Seller Price Cuts Beat Builder Rate Buydowns in 59% of U.S. Metros

Resale sellers are cutting prices. Builders are buying down mortgage rates. Both are fighting for buyers’ monthly budgets, but who’s actually winning?

Ziffy analyzed 205 U.S. metros comparing monthly payments on discounted existing homes versus new construction with builder rate buydowns. The verdict: sellers win in 59% of markets, but nationally the gap is just $5 per month. The real story is in the regional divide, and which metros offer the biggest savings on each side.

Key Highlights

• Seller price cuts beat builder buydowns in 120 of 205 metros (59%), with existing-home buyers saving an average of $345 per month in markets where sellers win, and more than $850 per month in 10 metros.
• Builder buydowns deliver lower payments in 85 metros (41%), with new-home buyers saving an average of $196 per month where builders win, and more than $380 per month in 10 metros.
• Nationally, the competition is nearly a dead heat: the typical new-home payment with a buydown ($1,720) is just $4.86 less than a discounted existing home ($1,725), a margin that would disappear with a single rate fluctuation.

Where Seller Price Cuts Beat Builder Rate Buydowns and Where They Don’t

1. Sellers win in 120 of 205 metros (59%); saving buyers an average of $345 per month where they win.

Existing-home sellers offer lower monthly payments in the majority of U.S. markets. In these 120 seller-winning metros, buyers save an average of $345 per month (or $4,140 annually) by choosing a discounted resale over new construction with a builder buydown.

The seller advantage is most pronounced in the Midwest and Northeast, where affordable existing housing stock faces little competition from new builds priced for today’s elevated construction costs.

Top 10 Metros Where Sellers Win

2. Builders win in 85 of 205 metros (41%); saving buyers an average of $196 per month where they win.

In 85 metros, builder rate buydowns overcome both the new-home price premium and seller price cuts to deliver the lower monthly payment. The average savings in builder-winning markets is $196 per month or $2,352 annually.

Builder victories concentrate in the West and Sunbelt, where active new construction pipelines and aggressive incentive programs give builders a competitive edge.

Top 10 Metros Where Builders Win

3. Nationally, the payment gap is just $5, making this competition nearly a dead heat.

At the national level, the typical monthly payment on an existing home (after an average 2.7% price cut, financed at 6.23%) is $1,725. The typical payment on a new construction home (financed at the buydown rate of 4.73%) is $1,720. That’s a difference of just $5 per month in favor of builders.

This near-parity masks enormous variation at the metro level. In some markets, builders deliver savings exceeding $900 per month; in others, buying existing saves more than $2,800 per month.

Amresh Singh

Founder and CEO
Ziffy

“What this data reveals is that monthly payment, not sticker price, has become the real battleground. In 4 out of 10 markets, builders are winning that battle despite selling homes that cost more. Buyers who only compare list prices are missing half the picture.”

4. The new-home price premium averages 29%, but builder buydowns erase it on a payment basis in 73 metros.

Across all 205 metros, new construction carries an average price premium of 29.3% over discounted existing homes. Yet in 73 markets where new homes cost more, the rate buydown still produces a lower monthly payment.

This finding underscores why payment-focused buyers may reach different conclusions than price-focused buyers. A $450,000 new home at 4.73% can cost less per month than a $350,000 existing home at 6.23%.

5. The regional divide is stark: builders win 72% of Western metros while sellers win 93% of the Midwest.

Geography is destiny in this rate war. In the West, builders win 34 of 47 metros (72%). In the Midwest, sellers win 26 of 28 metros (93%). The South is a battleground at 59% sellers, while the Northeast leans toward existing homes at 79% sellers.

The average savings also vary by region: Northeast seller wins average $704 per month, the highest of any region, while Western builder wins average $257 per month.

6. The average seller price cut is 2.6%, meaningful but not enough to overcome builder buydowns in 41% of markets.

Existing-home sellers are discounting by a median of 2.6% off listing prices nationally. Some metros see cuts above 3.5%, including Toledo (3.9%), Bridgeport (3.8%), and Albany (3.7%). But even these aggressive discounts cannot match the payment impact of a 1.5-point rate buydown in more than four out of ten markets.

