(Bloomberg) -- Desperate to boost sales, U.S. homebuilders are turning to the last resort: cutting prices.
Forty-one percent of builders reduced prices from late July through early October, up from 26 percent a year earlier, said Rob Dietz, chief economist for the National Association of Home Builders, citing a soon-to-be published survey.
The real estate market has cooled this year as higher borrowing costs cut into affordability for buyers already facing steadily rising values. Builders often try other methods to drive sales first, such as discounting upgrades or buying down mortgage rates. They avoid lowering asking prices because of the potential that cuts may alarm buyers and anger customers who paid more for homes in the same community.
On average, builders said they lowered prices by about 4 percent, Dietz said.
“Price incentives are relatively small,” he said. “But they are still there and growing.”
To contact the reporter on this story: Prashant Gopal in Boston at pgopal2@bloomberg.net
To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Christine Maurus, Rob Urban
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