Higher mortgage rates don’t just affect buyers. They can change what it takes to sell your house, too.

That’s because today’s buyers are paying close attention to affordability. And when rates rise, even a relatively small change can make a noticeable difference in their monthly payment. So, they’re looking for ways to make the numbers work. And in some markets, new construction is giving them exactly that.

If you’re planning to sell, that doesn’t mean you can’t compete. But it does mean you need to understand what builders are doing to win over buyers – and what options you have, too.

Builders Are Competing on the Monthly Payment

New construction has something interesting going for it right now. While existing-home sales  (homes that have previously been lived in) continue to struggle under the weight of higher mortgage rates, new-home sales are holding up a bit better.

In a recent interview, Logan Mohtashami, Chief Economist at HousingWire explains new-home sales are at an 8-month high and are now running around 2019 levels. On the flip side, existing home sales are lagging behind and fall about 1 million home sales short of 2019 levels.

One big reason builders have been able to navigate higher rates differently is incentives. According to Realtor.com, nearly 1 in 5 (18.8%) newly built homes come with some kind of buyer incentive advertised up front:

The most common may surprise you. As the graph shows, many builders are offering reduced rates, sometimes through something called a mortgage rate buydown.

It’s essentially where they pay upfront costs to help buyers get a lower rate, and by extension, a lower monthly payment. It has obvious draws for buyers. For homebuilders, it helps them get their houses sold. So, a lot of builders see it as a win-win. That’s why reduced rates are a part of 13.8% of new home listings.

In some cases, builders are offering rates below 6%, maybe even far below 6%. And that can help buyers shave hundreds off their monthly payment. That’s a big difference to a buyer who are feeling the pinch right now.

So, How Can Sellers Like You Compete?

First, don’t assume a mortgage rate buydown is something only a builder can offer. Sellers can contribute toward a buyer’s rate buydown too, depending on the loan and transaction. Does that mean you should offer one? Or that you have to if you want to compete? Not necessarily.

A buydown is just one possible lever. Depending on your market and the buyer, it may make more sense to negotiate on price, contribute toward your buyer’s closing costs, make repairs, or make sure your house stands out in ways a new build can’t. That’s why working with an agent who knows your local competition matters. Joel Berner, Senior Economist at Realtor.com, says:

“Sellers of existing homes are facing a lot of competition from the new-home space. . . so sellers should highlight the local amenities of their neighborhoods in contrast to the more suburban or exurban communities where many new homes are built.”

A great agent will do this naturally anyways. Knowing what makes your house different and showcasing that in your listing can help your house stand out. And remember, being open to making a few compromises or throwing in some concessions can make a bigger difference for buyers than you may think.

Today’s Market Rewards Sellers Who Adapt

Builders have also been quicker to adjust their prices based on what buyers can actually afford and where demand is. That’s putting pressure on the resale market in some areas. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), explains:

“. . . existing homeowners now have to do the price discovery that builders have been doing since 2022.”

That’s an important message if you’re hoping to sell.

You don’t automatically need to slash your price or offer a big concession. But you do need to price and market your house based on what buyers can pay today – not what sellers could get a few years ago.

And remember, this varies tremendously by location. New construction represents a much bigger share of the competition in some markets than others, and builder incentives aren’t equally common everywhere. So, lean on an agent to see how big of a factor builders are in your area.

Bottom Line

Higher mortgage rates are making buyers more cost-conscious. Builders know that, and many are responding with rate buydowns, closing-cost help, price reductions, and other incentives.

If you’re thinking about selling, talk to an agent about what buyers are getting from other homes in your area – including new construction – so you can make sure your house is positioned to compete.

You may have seen the headlines saying mortgage rates have climbed to the highest point since January 2025. And if that’s left you reluctant to buy a home, here’s what you need to remember… 

That’s not necessarily the number you’d get. 

It’s a common misconception that the rate you see in the headlines is the same one you’d get when you buy. The truth is, mortgage rates shift often, and the rate you actually end up with can vary a lot from what you may see or hear about. 

What Determines Your Real Rate? 

Advertised rates and “real rates” aren’t always the same. That’s because real rates are based on your specific situation, which includes your overall finances and goals. The rates you see in the headlines can’t possibly reflect that. 

That’s why only a lender can tell you what your real rate will be. To figure out your unique number, they’ll look at:

• Your credit score: Your credit score includes your payment history (if you’ve made late payments – and how often), credit utilization (are your accounts maxed out, or do you have available credit?), and the length of your credit history (how long have your accounts been open?). For example, someone with an exceptional credit score may qualify for a better rate.

• Your debt-to-income ratio (DTI): This is calculated by dividing your monthly debt payments by your monthly income before taxes to come up with a percentage. The higher your DTI, the higher your rate could be.

• The down payment size and Loan-to-Value (LTV): Your down payment is the percentage of the home’s price you will put down. The LTV is the percentage of a home’s sales price that equals your mortgage. 

• The type and term of loan program options: Your loan officer will walk you through different loan options based on what you qualify for. Mortgage rates can vary between different loan products and programs. 

Even after you find a home you love, other things can have an impact too. For example:

• A mortgage rate buydown: This helps you get a lower mortgage rate, and by extension, a lower monthly payment, by paying an upfront cost. Sometimes a seller, builder, or another party may even offer to cover that cost themselves as an incentive for you to buy.

