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Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter. Speaking to investors earlier this month, D.R. Horton CEO Paul Romanowski said that the spring 2025 selling season for Americas-largest homebuilder is off to a slower-than-normal start. This years spring selling season started slower than expected as potential homebuyers have been more cautious due to continued affordability constraints and declining consumer confidence, Romanowski said on the company’s earnings call. It isnt just D.R. Horton. We do not see the seasonal pickup typically associated with the beginning of the spring selling season,” Lennar co-CEO Jon Jaffe told investors on March. “So we continue to lean into our machine focusing on converting leads and appointments and adjusting incentives as needed to maintain sales pace. These adjustments came in the form of mortgage rate buydowns, price reductions, and closing cost assistance. Last quarter, Lennar spent the equivalent of 13% of home sales on buyer incentivesup from 1.5% in Q2 2022 at the height of the pandemic housing boom. A 13% incentive on a $400,000 home translates to $52,000 in incentives. This weaker housing demand environment is causing unsold inventory to tick up. Indeed, since the pandemic housing boom fizzled out, the number of unsold completed U.S. new single-family homes has been rising: March 2018: 62,000 March 2019: 77,000 March 2020: 76,000 March 2021: 34,000 March 2022: 32,000 March 2023: 70,000 March 2024: 89,000 March 2025: 119,000 The March 2025 figure (119,000 unsold completed new homes) published this month is the highest level since July 2009 (126,000). Lets take a closer look at the data to better understand what this could mean. To put the number of unsold completed new single-family homes into historic context, we created a new index: ResiClubs Finished Homes Supply Index. The index is one simple calculation: The number of unsold completed U.S. new single-family homes divided by the annualized rate of U.S. single-family housing starts. A higher index score indicates a softer national new construction market with greater supply slack, while a lower index score signifies a tighter new construction market with less supply slack. If you look at unsold completed single-family new builds as a share of single-family housing starts (see chart below), it still shows we’ve gained slack; however, it puts us closer to pre-pandemic 2019 levels than the Great Recession of 20072009. While the U.S. Census Bureau doesn’t give us a greater market-by-market breakdown on these unsold new builds, we have a good idea where they are based on total active inventory homes for sale (including existing homes) that have spiked above pre-pandemic 2019 levels. Most of those areas are in the Sun Belt around the Gulf. Builders are facing pricing pressure in some housing markets, especially in key Florida and Texas markets, where active inventory has jumped back above pre-pandemic 2019 levels. !function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}))}(); Big picture: Theres greater slack in the new construction market now than a few years ago, giving buyers some leverage in certain markets to negotiate better deals with homebuilders.
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E-Commerce
Google CEO Sundar Pichai is expected to take the stand on Wednesday morning at a trial in Washington where antitrust enforcers seek an order forcing the company to sell its Chrome web browser and take other measures to boost competition among online search providers. Pichai will testify in the Alphabet unit’s defense against proposals by the U.S. Department of Justice that the company has said would cause unintended harm to browser developers, smartphone makers and internet users. The outcome of the case could fundamentally reshape the internet by potentially unseating Google as the go-to portal for information online. The DOJ and a broad coalition of state attorneys general are pressing for remedies to restore competition even as search evolves to overlap with generative AI products such as ChatGPT. Prosecutors are concerned that Google’s dominance in search could extend to AI. U.S. District Judge Amit Mehta ruled last year that Google, the site and app where most U.S. internet users search for information, “has no true competitor.” Google maintained its monopoly in part by paying billions of dollars to companies including Apple, Samsung, AT&T and Verizon to be the default search engine on new mobile devices, the judge said. The DOJ wants the judge to end those payments and require Google to share search data with competitors. Google has said the proposals would give away its hard work, and jeopardize its users’ privacy and endanger smaller companies like Mozilla, the developer of the Firefox browser, that rely on Google for revenue. The company recently loosened its agreements to allow device makers and carriers to pre-install other search and AI apps, according to evidence shown at trial. Google has said it plans to appeal once the judge makes a final ruling. Jody Godoy, Reuters
