Spec Houses Take Longer to Sell – NMP Skip to main content

Spec Houses Take Longer to Sell

Aug 26, 2025
Spec Home Sales Lagging
ChatGPT / OpenAI
Staff Writer

Builders offering incentives to move inventory as they proceed more cautiously with new projects

The supply of spec houses finished but unsold is rising — a sign that the new home market is struggling to remain in equilibrium.

The number of inventory houses, also known as quick move-ins, returned in July to a level last seen in late 2022, another period shaped by economic uncertainty and rate volatility, according to Zonda, a marketing and analytics firm that tracks 85% of new construction throughout the country.

Builders often start construction before they have signed contracts so they can have inventory on hand for buyers who need to move quickly. But when they have too many houses on hand, the carrying costs become burdensome.

To manage the increase, Zonda found that many builders are “finding the market” by offering incentives and pricing discounts. Sometimes, the cuts are substantial. At the same time, they are being extra careful about starting new spec houses — at least until demand shows some clear signs of improvement.

“For many consumers, QMIs [quick move-ins] provide a great alternative to resale supply,” said Zonda Chief Economist Aly Wolf, “given they are brand new and often come with builder incentives.” 

“These homes aren’t flying off the shelf as they once did, though, so builders are being more cautious on new starts,” Wolf noted.

Zonda’s monthly snapshot also found that projects are no longer selling out faster than they can be replaced. The Irvine, Calif.-based company tracks 16,596 communities that are actively selling. That’s up 10% from last year.

“The national community count is up for the 8th consecutive month,” the company reported.

Pricing, meanwhile, was a mixed bag. For the first time since January, two price tiers increased. While entry-level houses dipped 1.1% to $325,690, move-up houses rose 0.4% to $518,194 and high-end places went up 2.6% to $923,048.

“While the price increases seem counterintuitive to reality, the rise could be a result of new communities opening at higher prices given land and construction costs,” Zonda explained.

In another survey, Zonda found that a third of all builders lowered prices in July, 61% held prices flat, and 6% raised prices. In June, by comparison, 39% of builders lowered prices month-over-month, 59% held prices flat, and only 2% increased prices.

Incentives are still common as builders try to address affordability constraints affecting their customers. In July, 58% of their communities offered incentives on to-be-built homes and 77% on quick move-in supply. But the use of incentives could be far greater, because these figures include only publicly advertised giveaways.

Overall, July’s new home sales were sluggish but steady. “Sales activity was flat month-over-month,” said economist Wolf. “For some builders, though, describing the market as ‘average’ may feel too generous as they continue to grapple with tighter margins, rising marketing costs, heavier incentive usage, and stronger competition.”

On a seasonally adjusted annualized rate, there were 668,318 new homes sold in July. That’s even with June’s rate but a decline of 6% from a year ago. On a non-seasonally adjusted basis, 56,928 homes were sold, 5.6% fewer than last year but 6.8% above the same month in 2019.

Zonda also counts pending sales, which were off 9% from a year ago. But on a month-to-month basis, seasonally adjusted new home sales increased by 1.4%.

About the author
Staff Writer
Lew Sichelman has been covering the housing and mortgage sectors for 52 years. His syndicated column appears in major newspapers throughout the country.
Published
Aug 26, 2025
New-Home Mortgage Demand Slips Despite Widespread Builder Incentives

Applications fell 5.7% annually in July, while government-backed mortgages accounted for half of builder-affiliated loan volume

Aug 21, 2026
Fannie Mae Returns To Distressed-Loan Market With $214 Million Sale

The agency’s first nonperforming-loan offering in 13 months transfers 969 deeply delinquent mortgages to private buyers, including a small pool concentrated in Dallas-Fort Worth

Aug 20, 2026
Summer Rate Spike Knocks Pending Home Sales To Six-Month Low

Contract signings fell in every region during July, leaving purchase activity 30% below its 2019 level despite a larger workforce

Aug 19, 2026
Cash Sales Retreat, Giving Financed Buyers More Room To Compete

Cash transactions fell faster than the broader housing market in early 2026, but buyers without financing still accounted for nearly one-third of home sales

Aug 19, 2026
Mortgage Delinquencies Ease, But FHA Distress Keeps Deepening

Overall delinquencies dipped in the second quarter, but FHA serious delinquencies jumped 227 basis points from a year earlier as more troubled loans moved toward foreclosure

Aug 18, 2026
Credit-Score Choice Is Becoming Part Of The Mortgage Sales Pitch

One-third of consumers say they would consider switching lenders over older scoring models, making underwriting technology a potential borrower-retention issue

Aug 18, 2026