In BTIG/HomeSphere’s fifth weekly builder survey, which drew responses from 65 mid-size private builders across 27 states, 100% of respondents with operations in the Northeast, Midwest, and West regions of the U.S. reported either a complete shutdown or a slower-than-seasonably normal sales pace.
Of the builders with operations in the South, 71% reported a slower or complete shutdown in sales, while 87% reported slow or no traffic. Builders in the South were the most likely to see cancellations, at 31%, while Midwestern builders were most likely to see reduced start activity.
Out of all respondents, 85% reported a slower-than-normal sales pace, up from 79% the previous week. Seventeen percent of builders reported that their communities were completely shut down, and 28% reported higher cancellations than usual, down from 30% in the previous survey and 34% the week before.
Over the past five weeks of the survey, the percentage of builders that have reported a slower-than-seasonally-normal sales activity pace has risen from 49% for the week of March 24th to 85% for the week of April 20th. The percentage of builders reporting slower than normal foot traffic rose from 67% on March 24th to a survey high of 92% for the week of April 6th, down to 86% for the week of April 20th.
As of the week of April 20th, 57% of builders have either halted home starts or expect to start homes at a reduced rate. Ten percent of builders are unable to obtain permits, while 63% report permitting is taking longer than usual.
Free-form comments from builder respondents highlights the differences in conditions between regions and states. Builders active in Florida report difficult conditions for home sales. "Every phase of our business has slowed,” one says. "Sales are appointment-only, [and we’re] starting only customer homes and no inventory,” says another. According to a third, “We have homes sitting where mortgages were approved 4 weeks ago and now are on hold so we can't close them.”
At the same time, a Georgia builder reports that “sales are through the roof.” A Minnesota builder says, “"We had a good week -- a couple of purchase agreements and several bids. Better then it's been the last month so that's a good sign."
For one Virginia builder, keeping sales going means adjusting to a new normal. "One municipality is moving to video or 3rd party inspections,” the builder says. “The other municipality we normally deal with is still doing in-person inspections. We have a number of pre-sold homes and all those buyers tell us they are still able to purchase their home upon completion, so we are starting the construction process as we normally would. We had planned to start a few new spec homes, but those are put on hold for now."
