Builders Cut Prices Below 2019: What It Means for Sellers (Lennar 2025)
Lennar reported that its average selling price fell to $383,000 in Q3 2025, down 9% year-over-year and below its 2019 level. That’s a 22% drop from its Q3 2022 peak.
Crucially, management acknowledged they leaned on incentives and mortgage-rate buydowns to keep orders healthy—and margins slipped to about 17.5%.
What does all of this really mean? Builders are flexing price and payments to meet a more price-sensitive buyer, and it’s working well enough to hold sales together… but at a decrease in margins.
And this is from the 2nd largest home building company in the United States. A company that diligently analyzes costs from supplies to labor to process… things that your average local homebuilder is most definitely not doing.
And this isn’t isolated. NAHB’s latest surveys show roughly two-thirds of builders are using incentives, with about 39% cutting base prices (average cut ~5%).
That’s a playbook: right-size the house, trim the price, and lower the monthly payment with a buydown—then move inventory.
Why existing-home sellers should take notice
New construction competes with resale in two ways: price clarity and payment engineering.
Builders can advertise “from” prices, include closing credits and buydown rates below market.
A resale seller who fixates on last year’s comp is suddenly up against a shiny, warrantied home with a lower monthly number—even if the sticker price is similar. In that scenario, traffic and offers drift toward the builder unless the resale price or terms adjust.
What about condos?
Condo pricing is under additional pressure. Redfin reported that condo prices nationally were down ~2.2% YoY in May, one of the largest dips on record, and in some metros (San Francisco, Austin, Miami), declines reached double digits.
For condo sellers, it means more appraisal scrutiny, longer days on market, and buyers who insist on HOA health, insurance coverage, and special-assessment risk reviews.
I will tell you from personal experience, and the experience of condo sales falling apart in the office, that HOA health (including Reserve Funds) is a huge financing problem right now.
How to Discuss this with Sellers
Frame the market around the monthly payment
If a builder is offering a 5.25% buydown and $10,000 in credits, you’re competing with a payment, not just a price. Model the buyer’s monthly at your current list vs. a plausible concession (credit for a buydown or closing costs) and show how it widens your offer pool.
Price to the next comp, not the last one
When incentives are widespread, “last spring’s sale” is a poor anchor. Target a position that gets you into the top-three homes a buyer will tour this weekend, then be ready to sweeten terms within the first 10–14 days if traffic lags. I can’t emphasize this enough. You have to be able to have real, honest conversations with your seller clients because a seller doesn’t put their home on the market just so people can come look at it… despite any bravado about not needing to sell (if that’s the case, why are they listing the home for sale?).
Use concessions as strategy, not surrender
A rate buydown can be cheaper than a price cut for your seller—but more valuable to the buyer’s monthly. Lead with structure: 2-1 buydown or permanent buydown quotations from a trusted lender, delivered at list launch. You should be partnering with a lender who you have a strong relationship with to create a plan on how to make the financing opportunities for the subject home more appealing.
For condo sellers
Expect more appraisal scrutiny, longer days on market, and buyers who insist on HOA health, insurance coverage, and special-assessment risk reviews. Pre-package the docs; price accordingly; consider early concessions to keep your days-on-market from signaling weakness.
How to Handle a Below-List Offer
As agents, we wear many hats. One of those hats is “Coach”. You will need to coach your sellers through the opportunity cost: today’s offer—perhaps with contingencies you can manage—versus sitting 30 more days as nearby builders refresh incentives and another resale drops price.
Anchor the conversation in weekly market feedback (showings, saves, and online views), and remind them that the first serious offer is usually the best in incentive-heavy markets.
In our area, we are not seeing heavy incentives. As a matter of fact, we haven’t been in a heavy incentive market since about 2012.
And for those of us who’ve been doing this for a while, it may be time to dust off some old playbooks. Last week I wrote about how YOY inventory in MA is up around 20%. While absorption rates still indicate a Seller’s Market, there is definitely a softening… especially in the market over $1M.
Right now, there are 7,001 single family homes and 4,101 condominiums listed in MLSPIN (MA) for a total of 11,102. Of those there are 3,580 listed over $1M (or 32.2%).
What the Market Data Shows
Nothing tells the story like the actual data. You know how I like diving in the data, especially our local data.
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Single-Family (MA)
Inventory is up and pace has cooled a notch. Active listing units are up ~17% YOY, and median DOM has stretched from 32 → 40 days (+25%). That shows up in the absorption math: absorption rate slipped from ~53% to ~47% and months of inventory rose from ~1.87 to ~2.12—still a lean market, but clearly less frothy than 2024.
Despite the slower tempo, pricing hasn’t cracked: median sale price is up ~4% YOY (~$649k → ~$675k) and sale $/sf is up ~3.4%. Price discovery is taking longer and it’s louder—price changes are notably higher YTD, while pendings (+~2.7%) and closings (+~1.6%) are inching up, not sliding. Net: sellers still have an edge, but it’s thinner; buyers have a little more negotiating room and time to act.
The thing I want you to really notice is the 17.27% increase in single family listings but only a 1.58% increase in sold units. Also note that listings with price changes are up 22.71%. These nuanced details are more important than the absorption rate or months of inventory because it denotes that sales are softening in the single family market and more sellers are having to alter their expectations.
What about condos?
Condominiums (MA)
Condos are the “more inventory, slower turn” story. Active listings jumped ~27% YOY (3,168 → 4,036) and median DOM lengthened from 38 → 44 days (+~16%). Absorption fell from ~43% to ~35% and MOI rose from ~2.32 to ~2.89, moving condos closer to a balanced feel in some sub-markets.
Demand is not collapsing—pendings are up ~3.5% and closings up ~1.7% YOY—but sellers are having to meet the market: notice that price changes YTD are up ~40%. Pricing is essentially flat-to-slightly positive: median sale price up ~0.9% (≈$555k → ≈$560k) and sale $/sf up ~1.3%. Expect more buyer diligence on fees, insurance, and HOA health, with a bit more leverage for well-qualified buyers.
The story here is a bit more bleak. A 27.40% increase in listed inventory but only a 1.66% increase in closed units. That’s a giant disparity.
References:
Lennar Q3 FY2025 press release & ASP/margin commentary. investors.lennar.com+1
Coverage of Lennar’s results (orders, margins, incentives). Barron's
NAHB HMI release (share of builders cutting prices; incentives usage). NAHB
Wolf Street analysis on Lennar’s price cuts below 2019 levels. Wolf Street
Redfin press release & analysis on condo price declines. Redfin+1
Case-Shiller (context on slowing price gains). S&P Global
Massachusetts Area Market Reviews. Pinergy/MLSPIN
