The Wall Street Journal housing blogger Kris Hudson finds that more builders are using sales incentives such as covering closing costs or including free upgrades like premium flooring.
Hudson argues that this benefits the buyers but crimps builders’ profit margins. Housing research firm John Burns Real Estate Consulting Inc.’s chief executive John Burns tells the Wall Street Journal, “Incentives have increased because builders aren’t selling as well as they would like. “Some of the communities pushed prices too far. Rather than reducing prices (outright), they use incentives.”