Home builders are rolling back prices to bring more buyers to the closing table this fall. Thirty-eight percent of builders reported cutting home prices in October, with the average price reduction rising to 6%, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index.
The cuts are narrowing the gap between new and existing homes: The median new-home price was $413,500 compared to $422,600 for existing-home sales in August. Economists call this an unprecedented pricing shift, as new homes have historically sold for much more.
While existing-home prices continue to edge higher each month—albeit lately at a slower pace—more builders are turning to price reductions and smaller floor plans to reach buyers who feel priced out.
What’s more, 65% of builders said they turned to additional incentives this month, such as mortgage rate buydowns or upgrade packages, the survey shows.
Builders are hopeful for stronger sales as mortgage rates have recently declined—a sentiment echoed in the existing-home market.
Still, “while recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging,” says Buddy Hughes, NAHB’s chairman. “Most home buyers are still on the sidelines, waiting for mortgage rates to move lower.”
Freddie Mac reported that the 30-year fixed-rate mortgage fell to an average of 6.27% this week—a notable drop considering rates averaged around 7% at the start of 2025.
“Homeowners have noticed these consistently lower rates, driving an uptick in refinance activity,” says Sam Khater, Freddie Mac’s chief economist. “Combined with increasing housing inventory and slower house price growth, these rates also are creating a more favorable environment for those looking to buy a home.”
It could pay off this fall: A recent report from Realtor.com® pinpointed mid-October as offering the most favorable conditions for home buyers of the year—a mix of more listings, lower prices and less competition. The National Association of REALTORS®’ latest Pending Home Sales Index, a forward-looking indicator based on contract signings, showed late-summer momentum, with signings up 4% annually in August—a hopeful sign that they could translate to stronger home sales conditions this fall.
