Mansion Global
If you're looking to get into real estate investing, the thousands of new development homes piling up may offer an opportunity for buying a rental property…or two. Desperate to sell, home builders in the U.S. have been offering mortgage buydowns and other incentives to lure buyers as mortgage rates remain elevated, especially in Southern states where builders have been aggressively adding inventory.
Soon, however, home builders are likely to start to see shrinking returns, especially with construction costs expected to rise as the full effect of the new tariffs comes into effect. "Home builders are pretty much maximizing the incentive they can offer without actually losing money," said Lawrence Yun, the chief economist and senior vice president of research at the National Association of Realtors®.
Meanwhile, existing-home supply is up about 20% compared to last year, Yun noted, so investors have more options. "Buyers can really negotiate down on the prices," Yun noted. "Usually home sellers are less willing to do mortgage rate buydowns. But for the buyers, maybe they can negotiate for lower prices on those existing homes, especially in Texas, in Florida, where inventory levels are pretty much back up to normal."