Skylar Welch, Founder and Managing Partner of Maine Pointe Lending, explains how current mortgage rates, alongside the impact of tariffs and economic anxieties on local businesses, are deterring market activity.https://t.co/FhunT5Fy7R
— Mortgage Professional America Magazine (@MPAMagazineUS) July 17, 2025
In the report, 38% of builders reported price cuts, the highest level since the NAHB began tracking the statistic in 2022. Additionally, 62% of builders reported using sales incentives to encourage hesitant buyers to enter the market. However, market volatility and elevated rates are keeping many on the sidelines.
Battling the headwinds
There was some positive news this week from the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). Mortgage applications for new home purchases increased 8.5% from June 2024.
There was a 4% decrease from May’s numbers, but Joel Kan, MBA vice president and chief economist, believed that the decline was mainly seasonal. However, he acknowledged the ongoing headwinds in the new home market.
“Applications to purchase new homes fell in June, consistent with typical seasonal patterns, but remained ahead of last year’s pace,” Kan said. “A cloudier economic outlook and elevated mortgage rates continues to weigh on potential buyers, while growing inventory, builder incentives, and lower prices have brought some buyers back to the market.
“As a result, we continue to see home sales ebb and flow. MBA’s estimate of new home sales increased to a sales pace of 667,000 units, up on a monthly and annual basis.”