A record 41% of homebuilders are now cutting prices on new homes, marking the highest share ever recorded and signaling deep stress in the housing market.
The data comes from the NAHB/Wells Fargo Housing Market Index, which tracks builder sentiment and pricing behavior across the country on a monthly basis.
The share of builders slashing prices topped 40% for the first time on record, surpassing previous post-pandemic highs that had already raised alarms among housing economists.
The average price discount builders are offering stands at 6%, a figure that held unchanged from the prior month despite mounting inventory pressure in several regions.
Beyond outright price cuts, 65% of builders reported using sales incentives to attract hesitant buyers unwilling to commit at current mortgage rates and price levels.
Those incentives include mortgage rate buydowns, funds toward design upgrades, and contributions toward closing costs, tools builders are deploying more aggressively than at any point in recent memory.
Some builders are going further than others, with Highland Homes offering up to 50% off design upgrades worth as much as $100,000, plus up to $10,000 toward closing costs on select homes.
David Weekley Homes has advertised mortgage rates as low as 4.99% on move-in-ready homes financed through its preferred lending partner, a notable concession in the current rate environment.
Price declines are most concentrated along the West Coast and Sun Belt, where a glut of new homes built during the pandemic construction boom has yet to be fully absorbed by the market.
Austin stands out as one of the clearest examples of supply catching up to and overtaking demand after years of pandemic-driven migration pushed prices and construction volumes sharply higher.
Builders kept adding homes in Austin as demand surged, but once migration slowed and mortgage rates climbed, the economics of that expansion became much harder to sustain for both developers and buyers.
The combination of elevated mortgage rates and rising home prices has left many buyers on the sidelines, reducing the pool of qualified purchasers even as inventory continues to build in affected metros.
Builders face a difficult balancing act, needing to move existing inventory while managing the cost pressures that make deep discounting a threat to their profit margins over time.
The data suggests that price cuts and incentives, while widespread, have so far failed to fully reignite buyer demand at the pace builders had hoped when they began reducing prices.
