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.

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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
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