Homebuilding picks up steam in August
After a rough July for U.S. homebuilders, business seems to be picking up.
That good news comes from the latest iteration of the BTIG/Homesphere survey, which collected perspectives from 115 homebuilders in the month of August. According to the report, builders reported August business conditions as "less soft" than July. However, just 29 percent saw sales rates up year-over-year in August versus 32 percent in July.
Traffic also improved in August, with 37 percent of builders reporting year-over-year gains versus just 31 percent in July. The report also states the number of respondents raising prices dropped to the lowest level of the year (15 percent), while the percentage of builders increasing some, most or all sales incentives hit the second-
highest level of the year (27 percent).
Mortgage rates are also making an impact businesses. Forty-four percent of respondents say rates are having a "modestly positive impact," with 9 percent reporting a "strongly positive" difference.
The report also highlights which states are seeing a building boom or slower business conditions. According to the respondents, Ohio and Oklahoma showed very strong performance, but Georgia builders expressed negative sentiment. Meanwhile, Florida had a slow August while Texas and Arizona report mixed results. BTIG’s Carl Reichardt says, “The bottom line is lower rates appear to have improved activity, but modestly, after a soft July.”
More highlights from the report include:
Fewer builders increased base prices in August, while increased incentives reached the second-highest level YTD.
Fifteen percent of builders raised “most/all/some” base prices, down from 20% last month. Meanwhile, 18% lowered “most/all/some” base prices vs. 17% last month.
Twenty-seven percent increased incentive use, and 5 percent decreased use, compared to 28 percent and 2 percent last month.
Twenty-six percent of respondents saw sales as better than expected versus just 26 percent in July, while a quarter saw sales as worse than expected vs. 38 percent last month.
Twenty-three percent of builders saw traffic as better than expected vs. 26 percent in July, while 24 percent reported that traffic was worse than expected vs. 34 percent last month.
