New home builders cut new home prices at the most consistent pace in decades.
- The decline in sales following the Federal Reserve’s interest rate hikes is expected to slow with the Fed cutting interest rates.
- The drop in new home prices has slowed and buyers looking for a deal are slowly budging off the sidelines.
New home builders are cutting their prices in growing numbers, according to a new study by the National Association of Home Builders. The survey found that 39% of builders cut their prices in September, and many offered incentives to buyers to make home purchases.
The drop in new home prices shows that sales have slowed. The average reduction was 5% during September, the same it has been every month consistently since last November. A sampling of home prices in Fort Myers shows that new home prices have declined an average of 30 to 40 percent from the market’s peak.
National builders like DR Horton and Lennar are also offering buyers a multitude of incentives, including buying down their mortgage rates to make monthly payments significantly lower. The best incentives are being negotiated by real estate agents who represent home buyers.
The use of sales incentives was 65% last month, according to the HMI study. Derived from a monthly survey that NAHB has been conducting for more than 40 years, the study gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”
The HMI index gauging future sales expectations in September rose two points to 45, the highest reading since March of this year. The component measuring current sales held steady at 34, while the gauge charting traffic of prospective buyers posted a one-point decline to 21.
Sales of new homes in the Fort Myers area have slowed substantially during the hot summer months but are expected to pick up as mortgage interest rates decline with the cut in rates by the Fed.
Builder confidence in the market for newly built single-family homes was 32 in September, unchanged from the August reading, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). While builder sentiment has hovered at a relatively low reading between 32 and 34 since May, builders expressed optimism that a more favorable interest rate climate would bring hesitant buyers off the sidelines in the final quarter of 2025.
“While builders continue to contend with rising construction costs, a drop in mortgage interest rates over the past month should help spur housing demand,” said NAHB Chairman Buddy Hughes, a home builder and developer.
New home developments were booming in Fort Myers, North Fort Myers, Fort Myers Beach, Cape Coral, and Naples until the Fed hiked interest rates. The rapid growth of new home development has reshaped the housing market, with more than 110 new developments in the region, offering a wide range of housing options that cater to people of all lifestyles—from retirees looking for a quiet beachfront retreat to young families searching for affordable suburban living.
More than six dozen new home developments are still in some state of development. Fort Myers is one of the most dynamic areas for new home construction in Southwest Florida. The city’s central location, combined with its proximity to popular destinations like Sanibel Island and Cape Coral, makes it an attractive place to live. The city has seen a rise in master-planned communities, many of which cater to young professionals and retirees.
