Tri Pointe Homes CEO says Sunbelt new home prices have fallen more than reported
Doug Bauer, CEO of Tri Pointe Homes (TPH), argues that the decline in net effective pricing for new homes has been greater than what is typically highlighted by media reports. He claims affordability isn't currently the main issue holding back demand; rather, it's a lack of consumer confidence exacerbated by recent spikes in oil prices and geopolitical tensions. Bauer estimates that in Tri Pointe’s core markets—those with high-end, supply-constrained properties—net effective new home pricing has dropped 5% to 10% from the peak during the pandemic housing boom. In lower-tier “B” and “C” markets where builders previously chased volume, prices have fallen even more significantly: by as much as 20%. He also notes that incentives offered by builders are playing a major role in reducing effective pricing. The CEO highlights how new home prices now often fall below resale values—a rare occurrence—suggesting the market has already undergone significant price discovery. Bauer emphasizes that while affordability is frequently cited, it's not currently the primary barrier to demand.
Topics: affordability debate consumer confidence housing market new home prices