• Seller concessions: Sellers are allowed to pay buyer closing costs according to most loan program guidelines. Seller-paid closing costs can add up to thousands of dollars, which can free up some cash for you to increase your down payment, pay down debt, or make other financial adjustments to try to get a better rate. 

There’s a lot that can ultimately have an impact on your actual rate. 

Your First Step? Getting Pre-Approved.

If you want to know if your number could be higher or lower than the headlines on social, you need to talk to an expert. A simple conversation with a loan officer can help you determine when you’ll be ready to buy, how much you can borrow, and of course, what your real rate will be. 

Your lender may recommend a pre-qualification and pre-approval:

• Pre-qualification is a general estimate of what you might be able to borrow based on self-reported information. 

• On the flip side, pre-approval is actually a conditional commitment from a lender based on verified information. 

Just know that, of the two, the pre-approval process gives you a more accurate picture of your options than pre-qualification. Bankrate gives a quick comparison so you can see why:

How To Get Ready for the Conversation

Ask your lender what documents you’ll need to gather for that conversation. And keep these questions in your pocket too. They’re good things to go over when you talk: 

• What will I gain or lose by waiting to buy a home for 3, 6, or 12 months? 

• Will I get any tax advantages by buying a home – and what are they? 

• What’s the benefit of buying a home and starting to build equity now versus waiting? And how does that impact my finances in the long run?

• How will rate changes in either direction affect me?

Once you find out your rate, maybe you can buy now. Or maybe you still need to wait. But at least you’d know your options and can make an informed decision.  

Bottom Line

Headlines and social media make today’s rates sound high. But you have to remember, the rate you’re seeing online and your actual rate could be different. The only way to know what your rate could be is to talk to a trusted lender. 

With the right help, you can find out what your real rate is – and where it can take you.

Today’s housing market splits into four distinct types. You’ve got cash buyers, buyers financing a purchase, owners who feel locked into a low rate, and builders with homes to sell. Which type you’re in changes how you should buy or sell. Ryan Serhant, CEO of SERHANT agrees:

“There is no longer a housing market . . . There are four Americas.”

Here’s what each looks like, and what it means for you.

Cash Buyers: 1 in 4 Buyers Are Paying with Cash

If you already own a home, you may be able to buy your next place in cash thanks to your equity. In fact, 26% of existing home sales this summer were all-cash, according to the National Association of Realtors (NAR). That’s roughly 1 in 4 buyers skipping a home loan entirely.

Data from Realtor.com shows most are at the very top and very bottom of the market by price point (see graph below):

For Buyers: If you’re able to buy in cash too, having no financing contingency means your offer is going to look really appealing to sellers. You may get a faster close and more room to negotiate.

For Sellers: A cash offer can mean less risk of the deal falling through, but that certainty sometimes comes with a lower number attached. Compare the whole picture before deciding it’s automatically your best offer.

Buyers Using Financing: They’re Not Getting Help from Rates, But They Are from Sellers

If you’re looking to take out a mortgage, you should know mortgage rates aren’t likely to come down anytime soon. Data from Fannie Mae shows nearly half of experts actually raised their long-term rate forecast this year (see graphs below):

That’s tough for homebuyers relying on a mortgage, especially first-time buyers. But it’s not all bad news.

While buyers may not be getting the lower rates they want, at least there’s help to be had if you ask sellers for what you really need. Redfin data shows almost half of May sales included a concession like a rate buydown or closing-cost credit from the homeowner.

For Buyers: Stop waiting on rates to drop. Negotiate the concession instead. If the payment works today, that’s your signal.

For Sellers: Expect to negotiate. Build a concession into your pricing strategy from the start could be the thing that gets a deal done.

Rate-Locked Homeowners: Most Are Sitting on a Rate Below 5%

If you own a home already, you might not want to move and take on a higher rate than the one you’ve got. That’s the case for a lot of people. About 2 in 3 homeowners have a mortgage rate under 5%, according to Federal Housing Finance Agency (FHFA) data (see graph below).

When a homeowner has a rate that low, it’s harder for them to want to move and leave behind that ultra-low rate. Because, they’d likely have to take on a higher one on their next home. Hence “rate locked” – they feel locked in.

And, according to Fannie Mae data, most experts think that lock-in will stick around another 3-5 years. That means this will continue to be a factor in how many homes come up for sale.

For Buyers: Fewer homeowners are listing, but the ones who do usually have a real reason to move. They’re often more flexible, motivated sellers.

For Sellers: Run the math on what your equity actually buys before ruling out a move. Got an FHA or VA loan? Ask about making it assumable. It’s rare, but it’s a real selling point.

Homebuilders: They’re Negotiating More Than You Think

If you’re looking at new construction, this might be your moment. According to the latest Census data, builders have more unsold new homes sitting around than usual, enough that it would take nearly 10 months to sell them all at the current pace (well above the normal 4-6 months pace). That’s pushing builders toward price cuts and rate buydowns.

For Buyers: That’s where the deals are right now. Just be sure to use your own agent and compare the whole incentive package, not only the price tag.

For Sellers: Lead with what a builder can’t offer – mature landscaping, an established neighborhood, and a house that’s ready today, not in 8 months. That can help your house seem like a better optiona

Bottom Line

Four different housing markets are running at once: cash buyers, financed buyers, locked-in owners, and builders. Each one plays by its own rules, and the right move for one is exactly the wrong move for another.

Connect with a local real estate agent to figure out which one you’re actually in and build your next move from there.