There’s already a big winner in the 2024 housing market: homebuilders

Want more stories from Lance Lambert’s  ResiClub   in your inbox?  Subscribe  to the free, daily  ResiClub   newsletter .



All things considered, single-family homebuilding industry has been fairly resilient despite the significant spike in mortgage rates over the past two years. At least, that’s the case for the biggest companies in the housing market.



Among the 10 largest publicly traded homebuilders tracked by ResiClub , they collectively recorded 77,255 net new home orders in Q1 2024. This marks an increase of 18% from the 65,376 orders in Q1 2023, when builders were still adjusting their strategies following the 2022 mortgage rate shock.



The total new home orders for Q1 2024 is only 7% lower than in Q1 2021 when these 10 builders had a combined 82,795 net new orders. Not too shabby, considering that Q1 2021 was one of the hottest quarters for builders during the pandemic housing boom.







Big picture: Big builders were able to absorb the mortgage rate shock, offer affordability adjustments like mortgage rate buydowns and outright price cuts in some housing markets, and still maintain profit levels that exceed pre-pandemic norms . That trend is still holding true in early 2024 despite mortgage rates sitting back over 7%.







While, all things considered, single-family homebuilding has shown resilience, multifamily builders haven’t been as lucky. The leading housing market indicators, like permits and housing starts, tell us that once builders work through the historic post-pandemic multifamily pipeline (including an expected 50-year high for multifamily home completions in 2024 ), there will be some degree of deceleration.



Last week , Builders FirstSource—a building materials giant—told investors that it’s already starting to feel the multifamily slowdown.



“As we expected, a weakening multifamily market and higher mortgage rates driving affordability challenges were headwinds to start the year,” wrote Dave Rush, CEO of Builders FirstSource, in the company’s earnings release.