Graphic Language Home Builder Digital Trends Report - Spring 2024

Home Builder Digital Trends Report

Introduction

Graphic Language is a dynamic web design and digital marketing agency that has carved a niche in the homebuilding industry. With a mission deeply rooted in innovation, we take pride in creating digital solutions that drive results. Our team of creative professionals is dedicated to designing engaging websites, executing strategic marketing campaigns, and providing a suite of services that enhance online visibility and sales for home builders.

We’re drawing on our experience in the homebuilding industry to share invaluable insights to help home builder marketers bolster their digital initiatives. Our goal is leverage our expertise and findings to help guide your digital strategy so you can turn prospects into buyers.

Contributors: Chris Ochs, Brea Buffaloe, Teana Halford

Copyright © 2024 by Graphic Language, Inc. All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means without the prior written permission of Graphic Language, Inc.

Digital Trends

What We’re Seeing

Home builders we talk to are constantly looking for the latest and greatest tactics for web traffic and lead generation and we constantly get asked “what is working for other builders”. To that end, we wanted to take a look at the various sources of website traffic and leads as well as the conversion rate for those traffic sources to see what sort of trends can be identified and offer some best practice recommendations.

This comprehensive overview of website traffic and lead data is sourced from markets across the US and builders of various sizes that we work with in some capacity and all data is pulled from Google Analytics (GA4) and aggregated to preserve builder anonymity.

Let’s start by reviewing website traffic trends for Q1 of 2024 vs. 2023.

• “Earned” traffic channels (i.e. traffic that is not part of your paid media plan and includes Organic, Direct and Referral) has seen a bit of a dip from a percentage standpoint in Q1. This isn’t surprising with the 20% drop in overall search volume for new home related terms that we have seen vs. 2023.

• Builders are also relying on Listing traffic (i.e. Zillow, Realtor.com, NewHomeSource.com, etc.) less in Q1 vs. the previous year with a decrease from 6% of total traffic to only 3% so far in 2024.

• With the decrease in overall search volume, builders have started to focus more on top of funnel volumebased traffic drivers in Q1 with increases in Display (up to 9% from 7% in 2023), Organic Social and Paid Social advertising. While these tactics are great for creating awareness and increasing your overall number of website visits, they are definitely complementary in nature and don’t typically drive a high volume of leads.

So as we see search volume decreasing (read more about that in our Organic Search Trends article) and more reliance on alternative paid sources to drive traffic in Q1 2024, what does all this mean for conversions (i.e. web leads)?

Tried and True Methods Continue to Produce:

Even with the decrease in search volume that affected the percentage of both Organic and Paid Search traffic builders saw in Q1 2024, the percent of lead volume coming from those sources actually increased compared to 2023. This means that website visitors from those particular sources were more likely to convert to a lead than they have been in the past. But why would that be?

There are a combination of forces working together. Most importantly, there was a decrease in national average home prices (per Zonda) across a variety of price points. Combined with the still historically low levels of resale inventory, steady interest rates, and continued incentives from builders, new construction is an appealing option for buyers still in the market.

On the digital marketing side, we have seen an increase in adoption of Performance Max advertising campaigns (see our article on Paid Media trends) amongst builders. This particular campaign type utilizes Google’s AI capabilities to serve ads across their various platforms and has proven to produce a high quality of traffic that is more likely to convert than just Paid Search alone.

Display Leads May Be Inflated:

We saw Display ads double in size as a percentage of total leads in Q1 2024 (from 3% in 2023 to 6% this year).

While on the surface of things this might seem like a great opportunity to put your money into a high performing tactic, upon further investigation we saw that this increase was driven by just a couple of specific builders who ran fairly successful promotional incentive based campaigns in Q1 2024 and drove that number up. This would suggest that while independent Display campaigns (i.e. those outside of Performance Max) continue to be useful from an awareness and traffic generation standpoint, they can’t be relied upon as a lead generating tactic without some sort of incentive being promoted.

Conversion Percentage Stays Remarkably Steady:

As you can see in the chart below, overall conversion rate from web visit to lead was the exact same for Q1 2024 versus 2023 at 1.8%. We saw some surprising and significant decreases in Referral, Organic Social and Email conversion rates that offset the increases in Organic, Direct and Paid Search conversion rates in Q1 2024.

Key Takeaways and Q2 Areas of Focus:

• Since Organic traffic continues to be the highest converting traffic type and tends to drive the most lead volume for most builders, a focus on SEO continues to be important moving forward. In order to drive Organic traffic you need to make sure your website is optimized to show up in as many search results as possible to make sure you are getting your fair share of that pie, especially as search volume increases.

• Speaking of increasing search volume, we would expect the natural increase that comes with spring selling season combined with pent-up demand, continued lack of resale competition in many areas, and the potential for a drop in rates will have a positive effect on builder website traffic and lead volume in Q2.