Debjit Saha

Co-Founder and Real Estate Expert
Ziffy

“Too often, buyers dismiss new construction because of the sticker price without running the payment math. Our analysis shows that in more than a third of metros with a new-home price premium, financing strategy flips the affordability equation. That’s why we built this comparison, so buyers can see the full picture.”

7. In New York, existing-home buyers save $824 per month, sellers win decisively across the Empire State.

New York City stands as one of the strongest seller markets in the country. A discounted existing home in the New York metro carries a monthly payment of $3,336, while a new construction home with a 4.73% buydown rate costs $4,159 per month, a difference of $824 in favor of existing homes.

The pattern holds across New York State. In Albany, sellers win by an even wider margin: existing-home payments of $1,675 versus new construction at $2,702, a savings of $1,028 per month, the sixth-largest seller advantage nationwide. Other major Northeast metros follow suit: Boston ($3,406 existing vs. $3,764 new, saving $357), Philadelphia ($1,795 vs. $2,451, saving $656), and Manchester, NH ($2,419 vs. $3,143, saving $724).

8. In Los Angeles, new-home buyers with a buydown save $583 per month, builders dominate California’s largest metros.

Los Angeles demonstrates how builder buydowns can flip the affordability equation in high-cost markets. Despite new homes carrying higher price tags, a buyer financing at the buydown rate of 4.73% pays $3,914 per month, compared to $4,497 for a discounted existing home at 6.23%. That’s $583 per month in savings, or nearly $7,000 annually.

The builder advantage extends across much of California. In San Jose, the state’s most expensive market, new-home buyers save $489 per month ($6,849 vs. $7,338). Sacramento ($2,653 vs. $2,737, saving $84), Riverside ($2,548 vs. $2,774, saving $226), and Modesto ($2,117 vs. $2,208, saving $91) all favor new construction. The exceptions are notable: San Francisco tips to sellers (+$277) and San Diego strongly favors existing homes (+$1,108).

9. In Miami, existing-home buyers save $1,183 per month, the largest seller advantage among major Florida metros.

Miami breaks from Florida’s builder-friendly trend. A discounted existing home carries a monthly payment of $2,248, while new construction with a buydown costs $3,431, a gap of $1,183 per month, the third-largest seller advantage in the entire dataset.

Yet most of Florida favors builders. Tampa ($1,663 new vs. $1,709 existing, saving $46), Orlando ($1,774 vs. $1,849, saving $76), Jacksonville ($1,514 vs. $1,667, saving $154), and Cape Coral ($1,496 vs. $1,621, saving $125) all deliver lower payments for new-home buyers.

10. In Austin, new-home buyers save $477 per month, one of the strongest builder markets in the Sun Belt.

Austin showcases builder incentives at their most effective. New-home buyers pay $1,561 per month versus $2,039 for existing, a $477 monthly advantage that makes Austin one of the top 10 builder-winning metros nationwide.

Texas tells a divided story, however. Dallas ($1,629 new vs. $1,737 existing, saving $108) and Houston ($1,374 vs. $1,459, saving $85) favor builders. But San Antonio barely tips to sellers ($1,332 new vs. $1,325 existing, just $7 difference), while smaller Texas metros like Tyler (+$382 for existing), Amarillo (+$294), and Beaumont (+$348) show meaningful seller advantages.

11. In Chicago, existing-home buyers save $193 per month, the Midwest overwhelmingly favors sellers.

Chicago exemplifies the Midwest’s seller-friendly landscape. Existing homes carry payments of $1,610 versus $1,803 for new construction, a $193 monthly advantage for resale buyers.

Minneapolis ($1,813 existing vs. $2,130 new, saving $317), Detroit ($1,229 vs. $2,082, saving $853), Cleveland ($1,137 vs. $2,123, saving $986), and Cincinnati ($1,418 vs. $1,818, saving $399) all show substantial existing-home advantages. Only two metros tip to builders in the entire Midwest: Madison, WI ($19/month savings) and Rapid City, SD ($233/month savings).

Regional Breakdown: Where Sellers and Builders Each Dominate

The regional divide is stark. Builders dominate Western markets; sellers dominate the Midwest. The South is a battleground; the Northeast leans heavily toward existing homes.

