A home located in Phoenix, Arizona.
Mortgage rate buydowns are a home financing tool that provides buyers with a lower interest rate.
Homebuilders are employing rate buydowns the most in areas where home prices are falling the fastest.
Volatility in the mortgage market could make the practice more prevalent in the nearterm future.
Homebuilders are using creative incentives to attract individual homebuyers as high mortgage interest rates continue to eat away at demand for new homes.
A prevalent trend that builders are leaning into in order to help them sell more homes amid an increasingly tough economic climate is paying for mortgage rate buydowns for prospective buyers. A rate buydown is an upfront payment for “discount points” at closing to reduce the rate on a fixed-rate mortgage term. While it can cost thousands of dollars upfront, the idea is that it will save buyers more money over the life of the loan.
According to new research from John Burns Real Estate Consulting, more…
This article was written by [email protected] (Robert Davis) and originally published on www.businessinsider.com