52% of Builders Used Incentives to Bolster Sales in May 2020

As the coronavirus continues to effect industries across the country, the real estate and homebuilding industries have been adapting to numerous challenges.

From NAHB’s Eye On Housing –

The NAHB/Wells Fargo Housing Market Index survey conducted in May 2020 reveals that 48% of single-family builders are not using incentives to bolster sales and/or limit cancellations. This of course implies that slightly more than half, 52%, are using some kind of incentive to achieve that objective.

What specific incentives are they using? Figure 1 shows the complete list, but the three most likely are:

• Options or upgrades at no or reduced cost (19% of builders report using)
• Payment of closing costs or fees (19%)
• Price discounts/Margin reductions (18%)

Importantly, builders who are using incentives report that paying for closing costs/fees is the most effective strategy, with 27% rating it ‘very effective’ and 56% ‘somewhat effective.’

To Read More about the Survey – click here. 

From this survey it is clear that some incentives have been effective in the retail market. What that will do to builder bottom lines and the market overall has yet to be seen. We are happy to see that there is momentum within the industry and believe, especially for our Connecticut community, we will have more families and individuals looking for suburban homes as the work-from home movement increases in popularity.