After months of rising cancellation rates and falling sales, home builders are getting back on track this spring, and that rebounding demand is largely attributable to mortgage rate buydowns and other sales incentives. In a December poll by John Burns Real Estate Consulting, 75% of nationally surveyed home builders reported buying down homebuyers’ mortgage rates to make home purchases, and subsequent monthly mortgage payments, more affordable.
While builders aren’t completely halting rate buydowns in a more stable market, several are beginning to rein in generous offers as they build up healthy backlogs of projects for the year ahead, Fortune reports.
“They’re saying in some cases, they’re pulling back a bit on incentives,” [Jody] Kahn said. “In some cases, they’re testing small price increases, say a couple $1,000 on the asking price or list price. And in some cases, [they] are doing both. So they’re taking baby steps because they do not want to see a sudden turn off at the spigot where they’ve gone too far and just completely lost their sales trajectory.”
Advertisement
Related Stories
Affordability
The Disappearing Act That Is Middle-Income Housing
An expert weighs in on the diminishing supply of middle-income housing, which is particularly acute in California, and what to do about it
Off-Site Construction
Utah Passes Bill to Regulate Modular Construction at the State Level
Goals for housing innovation and affordability meet in the Utah's passage of a new bill that establishes a statewide modular construction program
Affordability
Affordability Improves, but the Average Worker Still Struggles to Afford a Home
Homeownership around the U.S. continues to require historically large portions of worker wages, a new housing-affordability report finds