Homebuilders Are Reinvesting Profits to Offer 5% Interest Rates
The Wall Street Journal reports that homebuilders such as D.R. Horton and Lennar have been recycling profits back into their businesses by subsidizing loans for buyers, offering mortgages at 5% to help move inventory. However, even with the lower rates, buyers are still struggling to come to the table.
According to the Journal, as of March, builders have more completed but unsold homes than at any time since 2009, when the financial crash decimated markets and mortgage approval rates. And at the end of last year, says the National Association of Realtors, people buying their first homes were around 38 years old, approximately a decade older than in previous generations. These first-time buyers had a median household income of $97,000 and put a 9% down payment on their property.
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