*Average savings in metros where that side wins

Why the regional split?

• Midwest (93% seller wins): Affordable existing stock (often priced below $300,000) leaves little room for builder buydowns to compete. Markets like Toledo, Cleveland, and Detroit have existing payments under $1,300 while new construction exceeds $1,800–$2,100.
• Northeast (79% seller wins): High new-construction costs in coastal metros like Bridgeport, Ocean City, and Albany create premiums that no buydown can overcome. Even Boston and New York see existing homes win decisively.
• South (59% seller wins): The most competitive region. Builder-heavy markets like Austin, Nashville, and Jacksonville favor new construction, while markets with older housing stock or extreme new-home premiums (Miami, Memphis) favor sellers.
• West (72% builder wins): Active construction pipelines and aggressive builder incentives make new homes the payment winner in most Western metros. Los Angeles, Phoenix, Denver, and Salt Lake City all favor builders.

Full Metro Rankings: Builders vs Sellers on Monthly Payments

The following table presents all 205 metros analyzed, ranked from largest seller advantage to largest builder advantage. The “Difference” column shows New Construction Payment minus Existing Payment: positive values indicate seller wins; negative values indicate builder wins.

National Aggregate (United States):

205 U.S. Metro Rankings: Builders vs Sellers on Monthly Payments

What If Builders Used a 2-1 Temporary Buydown Instead?

Our main analysis models a permanent 1.5-point buydown (reducing the 30-year rate from 6.23% to 4.73% for the life of the loan). But many builders offer temporary buydowns instead—most commonly the “2-1 buydown,” which reduces the rate by 2 percentage points in Year 1, 1 point in Year 2, then reverts to the full market rate for Years 3–30.

How would a 2-1 buydown change the national comparison?

National payment comparison:

In Year 1, a 2-1 buydown makes new construction $103 per month cheaper than a discounted existing home, a stronger builder advantage than the permanent buydown delivers. The lower teaser rate gives new-home buyers meaningful relief in that first year.

By Year 2, the advantage flips: the existing home becomes $96 per month cheaper as the buydown rate steps up. From Year 3 onward, when both loans are at the full 6.23% market rate, the existing home wins decisively (by $306 per month) because the new-construction loan is larger (reflecting the higher purchase price).

Over the full 30 years, a permanent 1.5-point buydown is more generous to the buyer than a typical 2-1 temporary buydown, which front-loads savings but provides no relief after Year 2. Our main analysis uses the permanent buydown assumption because (a) it reflects increasingly common practice among large builders for full-term rate locks, and (b) it provides a consistent, conservative basis for comparison across all metros.

Even if we modeled a 2-1 buydown instead, builders would look even better in Year 1 at the national level. But the long-term pattern, where discounted existing homes are cheaper in most metros once the teaser period ends, would remain broadly the same.

Methodology

Data Sources & Time Periods

• Existing-home median sale price: Ziffy, October 2025, “All Homes,” metro-level medians.
• Median price cut percentage: Zillow, October 2025, “All Homes,” metro-level median price reduction for homes with a recorded price cut.
• New-construction median price: Zillow New Construction, September 2025, “All Homes,” metro-level medians. (Source: https://www.zillow.com/research/data/)
• 30-year fixed mortgage rate: Freddie Mac Primary Mortgage Market Survey (PMMS), 6.23% as of November 26, 2025.

All figures are metro-level, and all prices reflect the most recent month available at the time of analysis.

Sample & Geography

• Universe: 205 U.S. metropolitan areas with complete data for existing-home prices, new-construction prices, and median price cuts.
• Regions:
  • Midwest, Northeast, South, West are defined at the state level using standard Census-style groupings.
  • For this analysis, Delaware and Maryland are grouped with the Northeast to reflect housing market linkages to the Mid-Atlantic corridor.

Monthly Payment Calculations

All monthly payment figures represent principal and interest only, assuming a standard, fully amortizing 30-year fixed-rate mortgage at 80% loan-to-value (LTV). Property taxes, homeowners insurance, mortgage insurance, and HOA dues are excluded to provide a clean, apples-to-apples comparison focused on financing costs and home prices.

