Get Lower Mortgage Rates with New Construction Homes

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Many home builders are offering lower mortgage rates with new construction homes than homebuyers can get on a resale home through their lender.

Homebuyers frustrated with the short supply of homes on the market and climbing interest rates are discovering they can solve both problems by looking at newly built homes. According to Redfin, one of the reasons for the lower number of available homes on the market is that 85% of current homeowners have a mortgage interest rate well below the current rate, making them hesitant to list their homes for sale.

The National Association of Home Builders (NAHB) Chief Economist Robert Dietz said recently, “Lack of existing inventory continues to drive buyers to new construction,” and “In March, 33% of homes listed for sale were new homes in various stages of construction. That share from 2000-2019 was a 12.7% average. With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.”

Get Lower Mortgage Rates with New Construction Homes

Home builders prefer not to lower the price of their homes even when the market is slow. One reason for that is it can anger existing homeowners who paid a higher price for a similar home in the same community. Builders are much more likely to offer incentives such as discounts on upgrades or closing costs, or an interest rate buydown.

In the current market, interest rate buydowns are one of the most popular incentives for home buyers. Other benefits such as being able to personalize a new home with specific features and upgrades, new appliances and systems and a new home warranty are making new-construction homes attractive to home buyers that may not have considered buying new before.

Most home builders work with preferred lenders or have in-house mortgage companies, which allow them the flexibility of offering interest rate buydowns to their home buyers. The most common types of interest rate buydowns are a temporary rate buydown and a permanent rate buydown sometimes called paying discount points. Temporary rate buydowns lower the monthly interest rate for a specific period of time while permanent rate buydowns lower the rate for the life of the mortgage. This can result in significant savings over time.

Even a 1-percentage-point difference in the mortgage interest rate can make a big difference in the monthly mortgage payments for home buyers. A 2-percentage-point difference can increase a home buyer’s purchasing power so they can buy a larger home, add more upgrades or significantly reduce their monthly mortgage payment.

With many home builders offering lower mortgage rates with new construction homes, it’s a great time to look at all the advantages of new construction homes.

Advantages of Buying a New Construction Home

In addition to the savings of a reduced mortgage interest rate, there are many other advantages of buying a new construction home.

  • Low Cost of Ownership: Newly built homes typically require less maintenance as everything from appliances to electrical, plumbing, and HVAC systems and fixtures as well as roofing, siding windows and doors are brand new. This means you can more accurately predict monthly homeownership costs. If something does break or go wrong, your home warranty will help protect you financially.
  • Quality Construction: New homes today are built with state-of-the-art products, techniques, and materials that must meet the latest building codes which equate to a better-built home that is more energy-efficient, environmentally friendly, and costs less to maintain.
  • Energy Efficiency: New homes are constructed with energy-efficient windows, better insulation, and new heating and air conditioning systems which means lower utility bills for the homeowner.
  • Smart and Healthy: “Smart” technology options can allow you to automate lighting, entertainment systems, alarm systems, thermostats, garage doors, and exterior door locks and control them remotely while away from home if desired.
  • Air and water resistant building envelopes combined with fresh air ventilation can improve indoor air quality. And the use of low-VOC paint and carpet results in an overall better home environment.
  • New Home Warranty: Home builders typically provide a warranty for workmanship and materials for most components of your home for a full year and new appliances are covered by a manufacturer's warranty for at least one year or more. Some builders offer additional coverage for your home’s systems and main structure for up to 2 and 10 years respectively.
  • Designed For the Way We Live Today: When you buy a new home, you can choose the floor plan that meets your needs – and you can add structural options to further personalize the space and make it your own. Newer homes have more storage where you need it, and many have open floor plan layouts with well-designed kitchens and living spaces.
  • New Community Amenities: Living in a new 55+ Community usually means having access to a variety of modern amenities that are designed to help you stay physically and socially active.

Epcon Communities

We understand and respect the unique financial needs of today's homebuyers. To best serve our customers, Epcon works with local lenders, providing viable and competitive financial solutions.

Epcon Communities builds luxury single-level homes in communities throughout the country. We offer floorplans from 1,300 to over 3,000 square feet with 2-4 bedrooms and most of our communities include resort-style amenities. So, you’re sure to find the perfect fit for your lifestyle and have plenty of room and fun activities for family visits.

Landscape maintenance and snow removal through the HOA frees up time for you to enjoy the activities and people that make your life more complete. It’s part of how Epcon Communities helps you make time for what matters most.

Contact us to learn more about all the benefits available to our home buyers and make an appointment to visit one of our communities near you.