• Give Performance Max a try! If you haven’t started using Google’s Performance Max campaigns in addition to traditional Paid Search then now is the time. We have seen tremendous results utilizing these campaigns for our builder clients (see more detail in this blog post) and more and more builders are giving it a try, so what are you waiting for?

• Mix it up. It is important to make sure you are utilizing a variety of digital tactics focused on the various stages of the buying process and sales funnel. An over reliance on any one activity will result in decreasing performance over time. The most successful builders focus on both awareness tactics (such as Organic and Paid Social, Display, and Geo-Fencing) as well as conversion tactics (like SEO, Paid Search with Performance Max, Listing Channels, and Email) to drive higher volumes of qualified traffic that is more likely to convert to leads.

• Don’t be afraid to spend some money, but do it efficiently. Recently we have seen noticeable increases in search volume for terms like “new construction homes” and “new home communities.” Likewise, competition for these terms has also increased so if you don’t want to get lost in the search shuffle then now is the perfect time to bump up those digital paid media budgets to remain competitive during this spring selling season.

Organic Search Trends

Impact of Interest Rates on Search Activity

Interest rates have long been the bedrock of economic activity, affecting everything from investment strategies to retirement planning. But in the world of real estate, they also influence the affordability and desire for homeownership. In the digital age where home buyers can track rates in real-time and search for properties online, the dance between interest rates and internet search behavior for homes for sale is intricate and revealing.

When the Federal Reserve hints at raising interest rates, it’s not just the stock market that takes notice — housing markets brace for impact as well. Sometimes a rise in interest rates can create a flurry of search activity among prospective homebuyers who are trying to ‘buy now before it’s too late.’ The allure of locking in a lower rate is a powerful motivator — it’s the same principle that drives consumers to buy consumer products ahead of expected price increases.

However, once the initial shock of higher interest rates settles in, internet search behavior can revert. Prospective buyers, after seeing how higher rates will impact their purchasing power, often take a step back, as seen during late Q3 through Q4 2023 where rates rose to a historical high of 7.79% (orange box).

Surprisingly, after the initial recoil, internet search activity for homes for sale begins to normalize and sometimes even rise with slightly higher rates. This recovery suggests that buyers eventually accustom themselves to the new reality of interest rates and are willing to reconsider their plans in this new financial context. The homebuying process is largely a matter of timing, and as with any financial planning, adaptability is key.

It’s important to note that rate hikes don’t just impact the financial component of buying a home; they also play into the emotional aspect. While the job market remains steady, inflation remains a major concern for consumers. The fear of missing out is being replaced by a newfound hesitancy as the idea of taking on a higher mortgage amid the rising housing prices and general cost of living expenses seems less attractive.

We see this going into this Q1 2024: rates are effectively 5.5% higher on average than Q1 2023, with average search volume dropping 20% YoY.

The relationship between interest rates and search behavior provides a compelling perspective to view the dynamics of the housing market. While initial market shifts are expected, the long-term trend demonstrates remarkable resilience and adaptability. Understanding and responding to these cycles is key to navigating the ebb and flow of the housing market successfully.

Paid Media Trends

What’s Working in Paid Media

The home building industry landscape is ever-changing; making staying ahead of the curve essential to succeeding in a seemingly crowded (and noisy) environment. We’re seeing some pretty interesting developments that shake things up over this first quarter - from tougher competition in those Performance Max Campaigns to a lean towards searches that show people are getting serious about buying. These shifts aren’t just small talk; they’re big news for builders looking to stay on their game. Here’s a quick exploration of what we’ve been seeing in our clients’ campaigns this quarter.

Increased Competition in Performance Max Campaigns: With more builders adopting the Performance Max campaign type, the competition has intensified. To stand out in this crowded space, it’s crucial to leverage all available ad space effectively. This includes utilizing various video orientations to capture the attention of your target audience amidst the competition.

Shift Towards Lower Funnel Searches: The observed increase in new home searches accompanied by specific price ranges suggests that users are moving further downthe funnel in their purchasing journey. Builders should tailor their ad messaging and targeting strategies to effectively engage with these users who are closer to making a purchasing decision.

Decrease in Cost Metrics: Google Ads has reported a decrease in both cost per conversion and cost per click across all current clients in Q1. This trend indicates improved efficiency and effectiveness of ad campaigns, allowing builders to achieve their marketing objectives at a lower cost.

Rising Interest in New Construction Homes: There has been a noticeable increase in searches for terms like “new construction homes” and “new home communities” during Q1. Notably, campaigns focusing on “new construction” have demonstrated higher conversion rates than other terms. Builders should consider shifting their focus towards these high-performing keywords to capitalize on this growing interest.

Increased Conversion Rates in Travel-related Audience Segments: Audience segments related to travel, such as Family Vacationers and Luxury Travelers, have shown significant increases in conversion rates for many of our builders. Builders can leverage this trend by tailoring their messaging to resonate with these audiences, highlighting the appeal of their properties for vacation or luxury living purposes or by bidding higher for these audiences.

