The Builder's $17,500* Discount

Hello Fort Worth Insiders!

Tuesday means one story, deep dived. This week: the deal hiding inside almost every new build in Fort Worth right now. It isn't a lower price. It's a lower rate. Today we unpack how it works, who pays for it, and what it means for your home.

Kirstine

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Nobody cut the price. As a Buyer you get 3X the benefit.

The average 30-year mortgage rate is 7.18%. But D.R. Horton, the biggest home builder in America and based right here in Arlington, says its buyers are getting rates about 1.5 points below that. Close to nine in ten of its own-lender buyers take the deal. The builder told investors on 29 October that these offers will stay "elevated" through 2027. That's great news if you're buying new. It's a real problem if you're selling a resale home in a street with new builds nearby, because that equals massive competition.

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I can already hear you saying “But D.R. Horton’s quality is poor”

I’m not arguing that, I’ve sold many of their builds, however, lets be real - this economy is tough, finding an “affordable” home is beyond difficult right now.

These homes and these incentives fill a void that is otherwise leaving people living in mold infested rentals, with family or with growing families in inadequate space.

RESALE… Lets talk about the long term investment, I’ve seen & sold many homes that were built by various builders and unless you are in the fully custom Luxury space, there is no obvious gap in pricing when nearby comparable sales support the price - so does it make sense, when buying in a neighborhood, to pay $50,000 more knowing resale will not honor that investment? My answer is no, not unless you hate money.

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26 August 2026 – A CFA Institute paper warns that builder rate deals hide the true price of new homes.

17 September 2026 – Lennar, another big builder, says resale listings are "particularly high" in Texas. It adds that it matches resale sellers when they cut prices.

8 October 2026 – The 30-year rate peaks at 7.40% (Freddie Mac).

17 October 2026 – North Texas builders started just 8,690 homes in the summer quarter, down from 11,290 in spring (Residential Strategies).

28 October 2026 – The Federal Reserve holds its rate at 3.75% to 4%.

29 October 2026 – D.R. Horton reports. Profit falls 18%. It says rate deals will stay high into 2027.

5 November 2026 – Rates ease to 7.18%. Third weekly drop in a row.

9 November 2026 – October NTREIS figures show new-build closings across DFW down 20% on a year ago.

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Here's the math that runs the new-home market right now.

Ed Pinto at the American Enterprise Institute, a Washington think tank, has worked out a rule of thumb. For a builder, buying your rate down by one full point costs about 3.2% of the home's price. To cut your monthly payment by the same amount with a price cut, the builder would need to drop the price by about 10%.

So let's use D.R. Horton's average home. A 1.5-point buydown costs the builder roughly 4.8% of the price. That's about $17,500. It takes your payment from about $2,353 a month to about $2,011. That's $341 a month back in your pocket.

Now take that same $17,500 and knock it off the price instead. Your payment drops by only about $110. (My maths, using Pinto's rule.)

Same cost to the builder. Three times the help to you. That's why D.R. Horton's chief executive, Paul Romanowski, has said "the most attractive monthly payment we can put them in is with a lower rate."

There's a second reason, and it matters for your street. When a builder cuts the rate, the sale price on record stays high. That price becomes a "comp", short for comparable sale, which appraisers use to value every other home nearby. A price cut drags the comps down. A rate cut doesn't.

And builders are under real pressure to keep selling. Across DFW, they started far fewer homes this summer. Ted Wilson of Residential Strategies, who tracks every subdivision in North Texas, put it simply: "Psychologically, there's something about 7% that has been tough." Builders still have finished homes to move. The buydown is how they move them.

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If you're buying

New builds are where the best monthly payments in Fort Worth are right now. Not because the homes are cheaper, but because the rate is. Walsh, Morningstar and the Aledo side of I-20, the Alliance and I-35W north corridor, and the Crowley and Burleson stretch along Chisholm Trail Parkway all have big builders with their own lenders.

