30% of homebuilders reduced prices & 59% offered incentives to homebuyers in April

Here are a few notes from National Association of Homebuilders on homebuilder confidence and how many homes are getting built right now.

– In April, homebuilder confidence ticked up slightly for a fourth straight month.

– Even though builders are still having trouble getting materials at the right prices (e.g., lack of access to electrical transformer equipment), limited inventory of existing homes for sale helped builders remain cautiously optimistic.

– NAHB chief economist Robert Dietz notes currently one-third of housing inventory is new construction, compared to historical norms of a little more than 10%.

– CRITICAL FOR HOME BUYERS:

Builders continue to offer sales incentives, which have supported new home sales since the start of 2023.

– ON THE BANK CRISIS:

So far regional bank strain hasn’t made lenders for builders and developers worse.

– BUILDER INCENTIVES FOR BUYERS:

– 30% of builders reduced prices in April, compared to 31% in March and February.

– Average price reduction in April was 6%, the same as in February and March.

– Share of builders using incentives to bolster sales has edged up from 57% in February, to 58% in March to now 59% in April.

– HOW MUCH ARE BUILDERS BUILDING:

– March starts on newly built homes dropped slightly from February (0.8%) to 1.42 million annualized.

– There are now 716,000 single family homes under construction, which is 11.8% lower than a year ago.

– There are now 958,000 apartments under construction, the most since 1973, and up 17.3% compared to a year ago (817,000).

– Total houses and apartments now under construction are 2.8% higher than a year ago.

– In March, builders completed 15,000 more homes than began construction, resulting in a decline for the construction pipeline.

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Reference:

– Single-Family Starts Improve in March | Eye On Housing