Can you believe Q1 2025 is already in the rearview mirror? It feels like just yesterday we were diving into last year’s Q4 SEM and PPC performance. The SEM and PPC metrics from the first quarter of 2025 paint an interesting picture of the current real estate market. While the overall pool of active homebuyers appears more selective than usual for this time of year, the individuals who are searching are showing strong intent and a readiness to navigate the buying journey. Interestingly, campaigns focused on broad awareness and demand generation have seen a dip in traction, suggesting that current market uncertainties are causing some potential buyers to pause their initial exploration.
Leveraging data from our partnerships with over 90 home builders nationwide, we've meticulously aggregated and weighted these benchmarks by click volume to provide you with the most accurate industry insights.
Before we jump into the data, it’s important to understand how these metrics work with each other and can be influenced by outside factors. I have provided ranges instead of a concrete number for each metric below. Your market and your product greatly influence metrics such as CPC & CTR. A builder with communities in a highly competitive market, like Austin, can expect to have considerably higher CPC than a builder in a smaller market with less builder competition. The same goes for CTR; if your homes are within the higher price point for your market, you can expect to have a lower click-through rate from your ads in most instances.
A balance must be struck between maximizing efficiency on paid platforms and achieving the builder's overarching business objectives. While efficiency is crucial, there will be instances where a more aggressive approach is necessary to meet sales targets. Ultimately, fulfilling the sales plan remains the priority.
Let's explore these benchmarks, analyze the data, and see what the next quarter might bring.
We saw some pretty wide variations with Google Search CPC in the first quarter. Overall, the average CPC is up about 19% since the end of 2024, but what's interesting is that the range of those changes is also bigger. Builders in less competitive areas aren't seeing as much of a jump, with their CPCs only going up by about 2% on average. Where builders contend with national brands with less rigid budgets, larger players with high budgets, or simply a high density of builders; things have gotten even more intense in the last few months, pushing CPCs up more as builders try to keep their share of the traffic.
It looks like these higher CPCs are probably going to stick around for the next quarter, and they might even go up a bit more. You can't ignore the fact that there's a lot of uncertainty in the market right now. With fewer people actively looking for new homes, builders will likely need to bid more aggressively to get the same amount of traffic.
Even though builders might be seeing higher CPCs, it's good to see that Click-Through Rates have stayed pretty stable since the end of last year. Actually, our overall CTR is up a little bit, around 1% across the country. That's a nice sign, because when CPC goes up and builders are trying to grab more of the searches out there, CTR often tends to drop.
So, even if there might be fewer people actively searching, the fact that our CTR isn't falling tells us that the folks who are searching are really serious about it.
Google Display CPC has maintained a consistent level compared to last quarter, demonstrating its stable cost-effectiveness. We're observing a clear strategic shift among builders, moving away from a primary focus on sheer traffic volume towards attracting higher-quality leads. This doesn't diminish the proven value of Display campaigns. They remain a powerful tool for establishing strong brand awareness when entering a new market and are exceptionally effective for re-engaging prospects who have previously interacted with your website.
I am not surprised to see Display CTR drop as we enter 2025. On average, we're looking at about a 6% drop compared to last quarter. There are two main things causing this:
First off, Q4 usually sees a bunch of those year-end promo campaigns, and those tend to get higher click-through rates.
Second, with the market feeling a little shaky, it's tougher to get people to take action when they're still just browsing and not quite ready to buy. That's just the nature of Display ads reaching folks earlier in the process.
I expect these trends will probably stick around for the next few months.
Following the holiday period, we observed a temporary decrease in CPC on Meta. While the average CPC for the quarter remains approximately 2% lower than the preceding quarter, we are noting this start to trend upwards as we transition into the Spring Selling Season. This suggests a potential increase in competition within the advertising landscape as buyer activity accelerates.
Just like we see with Google Display, Meta tends to reach people earlier in their home-buying journey. With the market feeling a bit uncertain right now, that can lead to lower Click-Through Rates (CTR) on our ads – in fact, our overall CTR is about 2% lower than it was last quarter. Plus, the CTR really depends on what the campaign is trying to do. For example, a community in a less popular spot or with higher prices will probably see fewer clicks. When builders need to boost sales in communities that aren't hitting their goals, we often see the overall CTR dip as a result.
If your CTRs are lower than what we'd expect (and maybe even lower than that 2% decrease we're seeing overall), it's a good idea to take a look at what you're advertising. You might need to accept lower CTRs for a while to get traffic to communities that need the attention. (But don't forget to check your ad copy too!)
That wraps up our look at the Q1 2025 SEM and PPC benchmarks. It's a dynamic market out there, and these insights highlight key trends to keep in mind.
Looking ahead to Q2? We're already tracking how the spring selling season is impacting performance. Expect our next benchmark report in a few months, where we'll dive into those numbers and see what the evolving market brings. Stay tuned!
