Throughout the past several months of a housing slowdown, builders have reduced their prices and offered sales incentives at an accelerated pace in order to motivate homebuyers to forge through unfavorable market conditions. By November 2022, 36% of single-family home builders reported reducing their prices, and 59% were offering sales incentives to priced out buyers, NAHB reports.
Despite an uptick in purchasing deals and price drops, today’s builder incentives pale in comparison to reductions recorded from May 2007 through March 2008, when the share of builders slashing prices was consistently 48% or higher before reaching a peak of 59% in October 2007.
Among builders who did reduce their home prices, the average reduction was 5% in July 2022, and 6% in three subsequent surveys conducted through November. In the 2007-2008 crisis period, however, the average monthly reduction in house price was consistently 7% or higher — reaching 10% in February of 2008.
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