Builders Lean on Incentives as Spring Selling Season Gets Underway
Source: Economics Group of Wells Fargo Bank, N.A.
Summary
Sales Shoot Up In March
The spring selling season for home builders is off to a better-than expected start. New home sales rose 7.4% in March, while February sales were revised slightly higher. The jump looks owed to slightly lower mortgages, which temporarily dipped in March before climbing higher following the Liberation Day tariff announcement in early April.
On a year-to-date basis, sales were up 1.3% compared to the first three months of last year, which suggests sales are still trending positive. That said, the modest growth this year largely is attributable to the South region, and sales in every other region are down sharply. What’s more, a drop in the median new home price suggests builders are increasingly leaning on price incentives in order to support demand.