Home Builders Report Less Buyer Demand

Concerns about tariffs, rising mortgage rates, and a potential recession appear to be influencing home sales. That’s according to a recent report from global financial services company BTIG and HomeSphere, which serves as a network for builders. The recently released April Home Builder Survey of small and mid-size home builders shows that 31% of respondents reported positive year-over-year sales, which is consistent with March data. However, the builders reporting negative sales increased to 25% compared with 23% in March.

Traffic trends also shifted, with fewer builders reporting increased traffic to their communities. In April, 30% of builders reported increased traffic, compared with 36% the month prior.

In response to softening demand, more builders adjusted their pricing strategies in April. The share of builders lowering base prices reached the highest level since January, while the use of sales incentives also grew. Of those surveyed, 33% of builders raised some or all of their base prices in April, while 18% lowered them.

Builders also noted their concerns about tariffs. In the April survey, 51% of builders said they expect costs from tariffs to have a modest negative impact on their businesses, while 20% expect a significant negative impact. Additionally, 33% of respondents said tariffs had a modest negative impact on buyer demand, and 12% reported a significant negative impact on demand.

Bottom line: the choppiness public builders reported in sales activity in April was more muted for the smaller private players we survey, but sales incentives are running anti-seasonally high and concerns about tariffs making demand/costs worse are held by a significant portion.