Leading builders are responding to softening demand, greater consumer fear, and rising cancellation rates with increased financial incentives and differing sales approaches.

After a two-year period where it was not possible to build homes fast enough to keep up with demand, rising interest rates and ongoing affordability concerns have begun to temper demand in the housing market. Zonda’s most recent New Home Pending Sales Index indicated new-home contract sales in June were back to 2019 levels, with some markets, including Phoenix, Salt Lake City, and Las Vegas, performing below 2019 sales levels. Additionally, the supply of new homes relative to sales in June was the highest since 2010. While 2019 was a strong year for housing overall, the shift from the highs of 2020 and 2021 are impacting overall builder sentiment and strategies required to navigate the new market.