June home builder sentiment and survey results are in. Top themes: 1) A lot more new home buyers cancelling. 2) Price cuts becoming fairly common. 3) Drop in demand finally cooling construction cost pressures (builder layoffs also happening). Market commentary to follow…
#Atlanta builder: “Someone turned out the lights on our sales in June!”
#Austin builder: “Sales have fallen off a cliff. We’re selling 1/3 of what we sold in March and April. Trades are more willing to negotiate pricing since market has adjusted significantly past 60 days.”
#Birmingham builder: “Sales have fallen 75% the last two months in a further out community.”
#Boise builder: “Sales have slowed tremendously. Builders are dropping prices and halting new starts. Seeing prices drop on labor due to slowing of home starts. Expecting 15% to 20% reduction in most costs.”
#Charlotte builder: “This recession is looking like and feeling like a big long five year depression.”
#ColoradoSprings builder: “Amazing how fast a market can change with such a rapid increase in rates. So many people were taken out of the market. Most builders will go to suppliers/trades and ask for rollbacks [on costs].”
#Dallas builder: “Framing labor has become readily available, suggesting housing starts slowdown is finally showing its typical signs. Haven’t raised prices in 3 months.”
#DesMoines builder: “Starting to see [construction] trades hold labor prices for us as they are fearful of a downturn.”
#FortMyers builder: “Investor sales have stalled.”
#GrandRapids builder: “Believe we’re on the edge of cost reductions. Making every effort to refuse further [cost] increases and pushing for decreases in all areas that have seen significant two year run up.”
#Greenville builder: “Traffic has slowed from red hot. Feels different for sure, but it’s more like a normal market.”
#Harrisburg builder: “Sales decreased to 50% of what they were 3 months ago. Traffic is down and we’re only moving spec homes after dropping prices. No one is buying to-be-built homes at this time.”
#Houston builder: “With the exception of concrete, [construction costs] appear to be stabilizing. Lumber is trailing downward, which is good because we’re going to need that reprieve for buying down mortgage rates to get buyers qualified.”
#Kennewick builder: “Sales have been very slow, and inventory is rising. Repricing our houses to try and find the new market.”
#Melbourne builder: “Our investor sales have stalled.”
#Nashville builder: “Scary times. Hoard cash and hang on for the ride! National builders are cutting staff and offering buyers incentives. Move-up buyers are now practically non-existent due to rising rates in comparison to their existing rate.”
#Phoenix builder: “Some builders are already cutting staff. Cancellations are extremely high. Dismal traffic and sales climate.”
#Reno builder: “With the market slowing, we’re expecting to see costs stabilizing and labor become more available.”
#RiversideSanBernardino builder: “We’ve reached the top in pricing.”
#SanDiego builder: “Fewer people in the market than before, but we are comparing against a market that defied any sense of normality.”
#StLouis builder: “Expecting to see opportunities for lower costs coming in the near future as demand cools and manufacturers and trades see backlogs shrinking.” THE END

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More from @RickPalaciosJr

Jun 8
May homebuilder survey results published last week. Top themes: 1) Builder metrics quickly deteriorating across the board. 2) Price cuts on standing ‘speculative’ inventory accelerating. 3) Buyer incentives are back. Market commentary to follow…
#Austin builder: “Some parts of town where finished homes are now taking a month to sell versus hours. Market is definitely correcting. Incentives are back and seeing some builders cutting prices on inventory.”
#Baltimore builder: “Customers now mentioning potential reduction in prices and/or increase in incentives.”
Read 23 tweets
May 20
Seeing ripple effects of rising rates reverberate across housing market. Starts with entry-level buyers (already slowing).
Move-up buyer also showing signs of slowing. Home equity rich helps offset 5%+ mortgage rate shock, but need a buyer to sell/move-up in market (often an entry-level buyer), that's now pulling back.
Luxury, second home, and vacation buyers also pulling back. Discretionary purchase and sensitive to overall investment portfolio/broader economic shifts (not great currently).
Read 4 tweets
May 9
April homebuilder survey results are here. Top themes: 1) Demand is slowing, namely entry-level due to payment shock. 2) Investors are pulling back. 3) Ripple effect of rising rates starting to hit move-up market. Market commentary to follow…
#Dallas builder: “Interest lists are shrinking or buyers are truly pausing.”
#Houston builder: “Many first-time buyers simply no longer qualify with the increase in interest rates, as their debt-to-income ratio gets out of whack.”
Read 29 tweets
Mar 7
Homebuilder survey results are in for February. Top themes: 1) Record high new home price increases at +20% YOY nationally. 2) Record low builder finished inventory. 3) Demand still off the charts & quality of home buyer prospect lists still solid. Market commentary to follow…
#Charlotte builder: “Restricting sales in all communities. Several communities with VIP lists over 1,000 and one of those communities only has 51 homes. Increasing mortgage rates haven’t slowed buyers down at all.”
#Charlotte builder: “HELP WANTED signs have driven direct construction costs up +20%. Keeping your employees from jumping ship to work for another builder costs 25% more.”
Read 21 tweets
Jan 12
A few gems from today's Fed Beige Book on crazy tight job market. Employers pulling out all the stops, even "no-meeting Wednesdays" to attract people.
"Extreme new-worker turnover"
"literally begging for employees"
Read 4 tweets
Jan 11
Home builder survey results are in for full month of December. Top themes: 1) Still a ton of demand for new homes. 2) Rampant construction material & labor shortages. 3) Bit of chatter on possible margin compression several quarters ahead. Market commentary to follow…
#Atlanta builder: “Have virtually no available inventory & huge backlog of 1,000+ units going in to 2022. Still metering sales in most communities, where the demand of waiting buyers still outnumbers our supply.”
#LasVegas builder: “Busiest orders for December I can remember in a long time.”
Read 27 tweets

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