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
Innovation
IKEA Model Home Aims to Ease the Trauma of Homelessness
Blending innovation with empathy and eco-conscious design, IKEA US unveils a pioneering model home in its Live Oak, Texas, store
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable