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As new home market shifts, builders offer big incentives

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Phoenix (3TV/CBS 5) – When mortgage rates started to rise, Andrew Behan thought new home prices were skyrocketing due to cross-border moves from Florida to Arizona.

“Interest rates kept going up. Prices were all over the place,” he said. “It’s been quite a journey. The market has changed and new home builders have started offering incentives. Builders are also funding closing costs and interest rate buybacks: “They were more than happy to work with us on housing prices as well as interest rates,” Behan said. rice field. “Once you put in the closing costs, it became a lot harder to say no.”

Valley real estate agents are also experiencing change. “Six months ago, I didn’t even get a call back from a buyer representative,” he says. “Right now, the pendulum is really swinging in these new-build communities, and these new home builders are willing to offer meaningful concessions.” For example, Toll Brothers recently offered up to $50,000 worth of “free Resort-style swimming pool” promotional ad.

According to the US Census Bureau, 135,000 new homes were sold in the western region of the country in September. This is a 30% decrease compared to the same period last year, according to seasonally adjusted data. Nationwide, the Census Bureau also shows that the supply of new homes for sale has been over nine months. In terms of points, the new building is a bit more sensible, so as long as we lower prices or offer incentives, it will probably gravitate a little sooner,” Ryan said. Sandel from NFM Lending.

Sandel says there are ways to combat rising mortgage rates. One potential option is called a two-one buy-down. “Let’s say the market interest rate today is 6.5% for him,” he said. “In the first year he will be 4.5%, in the second year he will be 5.5%, the rest of his 28 years he will be 6.5%, the goal is to bridge to a low interest rate environment where refinancing is possible. is.”

Behan opted for a more traditional interest rate buydown. The interest rate is fixed for the life of the loan. “Now that he’s 12 months away from having to look over his shoulder, that’s been a big factor for us,” he said. With the house nearing completion, he is ready to move from the Sun State to the Copper State.

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