Homebuilders want to turn buyers on to new-home construction, and they’re willing to sweeten the pot to do so. More builders reportedly are offering discounts or offering free upgrades—like new appliances—or covering closing costs to attract buyers.

Most of these incentives appear to be targeted at new homes or developments already in the works. “Builders with standing inventory will seek to sell it as quickly as they can,” says Robert Dietz, chief economist with the National Association of Home Builders.

Dietz estimates that builders have about 80,000 completed inventory homes ready for buyers nationwide. He also estimates an extra 540,000 homes in some stage of construction.

Sales of new-homes dropped 9.5% in March compared to a year earlier. Dietz expects new-home sales to continue to slow due to climbing unemployment.

“The market is on pause,” Dietz told realtor.com®. “Incentives will be used to offset prices as we see a surge in unemployment.”

Builders are offering different degrees of incentives. For example, the homebuilder Drees Homes is offering discounts in some locales, such as $1,000 for buyers who sign a contract by the end of May or an extra $5,000 toward closing costs for those who book a tour virtually or in person. They’re also offering in some markets up to $10,000 toward outdoor amenities such as kitchens and entertaining areas.

“Right now, we are just encouraging buyers. We’re still here, and we’re open for business,” Alicia Engelking, marketing director for Drees Homes in Houston, told realtor.com®.

Neals Communities, selling in communities on the west coast of Florida, began offering to waive closing costs for up to $18,000 on 80 of its homes that were finished or are currently under construction.

The builder Kenco is discounting up to $50,000 on some of its completed home inventory priced between $600,000 and $1 million.

Builders like Lennar Corp. and Ryan Homes are reportedly offering $7,500 in closing costs on new homes. Lennar is also offering an extra $5,000 to $10,000 off its selling price in some markets. Its mortgage company is touting 2.7% interest rates on 30-year fixed-rate mortgages for select homes (Freddie Mac reports the national average is 3.26%, for comparison).

In Wellington, Fla., three builders are offering discounts in a planned “agrihood” community accompanying a 5-acre working farm. “It’s a buyer’s opportunity to get a great price,” Susan Moguel, Arden’s marketing director, told realtor.com®.

Despite the pandemic, the majority of tenants are still keeping up with their rent payments. The majority of renter households—80.2%—made a full or partial rental payment for the month of April by May 6, according to the National Multifamily Housing Council. The analysis, which tracked 11.4 million units professionally managed nationwide, reports that the figure is up slightly from 78% of renters who made a payment by April 6.

“Despite the fact that over 20 million people lost their jobs in April, for the second month in a row, we are seeing evidence that apartment renters who pay rent are stepping up and doing so,” says Doug Bibby, NMHC president. “We expect May to largely mirror April, when the payment rate increased throughout the month as financial assistance worked its way to people’s bank accounts.”

Meanwhile, the industry is starting to see the potential for greater opportunity in rental housing, including single-family rental homes. JPMorgan Chase & Co.’s asset management arm more than doubled its size of a joint venture with American Homes 4 Rent, a landlord giant in the single-family rental space. JPMorgan’s Strategic Property Fund partnered with American Homes 4 Rent earlier this year. They increased their joint venture from $250 million to now $625 million. They believe the demand for rental houses will increase due to the pandemic, and they’re providing additional funds for the construction and operation of properties.

American Homes 4 Rent reported that through May 5 it had collected 95% of rent payments from its tenants for April and 82% of its payments for May.

New restrictions on the Economic Injury Disaster Loan program may prompt real estate professionals to look to other funding programs. Responding to the skyrocketing demand and evaporating funding, the Small Business Administration has reduced the size of loans it will issue through the EIDL program. It’s also reportedly limiting remaining funding to agricultural businesses.

This emergency disaster lending program for small businesses is separate from the Paycheck Protection Program, another lifeline that has been distributing funds to help companies stay afloat during financial hardships faced from the COVID-19 pandemic. Real estate professionals are still reportedly accessing PPP loans.

Initially, the EIDL program was granting individual disaster loans for small businesses of up to $2 million. But now the SBA has begun to limit those loans to $150,000, The Washington Post reports. As the agency works its way through a reported backlog of millions of applications over the last several weeks, it is also limiting who can now apply.

“At this time, only agricultural business applications will be accepted due to limitations in funding availability and the unprecedented submission of applications already received,” a statement on the SBA website reads.

“The SBA observed the necessity to help farmers recover from the economic downturn caused by the pandemic,” Carol Chastang, an SBA spokeswoman, says.

The EIDL has been a longstanding program within the SBA that often is used during times of crisis by companies. As the program became available in response to the pandemic, the SBA reported several million applications in the first few days it was activated. The EIDL program first ran out of funding in April, but Congress allocated an extra $50 billion for the loans.

Meanwhile, the Paycheck Protection Program is still accepting applications from small businesses. The PPP program, focused on keeping small businesses from laying off employees by offering disaster loans through forgivable loans, has $126.5 billion in funding remaining from its $669 billion total, HousingWire reports. Some banks reportedly have stopped accepting PPP loan applications because they believe they have enough in their pipelines to use up the rest of the funding, Cowen Washington Research Group reports. However, lawmakers urge that applicants try a different lender if one lender denies a loan. More than 5,400 lenders are issuing PPP loans.

Access a list of SBA-approved PPP lenders by state.

The 30-year fixed-rate mortgage inched up slightly this week to average 3.26%, but remains near its record low.

“Mortgage rates stayed at or near record lows for the fifth straight week and homeowners are taking advantage with refinance activity remaining high,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending May 7:

• 30-year fixed-rate mortgages: averaged 3.26%, with an average 0.7 point, rising from last week’s 3.23% average. Last year at this time, 30-year rates averaged 4.10%.
• 15-year fixed-rate mortgages: averaged 2.73%, with an average 0.7 point, falling from last week’s 2.77%. A year ago, 15-year rates averaged 3.57%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.17%, with an average 0.3 point, rising from last week’s 3.14% average. A year ago, 5-year ARMs averaged 3.63%.

Freddie Mac reports average commitment rates along with the average fees and points to reflect the total upfront cost of obtaining a mortgage.

Real estate professionals report that about 77% of potential sellers are preparing to sell their homes once stay-at-home orders from the COVID-19 pandemic are lifted, according to a newly released survey from the National Association of REALTORS®. More than half of REALTORS® report their clients are taking on do-it-yourself home improvement projects in preparation, too.

“After a pause, home sellers are gearing up to list their properties with the reopening of the economy,” says Lawrence Yun, NAR’s chief economist. “Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”

NAR conducted an Economic Pulse Flash Survey May 3-4 and asked about 2,500 members how the coronavirus has been affecting their real estate business.

Home buyers are gradually re-emerging, but the pandemic has shifted some of their housing preferences, according to the results. Five percent of REALTORS® report that their clients have changed their neighborhood preferences from urban to suburban due to the pandemic. Also, one in eight REALTORS® surveyed say that buyers have changed at least one home feature that’s important to them since the COVID-19 pandemic. The most common features identified are home offices, yard space for exercising or growing food, and more space to accommodate their family.

But home buyers in search of a big bargain may not find one. Nearly 75% of REALTORS® report that their sellers have not reduced listing prices to attract buyers. Housing inventories are near record lows and that reduced competition may be prompting more sellers to stand firm on their home prices.

View NAR’s weekly housing market monitor.