Dropping inventory means smaller incentive packages from home builders

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With new home inventory falling in many regions, U.S. home builders are reportedly scaling back incentive offers used to lure reluctant buyers. Meritage Homes, for example, is offering purchasers of $245,000 homes incentive packages valued at just 6 percent of the closing price — a far cry from the $60,000 incentive package the home builder offered at the beginning of the market slowdown. While some industry analysts caution that the end of the homebuyer tax credit could hinder recovery, Jeffrey Laverty, an analyst with research firm Oscar Gruss & Son, said that the scale back in home inventory is significant. In August, there was a national inventory of 261,000 homes, down from a 2005 peak of 570,000, according to Laverty, which could take some leverage away from buyers.

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