Survey: More home builders say sales are weaker than expected

Housing demand trends continued to decline in June to levels below already weak expectations, according to the latest BTIG/Homesphere Builders Survey.

Survey results include 51% of builders seeing a year-over-year decrease in sales with only 11% of respondents seeing better sales than expected, a record low for the survey. 

In the prior month, 15% of builder respondents said sales were better than expected. In contrast, 37% of builders said sales are worse than expected. 

While year-over-year traffic increased slightly to 24%, up from 20% in May, 50% of builders saw a year-over-year decline.

To compensate for lower demand and less traffic, some builders are reacting through price changes. According to the BTIG Homsephere, more builders reported lower or flat base prices on a month-over-month basis in June than increases for the first time since June 2020. 

Just 45% of builders raised some, most, or all base prices in June, down from 60% last month and 94% in June 2021. 

Survey results also show that builders have yet to see a significant increase in cancellations.  About 67% of builders reported cancellation rates remained constant, approximately the same as May. Only 3% reported seeing “significantly higher” cancellation rates.

The monthly BTIG/HomeSphere Homebuilder Survey solicits the perspective of approximately 50-100 small and mid-sized tract homebuilders nationally about sales, customer traffic, and pricing trends.

The survey has been conducted since October 2017.