A trend is underway... In early October, one builder was offering homebuyers a choice: purchase an inventory home with a rate buydown and closing cost credit or purchase the home at its "cash" price. The far lower cash price of the home had been discounted by the value of the incentives. More builders have jumped on board since, giving buyers a choice. The change in incentives, if widely adopted, will undoubtedly result in some unique discussions surrounding home values and affordability.

The upper end of the housing market is performing better than the lower- and mid-tier segments. Naturally, buyers in this segment are not reliant on low rates. Builders in Scottsdale, Cave Creek, and Carefree are offering relatively low value incentives, and interestingly, seeing healthy demand for fully outfitted inventory homes in the $3M to $4M price range.

New home closing data is a lot less useful today than in past years. Why? The most common incentives offered by builders today- Rate Buydowns and Closing Cost Credits- are not included in closing prices. These incentives ARE significant discounts.