Fannie Mae recently released its National Housing Survey for Spring 2023. The news is mixed but there are things builders can control. Let’s look at what buyers and sellers are saying, and how you might be able to address their concerns.
- Consumer sentiment rose slightly in March but is still near historic lows.
- There are three solutions you can pursue to address the current buyer mindset.
- 2-10 HBW can help you offer peace of mind and top-tier post-closing customer service.
The good news: Sentiments did increase in March
Overall, consumer sentiments about buying and selling a home increased slightly in March 2023. There were two areas within the survey that saw the biggest increases.
First, consumer sentiments about selling a home increased by 8%. This is likely due to people anticipating higher sale prices, especially as home-selling season begins. This may create an uptick in your profitability if homes rise in value.
Second, fewer people were worried about losing their jobs. The survey showed that about 78% of people said they weren’t in fear of losing their jobs anytime soon. This could encourage people who are in the process of looking for a home to continue.
The bad news: Sales will likely be softer everywhere
While overall sentiments increased, they’re still near record lows. This has experts believing that home sales will be softer across the board.
For example, the Mortgage Bankers Association believes that new-home sales will drop from 643,000 in 2022 to 620,000 in 2023.
While new-home sales may experience a dip, the situation is much more pronounced in the existing-homes space. The Mortgage Bankers Association expects a drop from 5.1 million in 2022 to 4.2 million in 2023. That could create opportunities for new-home builders.
There are several troubling responses that contribute to the soft-sales prediction:
- Mortgage rates are still high, meaning that current homeowners may not be willing to move and throw their current low rates away.
- 79% of respondents said it was a bad time to buy a home.
- Low inventory continues to weigh negatively on potential buyers.
Solutions you can offer
Despite these survey responses, there are things you CAN control. Here are a few strategies you might consider.
1. Set the tone in the market
Marketing your high-quality homes well can make a big difference. Qualified buyers—especially younger buyers like Millennials—will still be searching. And these younger buyers often prefer new construction.
Staying top of mind will be crucial to your success. With the right marketing strategies—along with support from 2-10 Home Buyers Warranty (2-10 HBW)—you can stand out.
2. Offer the right incentives
Buyer incentives are becoming more common, after several years of practically disappearing. For new-home builders, your alliances with mortgage lenders may allow you to offer rate locks or buydowns for buyers, for example.
Just make sure you’re offering the right buyer incentives if you choose this path.
3. Give buyers a reason to believe
On-the-fence buyers may need a little extra push to work with you when times are tough. One way to give them the assurance they need is to leverage your reputation. 78% of people say that they’d be more willing to buy from companies with an excellent reputation.
Finally, quality customer service is crucial when sentiment is low. When potential buyers have a negative mindset, anything that exceeds their expectations can make a huge difference.
So, if you can offer a good customer experience throughout their buying process, it’ll not only help you sell but also increase the likelihood that your buyers will recommend you to others. 2-10 HBW’s Front Line Warranty Service can position you to offer the post-closing experiences your clients expect.
2-10 HBW can help you
Despite low consumer sentiment, 2-10 HBW can help you stand out in the market.
As the industry leader in structural warranty administration, you can leverage 2-10 HBW’s expertise and third-party validation of your quality to protect your bottom line and attract new business.
And with 2-10 HBW’s Front Line Warranty Service, you can provide outstanding post-closing customer service that makes your buyers your biggest advocates.
Learn how you can protect your business and add valuable selling points to your new builds with a 2-10 HBW Structural Warranty.