(Disclosure: Rose Law Group represents Century Communities, D.R. Horton, Lennar, Meritage, and Taylor Morrison.)
By Vincent Salandro | Builder
Weak consumer confidence and economic uncertainty contributed to softer market conditions for public home builders during the fiscal third quarter. While the desire for homeownership remains strong, prospective buyers are staying on the sideline due to affordability concerns, waiting for conditions to improve.
Builders have successfully been able to attract hesitant buyers with financing incentives and price concessions. In the third quarter, many builders faced a similar phenomena: lower interest rates have been met with a more muted response from buyers than other periods of recent rate declines. As a result, many builders were not able to pull back on incentives even in a cooler rate environment.
Many buyers have not only become accustomed to the price concessions, rate buydowns, and design upgrade incentives offered by builders but are expecting them while they remain uncertain about the overall economy. Given the reality of the current market, many builders anticipate incentives remaining a key element for the sector moving into 2026.
