How Much Homebuyers Can Save on New-Construction Homes

Recent data show that homebuyers save, on average, half a percentage point on their mortgage rate if they buy a new-construction home
May 9, 2025
2 min read

Homebuyers looking to buy new-construction homes could actually save on their mortgage payments. According to housing market platform Realtor.com's New Construction Report released this week, in 2024, those with a new-construction home could save about half a percentage point on their mortgage rate.

2024's half-point reduction for new-home buyers is tied with 2023 for the biggest mortgage rate saving for new-home buyers in at least a decade.

How do mortgage rates for existing homes and new-construction homes compare?

In 2024, the average mortgage rate for buyers of new-construction homes was 6.1% compared with the 6.6% rate for buyers of existing homes. Using a $400,000 home as an example, and assuming the buyer put 20% down on a 30-year fixed home loan, this rate difference translates to a savings of about $105 per month for the homeowner. 

Why the rate differences matter

From its analysis of deed data, the report found that: "Recent mortgage application data shows that affordability-strapped buyers are keenly sensitive to even small movements in rates, likely making the savings from a half-point rate reduction a significant purchase incentive."

Bigger incentives for buyers help make the sale

Importantly, these interest rate savings for new-home buyers appear to be larger than previous surveys of home builders showed. That means it's likely that many builders are actually offering bigger mortgage rate buydowns that they're promoting in their marketing to buyers.

"Some builders have in-house financing wings, and others have close relationships with lenders that allow them more flexibility than existing-home sellers have when it comes to using mortgage rates as a marketing tool," Realtor.com's senior economist Joel Berner points out. Read more about the research

Home builder efforts to boost buyer motivation

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