Home building is a cyclical business, and after a five-year run of relatively steady growth, many in the industry wonder when the dark side of the moon will appear again ... and when it does, how dark it will be.
Professional Builder’s 2019 Market Forecast, gleaned from a recent survey of our readers, industry insiders, and members of Builder Partnerships, offers a glimpse.
If third-quarter 2018 housing starts numbers are any indication, the dark side is coming into relief. Permits for single-family homes last quarter were off by 10.2 percent compared with the same quarter a year ago, per the U.S. Census data; September sales were sluggish; and, anecdotally, builders report that the fourth quarter offered more of the same.
But optimism still reigns: 56 percent of builders responding to our survey expect to sell more homes next year, and 69 percent anticipate their revenue will increase compared with 2018.
Despite the barriers presented by expensive land, abundant fees, and the rising cost of materials and labor, building homes for first-time buyers again ranked among the top market opportunities—behind custom home and move-up production-built homes, which are the main drivers for home building since the recovery started.
Almost 70 percent of respondents rated this year as “good” or “very good,” and 14.4 percent graded 2018 as “excellent.” More than 75 percent anticipate 2019 will be good or very good, and 14 percent expect next year will be excellent for their companies. For more survey results, see the charts that follow.
- Access a PDF of this article in Pro Builder's December 2018 digital edition