As the Federal Reserve raised interest rates for the third consecutive quarter in September 2022, Wedgewood Homes moved quickly to address one of the biggest obstacles homebuyers were facing — affordability. Inman covered Wedgewood Homes' response in a piece by broker Troy Palmquist, who has worked with Wedgewood Homes on disposition in multiple states.
What Wedgewood Homes Did
As one of the largest sellers of single-family homes in the nation, operating across 22 states and more than 800 cities, Wedgewood Homes responded to the rate hike with an immediate plan — covering closing costs and reducing buyer payments through an interest rate buydown. Wedgewood Homes also partnered with preferred lenders across the country to split the buydown costs, creating a genuine win for homebuyers, agents, lenders, and Wedgewood Homes alike.
Why a Buydown Works Better Than a Price Reduction
The Inman piece breaks down exactly why seller-paid interest rate buydowns are a more effective tool than price reductions in a high-rate environment. The math is compelling — to give a buyer the same monthly payment relief as a 3-point rate buydown, a seller would need to reduce the price by approximately $60,000. The buydown achieves the same result at a fraction of the cost, allowing sellers to protect their net proceeds while giving buyers the monthly payment they need to move forward.
This approach is particularly useful for agents working with buyers who are hesitant to commit in a rising rate environment. Rather than waiting for conditions to improve, a buydown gives buyers a concrete path forward today.
For agents working with Wedgewood Homes properties, understanding buydown options is an important part of getting deals done in this market. Learn more about working with Wedgewood Homes as an agent partner.