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Here are the top 3 takeaways from this month’s Homebuilder Survey.
Builders’ average sales rates (net of cancelations) cooled year over year (YOY) to 2.8 per community, yet rose +7% month over month (MOM) in August. This MOM rise outperforms seasonality, as sales rates typically decline -4% sequentially in August.
Single-family starts per community held flat MOM at 2.9 starts per community, in line with the August average of 2.8 from 2012–2019 (more normal years for housing).
Builders’ traffic sentiment and pricing power remained weak. Builders report the second-weakest August traffic and pricing ratings in the past 10 years, only surpassed by August 2022 when rates were accelerating quickly.
SALES
Flat new home sales YOY combines a
rise in community counts for the publicly traded homebuilders with a
drop in net sales per community.
Builders averaged 2.8 net sales per community, +22% above the 2.3 seasonal average from 2012–2019.
PRICING
New home pricing power erodes for a fourth consecutive month
as builders average a modest
price appreciation nationally.
26% of builders decreased net prices in August, the second-highest level for this month in the past decade, surpassed only by August 2022. The cooling price appreciation reflects builders’ increased use of incentives and some price cuts to support sales.
STARTS AND INVENTORY
Single-family starts dropped
, combining a
starts rate per community
and
publicly traded builder community count growth.
Builders averaged 2.2 finished inventory homes per community in August, +16% above the 1.9 seasonal norm from 2012–2019.
Cancelations dipped slightly MOM but held flat YOY at 10%.
SENTIMENTS
Sales expectations for the next 6 months held flat from July,with 23% of builders reporting Good sales expectations. Only 6% indicate a Poor sales outlook.
29% of builders report Poor traffic, while only 4% provide Good ratings.
Metrics in the final Builder Survey report may deviate slightly from this First Glance summary.
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