Ask three questions at every sales office. One: is the rate fixed for 30 years, or only for the first year or two? A "permanent" buydown lasts the life of the loan. A "2-1" buydown is lower for two years, then goes up. Two: what's the price if I use my own lender and skip the rate deal? Three: what's the MUD or PID tax? A MUD, or municipal utility district, is an extra property tax that pays for the roads and pipes in many new communities. It can add hundreds a month.

Then do one more thing. Look at the price, not just the payment. If you might sell in three to five years, the price is what you'll be judged on later. More on that in The Other Side below.

If you're selling

If your home is near a new community, you aren't just competing with your neighbours. You're competing with a builder who can offer a rate 1.5 points under the market. That's the toughest rival a resale seller has had in years.

The good news: you can play the same game. A seller credit can pay for a buyer's buydown too. There are limits. On a regular loan with less than 10% down, the seller can usually cover up to 3% of the price. With 10% to 25% down, it's 6%. On an FHA loan, it's 6%. On a $350,000 home, 3% is $10,500. That can buy a 2-1 buydown and then some.

Lead with the payment in your listing, the same way builders do. And lean on what new builds don't have: grown trees, a finished street, a bigger lot, and very often no MUD tax.

If you're staying put

Your value is mostly holding. D.R. Horton's average price was flat on a year ago, and builders are fighting hard not to cut list prices. That helps protect the comps in your area.

But watch the gap. New builds sold for 93.5% of their first asking price in October. If you plan to sell in the spring, the deal you'll need to offer may be a rate deal, not a lower price. Know that now so it doesn't surprise you later.

And if you bought new in the past two years with a builder buydown, check your loan papers. Find out if your rate is fixed for good or rises later. If it rises, plan for that date now.

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The case against buydowns is serious. Thomas Smith, writing for the CFA Institute in August, argues that every new home sold with a buydown is recorded at a price "nobody paid." The builder keeps less. But the deed, the appraisal and the comps all show the higher number. If you buy that home and need to sell it a few years later, the next buyer won't get a builder buydown. They'll pay what the home is really worth. Smith shows a buyer at a big national builder who could lose about $77,000 on resale, with no wider price fall at all. AEI's Pinto goes further. He estimates large builders' prices run 10% to 12% higher than they would without these deals.

The builders' side is also real. A buyer who stays for ten years and never refinances gets a lower payment every single month. Lennar's leaders say they respond when resale sellers cut prices, so new-build prices aren't floating free of the market. And a buydown is often the only way some first-time buyers qualify at all. For many families, a lower payment today beats a better price on paper.

Where I land: a buydown is a real deal, but it isn't free. If you'll stay a long time, it can be the best offer in town. If you might move in a few years, negotiate the price as hard as the rate.

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Ask for it in writing. Buyers: get one new-build quote with the builder's rate deal and one with your own lender, both on paper, so you can compare the price and the payment side by side. Sellers: ask your lender what a 2-1 buydown would cost on your list price, so you can offer it before a buyer walks to the model home down the road.

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D.R. Horton results and guidance: Business Wire and earnings call transcript
Mortgage rates: Freddie Mac and RISMedia, 5 Nov
October NTREIS new-build figures: DFW Market Brief (NTREIS data)
DFW starts and empty homes: Dallas Morning News via Yahoo (Residential Strategies)
Fed decision: Federal Reserve
Lennar comments: Lennar Q3 call transcript
Buydowns and recorded prices: CFA Institute
Pinto and Romanowski quotes: HousingWire
Builder price cuts (NAHB): Mortgage News Daily
Payment and buydown maths: my own estimates.

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Weighing a new build against a resale? Reply to this email – I read every one.

Or book a 15-minute call with Clive and me.

- Kirstine

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Fort Worth has the heart. We track the pulse. So you never miss a beat.

I'm Kirstine Openshaw, Top 250 Fort Worth Texas Realtor. Clive and I own the Fort Worth Pulse Realty Group. I get you the home. Clive gets you the loan. NMLS #2639452

682-442-3441 · [email protected]

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