• Key Insight: Why homebuilders are slashing prices at rates not seen since at least 2020.
• Supporting Data: The average home price cut remained at 6% for the seventh consecutive month.
• Forward Look: Lenders should leverage builder concessions and rate locks to attract sidelined buyers.Overview bullets generated by AI with editorial review.   

Guild Mortgage and CrossCountry Mortgage have built new-construction lending programs designed to win business when homebuilders discount, and builders are now discounting more than they have since at least 2020. Lenders without a builder strategy of their own risk losing those buyers to rivals that have one. The National Association of Home Builders' latest monthly housing market index revealed 43% of builders lowered prices in October, the highest share since at least 2020. 

Guild offers a specialized suite of new construction loans. Its StrongStart program allows builder incentives to pay the buyer's interest for the first five months. CrossCountry operates a dedicated builder division, providing forward commitments, custom closing cost concession programs and one-time-close construction loans.Both lenders offer extended rate locks and temporary rate buydowns as well, according to their company websites.

Other lenders, such as PrimeLending, that have joint ventures with homebuilders also stand to benefit from targeted marketing.

The average home price cut remained at 6% for the seventh consecutive month, while 65% of builders reported using sales incentives in October, the 19th month in a row of at least 60%, the survey found.

Despite a potential opportunity for lenders, builder confidence in the market for newly built single-family homes fell three points to 29, the worst reading since June 2012. The overall sentiment was dictated by a two-point drop to 33 in current sales conditions, a five-point decrease to 32 in sales expectations in the next six months and a five-point plummet to 18 in traffic of prospective buyers, according to the survey.

A reading below 50 indicates more builders see conditions as poor than good. The index has been below that level for more than two years.

Rising mortgage rates, worsening labor conditions and increasing construction costs were the driving forces behind the historically-low confidence. Despite persistent demand, buyer traffic reached its lowest point since April 2012, excluding April 2020, the survey found.

The 30-year fixed-rate mortgage remained at 7.4% last week after nearly climbing a full percentage point over the last two months, according to Freddie Mac.

Additionally, more than 33% of builders nationwide reported immigration enforcement activity in their market over the past month, creating construction delays and discouraging legal workers from clocking in. The association recently took a rare stance against the Trump administration and its immigration policy, citing its negative impact on the housing market.

But the administration's efforts to remove regulatory barriers helped ease some of the cost pressures builders faced, the survey showed.