In a recent NAHB survey, the vast majority of builders said they were allowing non-construction employees to work from home, but they were also implementing several measures to allow them to continue selling homes during the coronavirus pandemic. The most common of these is private showings of model homes, but online and drive-through closings are also being offered.
This information was collected through a question added to the survey for the April 2020 NAHB/Wells Fargo Housing Market Index (HMI). The question listed eight possible measures and asked the single-family builders in the HMI panel if they were currently doing each, or planned to do it in the near future, in response to the coronavirus. At the top of the list, 84 percent of builders were allowing non-construction employees to work from home or planning to do so in the near future. According to a study published by NAHB last year, the average single-family builder has between 5 and 6 non-construction employees.
As noted above, of the measures designed to allow builders to keep selling homes under the effects of the pandemic, private showings of model homes is the most common, with 59 percent of builders saying they are doing this already or planning to in the near future, but significant numbers are also offering online closings or other services (46 percent) and offering drive-through closings or other services (34 percent). All of these are attempts to keep selling homes while adhering to a form of social distancing.
Consistent with the decline in housing starts reported yesterday, 48 percent of builders are halting construction in some or all of my projects. So far however, a significantly smaller 25 are laying off or furloughing employees. What happens to these percentages in the future depends on the duration of the virus-induced shutdowns, of course, as well as the effectiveness of policies to mitigate the shutdowns’ effects. These include loans to provide needed funding to small residential construction businesses, and the number of states that classify residential construction as an essential business during the shutdown.