Business · Arizona
Builder rate buydowns can hide a higher price, Phoenix broker Will Carter warns
As most U.S. builders lean on sales incentives, Will Carter told the Phoenix Business Brief that a 5% new-build rate can come with $30,000 to $40,000 added to the price.
Nov 13, 2026
The low mortgage rates Valley homebuilders are advertising can come with a higher price baked in, Phoenix real estate broker Will Carter said on the Phoenix Business Brief episode on Phoenix real estate myths.
Asked by host Bryan Hyde whether new construction or an existing home makes more sense, Carter, who leads the Will Carter Team at Real Broker, said a comparable existing home is less expensive on a sales-price basis. But builder incentives can make a new home look cheaper month to month.
He described a buyer weighing a resale at a 7% rate against a new build offering 5%. "So it really feels like, oh, this is the way to go, I'm saving so much money," Carter said. "But the truth is those builders are adding $30,000, $35,000, $40,000 to the sales price," he said, to buy that rate down.
The pitch is widespread. Sixty-five percent of builders reported using sales incentives in October, the 19th straight month at least 60% had done so, and 43% cut prices, according to the National Association of Home Builders' October builder survey. The NAHB said mortgage rates had "climbed well above 7%" in recent weeks. The dollar figures Carter cited are his own estimates from his work with buyers.
The risk shows up if the owner has to move, Carter said. "If you have to sell for whatever reason in 2, 3 years, you're probably going to be in a really bad spot because you're actually paying more than the house is really worth to get that interest rate," he said.
A builder rate can still make sense for buyers who plan to stay put. "5% interest is a great thing for somebody that's long-term, they're going to keep it forever. That might work, the math might work," Carter said. "But for the most part, it's probably better to buy a resale right now, even with the higher interest rates on resales."
Carter, who said this is his 30th year in real estate, serves buyers and sellers across Maricopa County.
Listen to the full Phoenix Business Brief conversation with Will Carter on rate buydowns, misinformation and first-time buyers.