Cancellation Rates Are Looking Better for Home Builders Mid-April
April 23, 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. This week’s survey represents mid-sized, private regional builders from 27 states.
Our latest flash survey, compiled from April 17 to 20, indicates builders are continuing to see slowed sales and traffic, due in part to preventative safety measures. On a more promising note, however, cancellation rates were reported at normal levels among the majority of respondents.
A survey high of builders, at 85 percent, reported slower-than-normal sales compared to 79 percent last week, while 86 percent reported below-normal traffic versus 91 percent last week. We also saw 17 percent of builders report complete community shutdowns. Anecdotally, we continue to hear that while traffic is down the quality is good with more serious buyers.
As for cancellations, 65 percent reported normal levels, while 28 percent reported higher cancellations than usual. The latter figure compares to 30 percent in last week’s survey and 34 percent two weeks ago.
Other stats to know:
- New construction: 47 percent of builders reported reducing their starts expectations (down from 50 percent last week), while 10 percent reported halting new starts (down from 13 percent). A survey high of builders at 43 percent said they are remaining on plan.
- Operations: 63 percent of builders reported that it’s taking longer to receive permits than normal, while 10 percent can’t obtain them at all.
This is the fifth survey in this series. See the trends broken down by week and region here.
In all:
Survey results suggest that builders are still facing a difficult sales and traffic environment, but cancellation data suggests that buyers under contract are still generally moving towards closing.
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