Homebuilders ramp up sales incentives as way to lure buyers
DR Horton, Taylor Morrison expect to offer more perks such as mortgage rate buydowns

Luring homebuyers with cost-saving offerings has been a lifeline for homebuilders as a way to combat high prices and consumer uncertainty — and according to some of the country’s largest builders, incentives aren’t going anywhere.
In their quarterly earnings calls this week, national builders D.R. Horton, PulteGroup and Taylor Morrison reported the need for sales incentives and predicted increased incentives through the year amid ongoing demand for lower prices. The earnings reports gave detailed snapshots of the companies’ performances, revealing pain points for homebuyers and the broader economy.
“New home demand continues to be impacted by ongoing affordability constraints and cautious consumer sentiment. Where necessary, we have increased incentives to drive traffic and incremental sales,” said D.R. Horton CEO Paul Romanowski on Tuesday.
Romanowski's sentiments were shared by each builder. What’s been keeping new home sales afloat is the offering of price cuts, mortgage rate buydowns or other incentives that make homeowners’ monthly payments lower.
Buyers remain wary of the current mortgage rate, which, for a 30-year fixed-rate mortgage, is 6.75% as of Thursday. Mortgage rate buydowns mean builders can offer lower mortgage rates through partnerships with preferred or in-house lenders, easing a major headache for buyers today. Other incentives include closing cost assistance, free upgrades or other perks such as extended warranties. These incentives are applied to poor-performing markets, not across the board, according to the homebuilders.
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