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  • Prices of New Houses -15% from Peak on High Inventories. Sales Held up with Lower Prices & Massive Mortgage-Rate Buydowns

Prices of New Houses -15% from Peak on High Inventories. Sales Held up with Lower Prices & Massive Mortgage-Rate Buydowns

October 26, 2023

by Wolf Richter Wolf Street

What homebuilder PulteGroup said about mortgage-rate buydowns. Homebuilders have figured out this market, homeowners have not.

To sell new houses in this 8%-mortgage environment, homebuilders – whose stocks have gotten battered since August – have resorted to mortgage-rate buydowns through their own mortgage companies. Earnings calls are now all about those buydowns and their costs, including PulteGroup’s earnings call yesterday which is currently buying down 30-year 8% fixed-rate mortgages permanently to 5.75%.