As the homebuyer credit deadline looms, builders are ramping up incentive offers to lure buyers faced with stiff competition from distressed sales. The pipeline of foreclosures has discouraged construction across the US leading to near record lows in new housing inventory. See the following article from Housing Predictor for more on this.
In a major effort to energize the housing market new home builders are aggressively offering buyers incentives to get into the market. The home buyers federal tax credit expires April 30th, and the last thing builders want to see is a slump in home sales as a result.
Builders are offering free options and upgrades, credits for closing costs, furniture and appliances to get buyers to sign the dotted line. The momentum to keep new home sales moving is near a critical juncture for the new home market.
The incentives may not be as good as the resale market, but since new home builders, especially large corporate builders, have more leeway in their pricing they can slash home prices more aggressively to win over buyers heading into the summer buying season.
“Incentives don’t disappear even in the best of times,” said Steve Melman, director of economic services of the National Association of Home Builders. For the first time in more than a year this month’s builders index showed a move in a positive direction. However, new building starts are still substantially under previous years due to the over-supply of lower cost foreclosures in many areas of the country.
The over supply of new homes idling on the market in subdivisions that are waiting for bankers to finalize foreclosures adds another dimension to new home builders issues. However, those that are counted in the builders’ official survey showed new home inventories at their lowest level in 40 years. Many builders have stopped building altogether.
National home builder Ryan Homes is offering an $8,000 package in its developments throughout many states for closing costs and other customer credits. Florida based Lennar Homes is giving away washers and dryers with their new homes and cut rate closing costs in some financing packages.
Brookfield Homes is covering buyers in California closing costs for purchasers willing to sign the bottom line, and move into one of its new home communities.
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.