New Home Sales Surge as Buyers Flock to Builder Incentives Amid Tight Existing Inventory

New home sales surged in September while existing home sales froze due to lack of inventory and high mortgage rates.

Builders are offering discounts like lower mortgage rates and covering closing costs to entice buyers.

Full-term mortgage rate buydowns for the life of the loan are more desirable than temporary buydowns.

Builders are shifting to more spec home construction to avoid costly rate lock fees.

Low existing home inventory is also playing a role in pushing buyers to new construction.