Home building keeps tumbling down, even as builders offer buyers special deals and incentives, as the reset in the housing market and inflation keep taking their toll.

Builders started just 211 homes last month in the Oklahoma City area, the least in any month going back for at least 10 years, according to Dharma Inc.'s Builder Report, which tracks building permits issued by Oklahoma City and its suburbs.

It was the third monthly slam down in a row.

• September: 332 permits were issued, down 36% compared with August.

• October: 244 permits, down 26.5%.

• November: 211 permits, down 13.5%.

So far this year, builders have started 4,927 houses, down 25.5% compared with the same period in 2021.

Builders would have to start 1,691 houses in December — an absurd impossibility — to match last year's 6,618 starts, which was the highest yearly total for at least a decade.

Home builders are adding incentives to buyers to sweeten the pot

Higher home loan rates have many buyers balking even as they regain some negotiating power from sellers. But many everyday would-be sellers — not building companies — have pulled back from the market, spooked by the prospect of having to haggle with buyers.

Builders are offering incentives to keep buyers knocking on their doors and buying their new houses.

One home builder is offering to pay closing costs and one year of utility bills. Another one is offering a free shop and fence. Several builders have been offering free upgrades, for example, ceramic tile throughout a home rather than carpeting, with no increase in base price.

Adjustable-rate mortgages are back, and bankers are encouraging them

Others are going directly to the source of trouble: interest rates. For example, STK Homes in Edmond is partnering with Great Plains Bank to offer a 4.99% rate to qualified borrowers with a 3:3 adjustable-rate mortgage, that is, 4.99% locked for three years, with adjustments in the rate coming every three years thereafter.

"After the initial three years the interest rate adjusts based on the 'Wall Street Journal Prime Rate' plus a 1% margin. Every three years the maximum adjustment is 2% and the lifetime maximum for adjustments is 6%," STK Homes said.

Builder partnerships with bankers are signs of the times, said Madi McFarland with STK Homes."In this uncertain, rising interest rate environment, we're excited to partner with Great Plains Bank," McFarland said.

Great Plains Bank sees it as helping protect neighborhoods, not just the builder, said Michael Decker, executive vice president and director of sales.

"We will continue to focus on helping families across Oklahoma achieve home ownership by facing the concerns head on. STK is a great partner because they don't just build homes, they build communities," Decker said.

The construction slowdown does affect more than home building companies. Subcontractors and suppliers also feel the pain of contraction, as well as the general economy.

Home construction slowdown hits more than housing; it takes out jobs

"Employment from new home construction and remodeling has a wide ripple effect," according to the National Association of Home Builders. "About half the jobs created by building new homes are in construction. They include framers, electricians, plumbers and carpenters.

"Other jobs are spread over other sectors of the economy, including manufacturing, retail, wholesale and business services.

NAHB analysis shows that building 1,000 average single-family homes generates:

• 2,970 full-time jobs.

• $162 million in wages.

• $118 million in business income.

• $111 million in taxes and revenue for state, local and federal governments.

The slowdown hit fast after mortgage interest rates shot up earlier this year. Builders started the year out blazing, so end-of-year numbers won't look as bad despite such deeply reduced activity in the fourth quarter.

Top Oklahoma City-area builders' starts through November, according to the Builder Report:

• Taber Built Homes LLC: 507.

• Rausch Coleman Homes OKC: 489.

• Ideal Homes & Neighborhoods: 461.

• Home Creations: 282.

• D.R. Horton Inc.: 234.

Senior Business Writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at rmize@oklahoman.com. Sign up for his weekly newsletter, Real Estate with Richard Mize.

This article originally appeared on Oklahoman: How OKC home builders work to attract buyers in the housing downturn