It’s not good news.
Many... (Most?) new home builders are giving away huge incentives to purchase new houses. Those incentives include HOA fees covered for a year or more, X number of months of no payments, closing fees paid, or extras thrown on like a spa, covered patio or deck, etc.
I deal with the insurance side of things and this is what I’m seeing.
The majority of new build homes on the market now broke ground 6-12 months ago, which was before rates shot up. In order to move the stock you have to offer the extras that an existing home can’t. Either way, it’s not good news since the builders are cutting their profits back by huge amounts and many will not be able to continue building after paying off the loans they have.
Part of what is happening this year is the competition for the cash buyer. There are still some cash buyers or others unaffected by the higher interest rates and they have to have a house when you need one. If you are selling you want to get snapped up by one of those buyers without cutting your base price.
Good post.
That is why “price” data can be very misleading.
Rents have the same issue—in declining markets months of free rent or other extras are thrown in—so the stated rent is not the real rent.
Lumber futures are in the range where they were back in the mid to late 90s and certainly back where they were in ‘17 and ‘18 but the price at the lumber yard has not gone down accordingly and probably won’t. Somebody is taking home a lot of loot.