About a quarter of homebuilders are reducing their prices to attract more buyers as foot traffic falls.
"Buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new-home purchase out of financial reach for many households," says the National Association of Home Builders chairman, Jerry Konter.
More than half of builders surveyed by the National Association of Realtors said they are using incentives to bolster sales, including offering mortgage rate buydowns, complimentary amenities, and price reductions.
But all is not a hardship for homebuilders. In fact, some economists suggest that the stubborn housing shortage could be the saving grace that keeps the real estate market from a severe downturn.
By some estimates, the nation was short about 5 million homes before the pandemic. This leads many to believe that despite the slowdown builders are currently experiencing, the long-term outlook for homebuilders is bright since new housing is still needed to fully relieve the shortage.