1. Existing-Home “Discounted” Price
   • Start with the metro’s existing-home median price (Zillow “All Homes”).
   • Apply the median price cut percentage to simulate a typical resale discount: Discounted price = Median existing price × (1 − median price cut %)
   • This discounted price is used as the purchase price for existing homes in all payment calculations.
2. Existing-Home Monthly Payment
   • Loan amount = 80% of the discounted existing-home price.
   • Rate = 6.23% (national 30-year fixed rate from Freddie Mac PMMS).
   • Term = 30 years, fully amortizing.
   • This produces the existing-home monthly payment used throughout the report.
3. New-Construction Monthly Payment (Permanent Builder Buydown Scenario)
   • Loan amount = 80% of the median new-construction price for each metro.
   • Base market rate = 6.23%.
   • Builder buydown assumption: 1.5 percentage point reduction, producing a 4.73% rate for the life of the loan.
   • Term = 30 years, fully amortizing.
   • This produces the new-construction monthly payment under a permanent buydown, which is the core comparison in the report.
4. 2-1 Temporary Buydown Scenario (National Illustration Only)
   • Used only for the national “what if” example, not for metro-by-metro rankings.
   • Assumes the same new-construction loan amount and base market rate (6.23%), but with a 2-1 buydown structure:
     • Year 1: rate reduced by 2 percentage points (to 4.23%).
     • Year 2: rate reduced by 1 percentage point (to 5.23%).
     • Years 3–30: full market rate (6.23%).
   • Payments are calculated for each phase and compared to the existing-home payment at 6.23% to illustrate how a temporary buydown changes short-term versus long-term affordability.

Buydown Assumption

The 1.5 percentage point buydown reflects industry research from John Burns Research & Consulting showing builders typically reduce rates by 1–3 points via 5–6% of home price in points/concessions. Q3 2025 data from Realtor.com confirms new-home buyers averaged rates near 5.27% versus 6.26% for existing homes. The 1.5-point assumption represents the midpoint of commonly reported 1–3 point buydowns.

How We Defined “Winners”

For each metro, we calculated:

• Existing Payment: Payment on the discounted existing-home price at 6.23%.
• New Payment: Payment on the median new-construction price at 4.73%.
• Difference: New Payment − Existing Payment.

We then classified:

• “Seller wins” metros: Difference > 0 (existing homes have lower payments).
• “Builder wins” metros: Difference < 0 (new homes with buydowns have lower payments).

Counts by region (e.g., “sellers win 26 of 28 Midwestern metros”) and averages (e.g., “average seller saving $345 per month where sellers win”) are based on these metro-level classifications.

We also identify “premium metros” where:

• New-construction prices are higher than discounted existing-home prices; and
• New-construction monthly payments are still lower due to the buydown.

These are the 73 metros where financing strategy flips the affordability conclusion relative to simple price comparisons.

Rounding & Units

• Dollar amounts are rounded to the nearest whole dollar in the narrative and tables; internal calculations use full precision.
• Percentages are generally rounded to one decimal place.
• The national figures (e.g., $1,724.73 vs. $1,719.87) are rounded to the nearest dollar when referenced in the narrative (e.g., $1,725 vs. $1,720, a $5 difference).

Limitations

• All property types included (single-family homes, condos, townhomes); the analysis does not distinguish by property type.
• Uniform 80% LTV and interest rates are assumed for all metros; actual loan terms, down payments, and borrower profiles vary.
• Buydown size is fixed at 1.5 percentage points in the main scenario for comparability, although real-world buydowns vary by builder, community, and buyer.
• Local costs excluded: Property taxes, homeowners insurance, HOA dues, closing costs, and maintenance are excluded and can materially affect total housing costs.
• Point-in-time snapshot: The analysis reflects prices and rates as of late 2025; both can change rapidly in response to macroeconomic conditions, local inventory, and policy shifts.

Despite these limitations, the framework provides a consistent, metro-level view of how resale discounts and builder rate buydowns shape monthly payment affordability for typical buyers across the U.S.

About the author:

Steven Glick is the Director of Mortgage Sales at Ziffy and a licensed mortgage originator (NMLS #1231769). He helps investors access smart, flexible financing solutions that support long-term real estate growth.

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