Thirty-six percent of single-family builders reported reducing prices and 59% reported offering sales incentives in November, according to survey data collected by the NAHB. Both numbers are significant increases from July, when only 13% of builders reported they had reduced prices and 43% offered sales incentives.
These percentages may seem relatively high but they are nowhere near as high as they were during the 2007-2008 financial crisis.
Even at 36%, however, the current percentage [of builders offering price cuts] doesn’t seem terribly high compared to May 2007 through March of 2008, when the share of builders cutting prices was consistently 48% or higher—as high as 59% in October of 2007. Among builders who did reduce their home prices, the average reduction was 5% in July of 2022, and 6% in the three surveys conducted since then. In the 2007-2008 crisis period, however, the average monthly reduction in house price was consistently 7% or higher—as high as 10% in February of 2008.
When the question was first asked In May of 1995 [on sales incentives], 74% of builders reported offering sales incentives. The percentage never fell below 50 until July of 2022, when it dipped to 43. Although many builders offer incentives as a matter or routine, the share does fluctuate somewhat in response to market conditions. During the latter part of 2022, the share of builders offering incentives increased from 43% in July to 53% in September and 59% in November. In the 2007-2008 crisis period, however, the share offering incentives was usually well over 70%—as high as 86% in December of 2008.
