Homebuilder incentives are back

It's become a buyer's market again as rising interest rates (now compounded by the D.C. budget stalemate) hit new home sales. "I think there is a weakness in the market right now," says homebuilder Mark Ward. "Everybody's giving more incentives today than they were in the summer."

It's a big turnaround from this spring, when builders were scaling back incentives and instead raising prices by double-digit amounts. A Wells Fargo survey has 29% of respondents saying they're increasing use of incentives, double the amount of  year ago.

Lennar (LEN) cautiously admitted to boosting incentives on a "select" basis during its earnings call (transcript) last month, suggesting lower margins for the entire industry.

Homebuilder ETFs: XHB, ITB, PKB.

From other sites
Comments (1)
  • Darren McCammon
    , contributor
    Comments (4005) | Send Message
    With a very high % of their homes sold to government employee's and government contractors, NVR is going to have a bad quarter.
    15 Oct 2013, 02:19 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs