05/10/2026
One concession cuts the buyer's monthly payment by $410. The other cuts it by $154. Nearly the same spend from the builder. Example on a $450,000 home.
Baseline: 66% of builders used sales incentives in September 2026, 38% cut prices (average 6%, six months running). D.R. Horton's cancellation rate hit 20% in fiscal Q3, up from 17%, called "still largely qualification." The payment is what blocks the sale.
Per $1,000 the builder spends, the buyer's monthly payment drops by: $5.70 on a price cut, $16 on a permanent buydown, $55 on a 2-1 buydown (year one only). Stated: $450,000 home, 90% loan, 30 years, 6.5% market rate, $2,560 baseline.
Four options, 20% margin, $360,000 cost:
2-1 buydown (year 1 at 4.5%, year 2 at 5.5%): costs $9,200 (2.0% of price). Buyer pays $2,052 year 1, $2,300 year 2. Margin after: 18.3%.
Permanent buydown to 5.5%: costs $16,200 (3.6%). Buyer pays $2,300. Margin after: 17.0%.
6% price cut: costs $27,000. Buyer pays $2,406, saves $154. Margin after: 14.9%.
Permanent buydown to 4.9% (1.6 points): costs $25,920 (5.8%). Buyer pays $2,149, saves $410. Margin after: 15.1%.
For nearly equal spend, the buydown moves the payment 2.7x more than the price cut.
The play:
Set the ceiling from a margin floor. At 15% floor on $360,000 cost, minimum net price is $423,529, so the concession ceiling is $26,471 (5.9% of price). Above it needs owner sign-off.
Diagnose the objection first: payment or qualification, waiting for lower rates, or price vs comparable homes.
Match the tool. Payment or qualification: permanent buydown (confirm with the lender how the qualifying rate is set). Waiting for lower rates: 2-1 buydown plus a refinance plan. Price cuts only for completed homes past 60 to 90 days, or homes priced above comps.
Quote every option as a monthly payment with a 14-day expiry. Never stack a buydown, closing credit, and upgrades on one buyer.
Track weekly: concession as a percent of price, net margin on signed contracts, cancellations, completed unsold homes by age. Target cancellations under 20%.
DM "BUYDOWN" and Macwood will send the full concession model.