05/23/2023
NAHB survey shows incentives have been vital in attracting buyers in this new economic climate.
🏠💡 Interesting insights from the NAHB Eye on Housing Report showing 27% of homebuilders reduced prices in May, 54% of builders offered incentives to boost sales, and 33% of new home listings are presales, up from 13% over the past decade.
While sales incentives are gradually slowing, affordability is still the main barrier to homeownership for many buyers. Affordability manifests as lower online engagement, buyer hesitancy, and reluctance to purchase now.
If affordability is the barrier to home ownership, then financing is the cure. Dollar for dollar, financing is 4x as effective at reducing your buyer's monthly payment than a price reduction. Believe it or not, a mere 1.5% seller credit can create the same payment as a 6% price cut.
A few key points to make effective financing incentives:
1️⃣ The incentive must align with the buyer's financing preferences
2️⃣ There should be a simplified value proposition – if interpretation is required, the incentive becomes less effective
3️⃣ The incentives should be marketed on all channels using a simple value proposition
4️⃣ The sales team should be trained in how to communicate the value of the incentive and overcome primary financing objections
If you want to learn how to leverage these insights and rethink your strategies, please connect with me.
