February Sees Housing Strength, Builders Keep Eye on COVID-19
March 19, 2020
Home builders reported strong housing demand in February and are monitoring consumer worries about COVID-19 this month according to the latest State of the Industry Report, compiled by BTIG in partnership with HomeSphere.
The majority of respondents saw positive year-over-year sales in February, while a survey high reported increases in year-over-year traffic. At the same time, seven percent of respondents reported a negative impact to sales or traffic due to COVID-19 worries, while 14 percent noted a positive demand change thanks to lower mortgage rates resulting from the concerns.
Highlights from the latest State of the Industry Report
Sales and traffic. Sales trends were robust. In February, 62 percent of respondents reported year-over-year increases in sales orders per community (tying the survey record). In a survey high, 67 percent reported an increase in year-over-year traffic.
Expectations. Despite order strength through the typically slow fall and winter, more builders reported sales and traffic above expectations than behind by an over a 5-1 ratio.
Pricing and incentives. Labor, material and lot cost headwinds increased. Forty-three percent of builders saw subcontractor costs rise month-over-month versus 35 percent in January. Sixty-four percent of respondents also reported rising month over month material costs compared to 55 percent in January.
Input costs. Labor and material cost headwinds increased with 35 percent of builders seeing subcontractor costs rise month-over-month versus 30 percent in December. Fifty-five percent of respondents reported rising month-over-month material costs compared to 37 percent in December. Additionally, acceptably-priced lot supply dwindled and overall lot costs rose.
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:
