Housing Demand Remains Steady, But For Long?

78 builders answered the monthly Homebuilder Survey by BTIG/HomeSphere. Here’s what they had to say about sales, expectations, and incentives for March 2022.
Housing demand remains steady but lack of low rates may cause that to change, according to the BTIG/HomeSphere survey

Housing demand remains steady but lack of low rates may cause that to change, according to the BTIG/HomeSphere survey. Photo by Michael Tuszynski from Pexels

In its monthly Homebuilder Survey, BTIG/HomeSphere asked 50-100 builders across the country about sales, customer traffic, and pricing trends in the industry. Seventy-eight respondents shared their insights on what they’ve found in March 2022.


Sales and Traffic

Year-over-year (YOY) sales picked up slightly in March. Almost half of homebuilders (46%) reported an increase in orders YOY vs. the 44% of builders that reported an order increase in February.

Comparatively, some builders (22%) saw a YOY drop in orders vs. twenty-four percent last month and only 8% in March 2021. Nineteen percent of builders saw a drop in community traffic this month, while 21% reported the same in February, and 12% last March.

BTIG reminds readers that the pandemic still has lasting effects on YOY comparisons. Additionally, some builders continue to purposefully slow order to match sales with production capacity, given the tight supply chain environment and other material issues.


According to the March data, traffic relative to expectations remained in-line with February. Sales relative to expectations dropped, on the other hand.

Thirty-four percent of respondents saw sales as better than expected vs. 39% last month, while 17% saw sales as worse than expected vs. 10% last month. 

Just 8% of builders saw traffic as worse than expected vs. 10% last month. The better- minus-worse expectations ratio for both indicators continues to be positive.

HomeSphere, BTIG Research - trends relative to expectations graph
Seventeen percent of builders saw sales as worse than expected in March 2022, compared to 10% last month and 3% in March 2021. Source: HomeSphere, BTIG Research

Pricing and Incentives

The number of builders raising prices increased slightly in March, while the use of sales incentives remained limited and was relatively unchanged from February. Eighty-six percent of builders raised some, most, or all base prices in March from February (95% last March). This is up from 85% last month, but down from the peak of 100% of builders in May 2021.

As for incentives, the change from last month is minimal. Just 8% of builders increased “most/ all” or “some” incentives vs. 9% last month.

Special Question

Each month BTIG asks respondents a unique question. This month, they asked builders about the business impact of higher mortgage rates since the beginning of the year. Over the last three months, more and more builders are saying that high mortgage rates have negatively impacted their business.

HomeSphere, BTIG Research - special question on interest rate graph
More builders are finding a negative impact from rising interest rates in March than February. Source: HomeSphere, BTIG Research

Though nearly half of builders have yet to see higher rates have a measurable impact on business, over 41% of them have faced some negative consequences to the rise in rates.

As shown in the graph above, the trend shows a growing number of builders that feel this way. From 15% in January to 34% in March, high mortgage rates have led to negative impacts like decrease in sales/traffic and order cancellations.


Overall, demand trends remained steady while expectation of sales dropped in March.

The survey also found a slight increase in builders who raised prices compared to the previous month—likely due in part to material costs and shortages.

Carl Reichardt, BTIG homebuilding analyst, notes that demand appears to be generally healthy, but higher interest rates are beginning to have a detrimental impact. He believes that builders continue to benefit from a short supply environment, but absent lower rates makes him expect demand to begin to ease.

To read the entire Homebuilding Industry Report, click the DOWNLOAD REPORT button below.

About The Author

Quinn Purcell, UTOPIA Associate Editor

Quinn Purcell

Quinn Purcell is a graduate of Idaho State University with a Bachelor of Arts in Communication, and an emphasis in Multiplatform Journalism. He specializes in video, photography, copywriting, graphic design, and even music production. He currently serves as Associate Editor for Utopia. When he's not working you can usually find Quinn at a local brewery, or watching true crime shows with his cat.

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