Homebuyers Experience Diverse Mortgage Rates, Fueling Surprising Surge in New Home Sales

New residential home sales in the US surged in September, while existing home sales stagnated due to owners being reluctant to move and buy another home at higher mortgage rates. The lack of existing homes on the market has forced buyers to opt for new construction, and builders are sweetening the deal by offering discounted mortgages and other incentives. Mortgage rate buydowns, where builders pay the difference between market rates and the rates offered, are the most desired incentive. Builders are also covering closing costs and constructing more speculative homes to provide buyers with a clearer idea of their mortgage rates. The surge in new home sales is attributed to a combination of incentives and low existing home inventory.