Homebuilder Survey Shows Stable Sales but Softer Buyer Demand

Homebuilder Survey Shows Stable Sales but Softer Buyer Demand

United States: The latest BTIG/HomeSphere Homebuilder Survey indicated that conditions for small and mid-sized homebuilders remained broadly stable in May following two months of weaker performance. Around 28% of builders reported higher year-on-year sales, up from 24% in April, while the proportion reporting lower sales declined to 27% from 32%. However, buyer traffic remained subdued, with only 20% of respondents reporting higher year-on-year customer traffic, the lowest level since November 2023. The survey suggested that higher interest rates, elevated housing prices and inflation continued to weigh on homebuyer activity.

Pricing and sales strategies reflected the softer demand environment. The proportion of builders increasing base prices fell to 17%, while those reducing prices rose to 27%. At the same time, 29% of respondents reported increasing sales incentives, compared with 28% in April, while most others left incentives unchanged. Builder feedback pointed to a slower-than-expected spring selling season, with some respondents indicating that additional incentives and price reductions helped support sales despite weaker customer traffic, although these measures were reported to have placed pressure on profit margins.

Source: HBS Dealer