06/04/2026
🏠 Builders are feeling the squeeze.
During the housing boom, many large homebuilders enjoyed record profit margins.
Today, higher mortgage rates have changed the game. To keep buyers moving forward, builders are offering bigger incentives like rate buydowns, closing cost credits, upgrades, and even price reductions.
The result? All 15 of the largest public homebuilders tracked by ResiClub saw profit margin compression year over year.
Some builders are getting very aggressive. Lennar’s incentives now average 14% of the home price. On a $500,000 home, that’s roughly $70,000 in potential value. 💰
At the same time, builders are shifting from speculative construction (“spec homes”) to build-to-order homes, helping reduce risk and improve efficiency.
The lesson? The headline home price doesn’t always tell the whole story. Understanding incentives can make a significant difference when evaluating your options.
I always keep an eye on what the big builders are doing because market trends often create opportunities for informed buyers. 👀