Home sellers sweeten deals

The USA Today reports:

The proportion of home builders who are dangling goodies to buyers — from free swimming pools to granite kitchen counters to vacations — is the highest in at least seven years. The reason was made vividly clear Thursday, when the Commerce Department said new-home sales fell a sharp 3% from May to June.

The sales decline, the first since February, is expected to worsen in coming months, making life harder for those with “for sale” signs in their yards. That's because the number of new homes for sale is up 25% from last year, while the number of existing homes on the market has also soared.

To drive sales, 75% of builders are now offering some kind of incentives to attract buyers, up from 50% who did so last year, according to the National Association of Home Builders. “These builder-developers understand the solution to the slowdown to the market is to quickly liquidate their inventory,” says Ron Peltier, CEO of HomeServices of America.

Excess supply means lower prices are coming.