Home builder says housing demand has 'improved significantly' as rates moderate.

NEWS EXCERPT: Homebuilder KB Home (KBH) signaled in its quarterly earnings report this week a "significant" improvement in homebuyer demand as mortgage rates have moderated, pointing to a strong start to 2024 for the US housing market.

"As interest rates have now declined since the end of our fiscal year, demand has improved significantly," Jeffrey Mezger, KB Home president and CEO, told analysts on a conference call this week.

OUR TAKE: Even with mortgage rates fluctuating from week to week and not yet consistently trending downward, new home builders can deploy a variety of marketing tools to stimulate new buyers and get hesitant buyer 'off the fence' including low- for no-cost features (such as a "no-cost half-bath in the basement", we saw recently), or "$20,000 toward closing costs" that is now available in some cases, and other offers we've witnessed at Builders in recent weeks.

In fact, Builders could even escape being caught with too many 'spec homes' (home Builders build in bulk (prior to selling, usually) using a variety of ‘off the shelf’ combinations of popular colors and features) as the buyer demands return and increasing Builder’s profitability which relies substantially on having buyers choosing ‘upgrades, premium building lots (corner lots, cul-de-sac lots, water views, etc), structural upgrades, high tech upgrades, finished basements, decks and more — all driving up selling prices and profitability.

(Read news source here.)

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