Nicole Friedman

And so it's going to be important to watch this spring.

whether we're starting to see a turnaround in that market and if the lower prices there are starting to bring some buyers back.

So this is the major challenge for homebuilders is how to keep their homes affordable for buyers.

And we're definitely seeing an investment in recent years in smaller homes, smaller floor plans that can kind of keep prices lower.

Also, homebuilders have really leaned into incentives.

They're often offering lower mortgage rates for

for home buyers.

So if you look at a big home builder's website, you can often see an advertisement for buy today at maybe a 5% mortgage rate or even under 5%, which is lower than they could get if they bought an existing home.

And so that's a big incentive.

The latest survey from the National Association of Home Builders shows that 2 thirds of home builders were offering incentives of some kind

in February, and about a third of builders cut prices in February.

And this has become a big political topic that the administration is talking to home builders about.

And so the builders are really eager right now to show that they are participating in this process and trying to collaborate with the administration.

So the biggest thing going on right now heading into the spring selling season is that mortgage rates have come down.

And they're about 6% right now.

And so that can make a big difference for a buyer in terms of their monthly payment.

Some builders have said in their recent earnings calls that they started to see more foot traffic in January.

So that can be

an early sign of buyer interest.

But it's a little too soon to say whether that will translate into actually more home sales.