Single-Family Builders Turn to Incentives to Improve Sales and Limit Cancellations

According to a May 2020, National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) survey more than half (52%) of single-family homes builders who responded to the poll reported that they are using some form of incentives to improve their sales and/or to limit buyer cancellations. Incentives ranged from: 1) options or upgrades at no, or a reduced cost. 2) Payment of closing costs or fees on behalf of the buyer. 3) Price discounts/ margin reductions. Most builders are reporting that option 2, the payment of closing costs was by far the most effective tool. Of course, that means that 48% have not used incentives as a tool for sales.  As a point of reference during the last housing recession May 2007 to March 2008, almost 73% of all builders used incentives.