Rising interest rates slows building sales

Builders are offering new incentives to home buyers as sales slow down and mortgages rise.
2:47 | 09/25/22

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Transcript for Rising interest rates slows building sales
>>> BACK NOW WITH HOME BUILDERS SEEING SALES SLOW DOWN AS MORTGAGE RATES RISE AND WHAT THEY'RE DOING TO TRY TO JUMP START THEIR BUSINESSES. ABC'S DEIRDRE BOLTON HAS WHAT IT COULD MEAN FOR YOU IF YOU'RE A FIRST-TIME HOME BUYER. GOOD MORNING, DEIDRE. >> GOOD MORNING TO YOU. AFTER THE FIRST TWO YEARS WHEN HOME BUILDERS COULDN'T BUILD FAST ENOUGH TO KEEP UP WITH COMMAND, THERE'S A SHIFT IN THE MARKET AND ONE THAT MAY BE MORE BALANCED FOR HOME BUYERS. A BIG CHANGE IN NEW HOME CONSTRUCTION. THE NATION'S HOME BUILDERS SEEING A SLOW DOWN IN SALES. JERRY KONTER SAYS HOME BUILDERS ARE GETTING CREATIVE AS THE POWER DYNAMIC SHIFTS IN FAVOR OF POTENTIAL BUYERS. >> WE MOVED UPSCALE AFTER THE GREAT RECESSION. WE WERE FORCED TO. NOW WE'RE DOING EVERYTHING WE CAN TO BEGIN TO GET BACK INTO THE ENTRY-LEVEL MARKET. >> Reporter: BUILDERS USING INCENTIVES LIKE THROWING IN AN UPGRADE, LUXURY APPLIANCES AND COVERING SOME CLOSING COSTS TO ATTRACT BUYERS IN THIS WEAKENING HOUSING MARKET. >> WHAT WE'RE SEEING TODAY IS THE RETURN OF A BUYERS' MARKET. THIS MEANS THAT BUYERS NOW HAVE NEGOTIATING POWER. THEY DON'T HAVE TO REMOVE ALL THEIR PROTECTIONS WHEN MAKING AN OFFER ON A HOME. >> Reporter: IN THIS ENVIRONMENT YOU WOULD THINK IT WOULD BE EASY FOR WOULD-BE BUYERS AFTER TWO YEARS OF INTENSE COMPETITION. THE FED RATE HIKES ARE HURTING FIRST-TIME BUYERS WHO STATISTICALLY NEED TO FINANCE THEIR MORTGAGES. RASHON IS A FIRST-TIME HOME BUYER. HE SAID HIGHER RATES MADE BUYING A HOUSE VERY STRESSFUL AND IMPOSED LIMITATIONS. >> I HAD TO CHOOSE WHAT WAS RIGHT FOR ME. THERE WAS SOME HOUSES OUT THERE THAT WAS SUPER, SUPER NICE AND I COULDN'T AFFORD IT BECAUSE OF THE INTEREST RATES. >> Reporter: LIKE MANY, RASHON HAD TO READJUST. >> THE HIGHER INTEREST RATES, THE GREATER IMPACT ON YOUR MORTGAGE BEING HIGHER WHICH IS WHAT I FOUND -- I HAD THAT PROBLEM. MY INTEREST RATE BEING 5.6, MY MORTGAGE WAS HIGHER. >> Reporter: FOR THOSE WHO WANT TO BUY IN THIS ENVIRONMENT, THE PROS HAVE THIS ADVICE -- KNOW WHY YOU'RE BUYING A HOME. IF YOUR MONTHLY PAYMENT MAKES SENSE FOR YOUR BUDGET, DO IT. CALCULATE WELL SO YOU DON'T BECOME HOUSE POOR OR TOO STRETCHED FOR THE OCCASIONAL NIGHT OUT. KEEP YOUR CREDIT SCORE AS HIGH AS POSSIBLE SO YOU'LL GET THE LOWEST RATES POSSIBLE. INVESTING IN YOURSELF AND YOUR COMMUNITY, THE MOST AFFORDABLE IN THESE STATES RIGHT NOW, IOWA, INDIANA, OHIO, NEBRASKA, KANSAS. THE MEDIAN HOME PRICE IN THOSE AREAS IS ABOUT $150,000. THAT GIVES YOU A COMPARISON TO SOME OF THE OTHER EAST COAST AND WEST COAST PRICES. >> BETTER DEALS THERE. >> FOR SURE. IF YOU HAVE WORK FROM

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