Buyers who have spent 2026 waiting on a cheaper monthly payment have mostly been waiting on one variable, which is the direction of mortgage rates.
That wait grew slightly more expensive last week, when Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed-rate mortgage at 6.58% as of July 23, up from 6.55% the previous week and higher for a second consecutive week. Rates are still running below the 6.74% average recorded at this point last year, though the weekly direction has not cooperated with anyone timing a purchase around cheaper financing.
On Monday’s episode of the BiggerPockets Real Estate Podcast, chief investment officer Dave Meyer and guest Brian Waters spent most of the conversation on investment real estate, though the mechanism they described is running underneath the wider housing market as well. Waters, a Los Angeles fire captain who has built a portfolio of 20 rental properties while working full time, described what the companies selling to him are currently putting on the table.
“So right now they’re buying the rates down to five and a half percent or lower for you at no cost,” Waters said.
A second straight week of rising rates is not the news homebuyers want, but the shift underway is that the discount they have been waiting for the market to deliver is now coming from sellers who need a deal to close. While that arrangement is specific to the kind of property Waters buys, the lever behind it is one ordinary homebuyers can pull on a normal listing, and many of them already have.
What BiggerPockets’ Dave Meyer said about seller-funded rate buydowns
Waters buys what the industry calls turnkey rental property, meaning a company finds the house, renovates it, places a tenant and then manages the property for an owner who lives somewhere else. The discounted rate he mentioned is one piece of a wider package those companies have been assembling to attract buyers.
“They’re giving us deals on the property management fees,” Waters said. “They’re also giving us rent guarantee for the year.”
The rent guarantee is a recent addition, and Waters said it exists because the companies know things can often go wrong after a sale closes. Meyer traced the concessions back to how the companies offering them make money in the first place.
“If you think about the way that a turnkey provider, one of these companies operates in their business model, they need to move deals,” Meyer said. “They rely on velocity and volume of deals to make money.”
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In a rate buydown, someone pays the lender money up front at closing, and in exchange the lender charges a lower interest rate, either for the first couple of years of the loan or for its full term. The cost is real and somebody covers it, but when that somebody is the seller, the buyer collects a smaller monthly payment without paying for the reduction. Sellers whose income depends on closing deals quickly have a reason to write that check that a homeowner who can afford to wait for a better offer usually does not.
Buyers have generally treated a lower monthly payment as something the broader market would eventually hand them, and what Meyer described works differently, turning instead on how badly one particular seller needs a deal to close. That pressure is not unique to rental property, and can be leveraged by everyday homebuyers as well.
What the incentive shift could mean for homebuyers
Meyer drew the comparison to new construction himself, where builders face the same pressure to keep inventory moving.
“In the same way, if you look at what’s going on in new construction with builders right now, they’re offering incentives too because their business model relies on velocity,” Meyer said. “They need to keep moving stuff. And so that presents a great opportunity.”
Incentives showed up in 63% of July’s builder responses to the National Association of Home Builders and Wells Fargo Housing Market Index, a level that has not slipped under 60% in 16 months. Price cuts came from 37%, averaging 6%. Census data released July 24 put the supply of new homes for sale at 9.3 months in June, which is the backdrop those incentives are answering.
Ordinary sellers have been doing a version of the same thing. Concessions appeared in 46.2% of U.S. home sales over the three months through May 31, according to Redfin, which was a record for that window and roughly three percentage points above where the figure stood a year earlier.
Under Redfin’s methodology, anything a seller pays to lower the buyer’s total cost counts, from repair money to closing help to a funded rate reduction, while a straight cut to the asking price does not. Nearly half of recent buyers, in other words, negotiated something beyond the price itself.
A buyer negotiating an ordinary resale home in that environment can ask a seller to fund a rate buydown the same way the companies selling to Waters fund his, and the request has become relatively common.
Meyer flagged a tradeoff on the investment side that applies to ordinary buyers as well.
“The trade-off that you get with a turnkey provider is that a lot of the equity growth of doing a renovation yourself, that opportunity is gone because they’ve done that and they’re selling it to you hopefully at a fair price,” Meyer said.
The same logic shows up in the price on a resale or new construction purchase. A funded buydown lowers what a buyer pays every month without lowering what the home costs, so the benefit lands in the payment rather than in equity, and a buyer who accepts a bought-down rate instead of a lower price starts out owing more against the house.
What has not changed is the rate market itself, which has now moved higher two weeks running in Freddie Mac’s survey. A seller-funded buydown does not change that direction, but does change who absorbs the cost of it, which can be meaningful for the right buyer.
Key takeaways for 2026 homebuyers
- Mortgage rates moved higher again in July: Freddie Mac’s July 23 survey put the 30-year fixed at 6.58%, up from 6.55% a week earlier and higher for a second straight week, though still below the 6.74% average of a year ago.
- Nearly half of recent home sales included a seller concession: Redfin found sellers gave concessions in 46.2% of sales during the three months ending May 31, up from 43.1% a year earlier, and its count includes seller-funded mortgage rate buydowns.
- Seller-funded buydowns are where payment relief is showing up: Waters said the companies selling turnkey rental property to him are currently buying rates down to 5.5% or lower at no cost to him, alongside management fee discounts and a year of guaranteed rent.
- Builders are competing on financing because inventory is sitting: NAHB data shows 63% of builders used sales incentives in July, a 16th consecutive month at or above 60%, while Census data put new home supply at 9.3 months against a $398,300 median price.
- The discount comes out of the payment, not the price: As Meyer noted on the equity side of turnkey deals, a buyer who takes a funded rate instead of a lower purchase price gains monthly affordability without gaining position in the property.
Related: Americans face uncomfortable decision after housing market news
