interest-rate drop impact. While the small number of responses per state often makes us reticent to reach conclusions about specific markets, we note that AZ and IA builders were almost uniformly positive on their market. CA and SC builders reported weaker conditions.
HomeSphere/BTIG State of the Industry Report
HomeSphere partners with the global investment bank 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 2,700+ 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:
