Update: Homebuilder Incentives [Housing Tracker]

 

Home Builders Using Tax Credits To Woo First-Time Homebuyers. “Some companies, such as Lennar and Pulte Homes (PHM), are matching the $7,500 federal loan by lowering the price by that amount. Holiday Builders is offering the choice of a $7,500 discount or a 5.75% fixed-rate mortgage to qualified buyers. Arlington-based Wall Homes is speeding up plans to introduce a line of $90,000 starter homes to catch some of the new interest from first-time buyers, said Steve Wall, founder and CEO.” (Star Telegram, Aug. 26)

No Down Payment? Still No Problem -- At Least For Now. “Desperate Southern California homebuilders are in full liquidation mode…It may be working… Industry research firm Metrostudy: Finished vacant inventory of new homes declined in Q2. Still, the supply of vacant developed lots stands at a 10-year high. Yet it is curious to see that some builders are still resorting to the no-money-down lure. D.R. Horton (DHI), which specializes in entry-level housing, and Lennar Corp. (LEN) have been quite brazen in their campaigns… having relied on… down-payment assistance -- to boost sales… In Horton's case, 21% of loans made through its mortgage arm in Q2 were with (FHA-backed) seller-funded DPA.” (LA Times, Aug. 24)

Lennar Showcases Models. “Lennar Las Vegas will be reopening 17 models in eight neighborhood across the Las Vegas Valley with homes to include more features and upgrades. Lennar's new Welcome Home Centers will be open Saturday and Sunday to showcase the changes in their new models with pricing improvements.” (Las Vegas Business Journal, Aug. 23)

Meritage Homes /Alliance. Texas: "Qualified buyers who purchase a completed home by Sept. 15 and finance with MTH Funding are eligible for both a zero down payment and $5,000 in closing costs, so the majority of our buyers pay no out-of-pocket costs," said Curt Fletcher, Meritage (MTH) community sales manager. "But the government is ending the federal Down Payment Assistance Program next month.” (Star Telegram, Aug. 23)

Meritage Homes | Crowley ISD. Texas: “Qualified buyers who contract by Sept. 15 to build on one of Meritage Homes’ three remaining home sites at Parks of Deer Creek will receive a free Silver package of upgrades valued at $26,000. Or, buyers can save $20,000 with special closeout prices on two recently completed homes… Qualified buyers who finance with MTH Funding will also receive a $2,000 credit toward closing costs.” (Star Telegram, Aug. 22)

Homebuilders: Buy Now, We'll Throw in a Car. “Builder Reshetar Homes offers a housewarming gift... a 2009 Toyota Prius.  Sales manager Megan Reshetar: "We've offered lots of incentives in the past like finished basements and custom lighting, but with this development a Prius seemed right on target. Springtown Knolls homes are built with the standards of the U.S. Green Building Council, so if we were going to offer a car, it had to be a hybrid." So far, only two of the 20 homes have been sold… NAHB: During 2006, 45% of its members offered incentives... In 2007, the figure jumped to 56%. Estimates for this year are sure to be higher.” (The Street, Aug. 22)

 

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Comments

[David Martin:]

It is clear that the offer to support FME is being used to continue imprudent lending, and the taxpayer will foot the bill.
It is also clear that the small increase in housesales is entirely due to this practise, and that no bottom is in sight for the market.
As unemployment hits the second wave of price falls should hit, moderated of course by the US massively increasing the national debt and throwing taxpayers money away.

2008 Aug 26 08:22 AM