The paid search trends in the home building industry are not just indicative of change; they are the drivers of it. They’re signaling a shift in how new homes are marketed and sold, where precision, customization, and storytelling reign supreme. These insights underscore the need for builders to adapt and refine their approaches to stay ahead. Home builders who can ride the waves of change will find themselves not just surviving, but thriving.

What We’re Talking About

Creating a Winning Local SEO Strategy

Shed light on the key aspects of forming an effective local SEO strategy. From understanding the significance of local keywords to leveraging the power of Google My Business and managing online reviews, this article is a comprehensive resource for anyone looking to dominate their local market.

Effective Paid Search Strategies for Homebuilders

This comprehensive guide details effective paid search strategies specifically tailored for homebuilders. Valuable for homebuilders looking to enhance their digital marketing efforts, this blog post provides actionable insights for leveraging paid search to drive qualified traffic and generate sales.

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Performance Max Campaigns for Home Builders

Google’s Performance Max campaigns stand out as a revolutionary tool for home builders looking to streamline their online marketing efforts. Dive into the core advantages of leveraging Performance Max campaigns, emphasizing their ability to optimize ad spend across Google’s entire suite of advertising channels.

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Marketing Attribution: A Complete Guide

A deep-dive into marketing attribution that helps builders understand how to trace conversions back to their marketing efforts accurately, offering insights on choosing the right attribution model and using data analytics to fine-tune marketing strategies.

Targeting Home Buyers Through Geofencing

Unlock the potential of local SEO and geofencing for new home builders. This blog post offers insights on leveraging digital strategies like keyword optimization, Google My Business, targeted advertising, and geofencing technology to dominate the housing market.

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Plan Your 2024 Digital Marketing Budget With Ease

Explore the importance of understanding market trends, identifying target audiences, and aligning marketing goals with overall business objectives. Key areas such as website development, SEO, social media, and content marketing are highlighted as essential components of a well-rounded digital strategy.

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What We’re Thinking About

The dawn of the cookieless future has been on the minds of digital marketers since Google announced in 2021 it would begin phasing out support of third-party cookies. For a while many weren’t sure if Google would follow through. However, after a series of delays, it now looks like Google will officially join Safari and Firefox in blocking cookies by mid-2024.

We’re now entering uncharted territory: it’s a big shift, but also a chance to innovate. The big question we’re

all facing is this: Without third-party cookies, how do we keep up the good work in engaging our audiences and getting those conversions?

Why is a cookie-less future such a big deal? Cookies stored in potential buyers’ web browsers contain information about their behavior across the web, not just on your website, that allows builders to accurately target advertising and record conversions. Here’s how you can continue to market effectively post-cookie:

1. Rely On Your First-Party Data: Remarketing is historically a very effective tactic for pushing users farther down the funnel since they have already shown interest in your company. Import your CRM data into platforms like Google and Facebook to create audiences to re-engage with.

2. Enable Conversions APIs: These are new conversion tracking methods that do not rely on browser cookies, but

instead communicate website actions directly from your website’s server to the platform. The two main examples of this are Google’s Enhanced Conversions and Facebook’s Conversions API.

3. Don’t Forget About Contextual Advertising: With all of the focus on cookies, we often forget that there are other ways to relevantly target. Contextual targeting is a powerful alternative for home builders by aligning your ads with the content and context of relevant web pages.

4. Use AI-Based Campaign Functions: Functionality such as Smart Bidding uses internal platform data and contextual signals such as location intent, time of day and search query text to help you reach the right audiences at the right time.

5. Consider Ad Types That Do Not Rely On Cookies: Explore innovative ad formats and platforms that offer effective targeting and tracking capabilities without depending on cookies. One major example of this are CTV ads and geofencing display.

While the phase-out of third-party cookies presents a challenge, it also ushers in an era of innovation and adaptation in digital marketing for builders. By adjusting strategies and embracing new technology and methods, builders can not only survive but thrive in this new landscape. These strategies not only ensure the continuation of effective marketing efforts but also pave the way for more privacy-focused, customer-centric approaches. As the digital marketing world evolves, staying ahead of these changes will be key to maintaining and enhancing engagement

Additional Resources:

• Graphic Language blog post - A Cookie-less Future: The New Future of Digital Marketing

• Google’s Privacy Sandbox

• Neil Patel blog post - What Impact Will a Cookieless Future Have on Digital Marketing?

Boost Your Digital Marketing Strategy in 2024

Need help with your digital marketing strategy? With over 27 years of experience working exclusively with home builders, we know what works. Connect with us to see how we can help fine-tune your digital marketing strategy.

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Thank You

Graphic Language has over 27 years of experience designing websites that convert for home builders just like you. We know how to combine stunning visual appeal with a user friendly experience that will make your website a true reflection of the quality of your new homes and the home buying experience you offer. WWW.GRAPHICLANGUAGE.NET