Mortgage rates lower than today's 5 percent range? Smaller down payments? Below-market value pricing? Special amenity packages? Or a big tax credit?

What's the magic mix that will get you motivated? Or is it unlikely you'll get off the fence as long as you're worried about the economy and further drops in real estate values?

Questions like these are at the core of the housing industry's dilemma: Builders are stuck with bulging inventories of homes – most of them priced lower than six months or a year ago – that are still not selling. Strategies to bring buyers back into the market dominated the recent weeklong annual convention of the National Association of Home Builders here. It was also the key subject of an eye-opening new consumer opinion survey conducted by the association's research subsidiary.

The study, conducted in early January, polled more than 700 self-described “on-the-fence” buyers, segmented to represent consumers in all areas of the country at varying price levels. Asked why they hadn't yet committed to a purchase, 44 percent said they're holding out for lower mortgage rates, 41 percent said they weren't sure they could qualify for financing, and 38 percent said they expect to see lower house prices.

Concerns about falling property values were most prevalent among consumers in the Western region, while buyers in the Northeastern and Midwestern states were more likely to be waiting for lower interest rates. Buyers in the South tended to be more concerned about their ability to qualify for a new mortgage.

Researchers asked what individual enticements – financial or otherwise – would motivate them most to get past their worries and buy. Some of the results were surprising to builders at the convention session where the study was debuted. A few of the findings even appeared to conflict with the builders association's policy positions.

For example, although the association is vigorously lobbying the Obama administration and Congress for a 10 percent federal tax credit with a cap of $22,000 in the most expensive markets, the survey results suggested that a tax credit alone is not sufficient to motivate buyers to sign purchase contracts.

The study examined the effectiveness of a credit roughly the size the association is seeking from Congress, but it ranked sixth on a list of 10 features that would pull buyers off the fence – well behind mortgage and price concessions.

The mortgage rate that consumers said would be most effective in convincing them to buy now: a 30-year loan with a fixed 3 percent interest rate. Whether by coincidence or design, one of the country's largest home builders for high-end buyers, Toll Bros., announced a3.99 percent 30-year fixed rate on new houses nationwide during the convention, through Jan. 25.

A 30-year fixed-rate loan at 3 percent was ranked twice as effective an enticement as a 3 percent loan fixed for five years, with an adjustment to 5-¼ percent, fixed for the remainder of the loan term. Not surprisingly at a time when Fannie Mae and Freddie Mac require substantial down payments for the best interest rates, the study found that a zero-down option would be highly attractive to potential buyers – more than twice as effective as 10 percent down.

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