BiggerPockets Daily Builder Confidence Sinks as Starts Fall Off
9 snips
Feb 20, 2025 The U.S. homebuilding sector faces serious challenges, with builder confidence plummeting to its lowest in years. Rising mortgage rates and construction costs are causing a significant drop in housing starts. Despite a construction surge at the end of 2024, market uncertainty looms large, leading to cautious investor sentiment. The podcast dives into the factors driving these shifts, from tariff concerns to regulatory changes, and explores strategies for navigating this tricky landscape in real estate investment.
AI Snips
Chapters
Transcript
Episode notes
High Unsold Inventory
- Unsold home inventory is at its highest since December 2007, impacting builder confidence.
- This surplus has led some builders to cut prices to move properties, affecting market dynamics.
Declining Builder Confidence
- The National Association of Home Builders (NAHB) index dropped to 42 in February, its lowest since September.
- The six-month sales expectation component plunged 13 points, the steepest drop since the pandemic's start.
Buyer and Investor Strategies
- Slower construction could keep home prices high despite weaker demand, creating opportunities for buyers.
- Builders might reduce incentives like rate buy-downs, so acting sooner could secure better deals.