How homebuilders are winning the housing recovery

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Builders are winning the housing recovery by giving buyers what they want: lower interest rates.

About 75% of builders are dangling mortgage rates that buyers can't find on their own through lending institutions, according to surveys conducted by John Burns Real Estate Consulting.30% offer reduced rates for the first two years of a mortgage.The most common mortgage buydown puts rates in the mid-to-high 4% range, though some drop as low as the 3% range,While builders have deployed mortgage buydowns in the past, it's "nothing like what we are seeing today," Rick Palacios Jr.

“January has seen a nice bump on sales, according to builders, and a lot of that is due to rate buydowns working.": Rising rates and material costs made construction prohibitively expensive just a few months ago. Now, costs are settling down and builders are gaining an upper hand in the resale market by addressing buyers' top concern.

 

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