Responding to the dip in home sales, builders are offering sales incentives and cutting prices to bring more buyers to the market
June 27, 2024
Image: seanlockephotography / stock.adobe.com
Homes are staying on the market longer, causing months-of-supply to increase to 9.3 months in May.
Single-family home sales are once again down. According to housing market platform Zillow, there were 619,000 new single-family home sales nationwide in May, down 11.3% from the 698,000 sales recorded in April and 16.5% below the May 2023 estimate. The median price of new homes sold also dropped 0.9% year-over-year to $417,400 due to high mortgage rates causing sellers to lower prices. This caused the months-of-supply to increase year-over-year from 6.9 months in 2023 to 9.3 months in 2024.
Roughly 1 in 4 builders cut prices to bolster sales in May. However, the average price reduction in May held steady at 6% according to data from the National Association of Home Builders. Meanwhile, more than half of all builders offer sales incentives. Higher inventory points to the potential for more price cuts and more incentives – like rate buydowns – to make the math work for prospective buyers.
