Following the pandemic housing boom, builders are adjusting to softer market conditions by offering price cuts or incentives. Notably, KB Home argues that competitors using incentives like mortgage rate buydowns may lead buyers to overpay for houses, locking them into inflated prices that could hinder future resale value. This caution reflects a strategic shift towards transparency in pricing, as seen in KB Home's approach, highlighting the importance of market evaluations and compelling value propositions for homebuyers in today's market.
Some buyers turning to competitors are effectively overpaying for new builds just to get rate buydowns, potentially leading to being upside down when they sell.
KB Home's COO highlighted the risks of overpaying for homes that include incentives, as these inflated prices can trap buyers in a cycle of financial loss.
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