Category:
E-Commerce
Shares in coffee giant Starbucks Corporation (Nasdaq: SBUX) are down significantly in premarket trading this morning after the chain announced its Q2 2025 earnings results yesterday after the bell. Those results were described as disappointing by Starbucks’s own CEO, Brian Niccol, and demonstrate that the companys turnaround efforts still have a long way to go. Here’s the latest on Starbucks and what has investors nervous: Starbucks Q2 2025 results below expectations In January of this year, Starbucks announced its Q1 2025 earnings, in which it beat Wall Street expectationsa small win for the company and for Niccol, who joined as CEO from Chipotle Mexican Grill in the summer of 2024. But its not a win that was repeated in the companys second quarter. Yesterday, Starbucks reported earnings for its Q2 of fiscal 2025. That quarter had 13 weeks in it and ended on March 30. Unlike the previous quarter, Starbucks did not beat Wall Street expectations. Wall Street analysts had expected revenue of $8.83 billion and an adjusted earnings per share (EPS) of 49 cents, according to Yahoo Finance. Instead, Starbucks posted the following: Revenue: $8.76 billion Adjusted EPS: 41 cents But the revenue and EPS miss isnt what seems to be rattling investors most. That would be Starbuckss disappointing comparable sales results. Comparable sales are a metric that looks at the sales of the same stores that have been open for at least a year. If comparable sales are increasing, thats a good sign as it means the same stores are bringing in more customers, larger orders, or both. But if comparable sales are down, it suggests lower foot traffic or that customers are reducing the amount of money they spend at the store. Unfortunately for Starbucks, comparable sales in U.S. stores that have been open for at least a year fell during Q2and it was the fifth straight quarterly fall of U.S. comparable sales. Starbucks says that U.S. comparable store sales declined 2% during the quarter, and U.S. comparable transactions were down 4%. It was a little better in China, however, which is the companys second-largest market after the United States. In China, comparable sales were at least flat quarter-over-quarter. But you would be right to wonder if flat comparable sales in China could get worse, as consumer sentiment across the globe is increasingly becoming anti-American due to President Trumps trade wars, which are leading to economic strife with America’s largest trading partners. Niccol seemed keen to paint a rosy picture of Starbucks’s operations and future in the country. As noted by Yahoo Finance, the Starbucks CEO said on the companys earnings call yesterday, I want to be clear that we remain committed to China for the long term. We see great potential for our business there in the years ahead, and remain open to how we achieve that growth.” Back to Starbucks”. . . or not Late last summer, Niccol was brought on board at Starbucks as its new CEO in order to turn the struggling chain around. As part of that turnaround, Niccol unveiled the Back to Starbucks plan in which he implemented a number of changes, including a simplified menu and a controversial no-loitering policy. However, Starbuckss latest Q2 results and the companys continued decline in comparable U.S. sales will leave many industry watchers wondering just how well that Back to Starbucks plan is working. Niccol himself acknowledged that Starbuckss Q2 results are disappointing, but quickly noted that “behind the scenes we made a lot of progress and have real momentum with our ‘Back to Starbucks’ plan, according to Yahoo Finance. Niccol also addressed the plan directly in the companys official earnings release, saying, My optimism has turned into confidence that our ‘Back to Starbucks’ plan is the right strategy to turn the business around and to unlock opportunities ahead. He added: “Improving transaction comp in a tough consumer environment at our scale is a testament to the power of our brand and partners getting ‘Back to Starbucks.’ We are on track and if anything, I see more opportunity than I imagined. SBUX stock sinks However, while Niccol might see more opportunity, investorsfor today at leastseem to have a hard time imagining the same. As of the time of this writing, Starbucks stock is now down over 8% in premarket trading to $78 per share. SBUX shares had closed yesterday up about 1.1% to $84.85 before the company announced its Q2 results. Year to date, Starbucks shares were already down over 7% as of yesterdays closebefore todays further 8% premarket drop. As of yesterdays close, shares were also down nearly 4% over the past 12 months.
Category:
E-Commerce
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