Buying a Home in DFW in 2025 - Even With 7% Interest

If you’ve been watching the Dallas-Fort Worth real estate market lately, you’ve probably noticed something puzzling: mortgage rates are hovering near 7%, property taxes are rising, insurance premiums are climbing, and yet people are still buying homes. You might be scrolling through your social media feed, seeing friends and family celebrating new home purchases, wondering, “How on earth are they doing this?”

What used to feel affordable and attainable has quickly slipped out of reach for many. But here’s the good news — there are proven strategies, or “cheat codes,” that savvy buyers are using in 2025 to make homeownership possible and even save thousands of dollars annually on their mortgage payments.

My name is Zak Schmidt, and my team and I specialize exclusively in new construction real estate in the DFW area. Today, I’m going to share insider insights on how buyers are navigating this market, leveraging builder inventory, incentives, and interest rate buy-downs to secure homes with less out-of-pocket cost and better monthly payments. Whether you’re a first-time buyer, relocating to Texas, or just trying to make a smart move, this article will give you the tools and knowledge to win in today’s market.

Table of Contents

• Why Buying a Home Feels Impossible in 2025
• The Power of Builder Inventory in DFW
• What Builders Are Offering Right Now
• Real Example: $11,000 a Year Saved on Mortgage
• Current Builder Incentives You Need to Know
• VA Loan Advantage: Little to No Money Out of Pocket
• Secret Rates and Buydowns You Can Ask For
• How Temporary Rate Buydowns Really Work
• Hidden Markets to Find the Best Deals in DFW
• Why Builder Inventory Is the #1 Strategy
• How You Can Start Saving Like Everyone Else
• FAQs About Buying a Home in DFW in 2025 - Even With 7% Interest
• Final Thoughts

Why Buying a Home Feels Impossible in 2025

Let’s start with the reality check: mortgage interest rates have risen to nearly 7%, and they feel like they’ve been stuck there forever. Combine that with higher property taxes and rising home insurance costs, and it’s no wonder many buyers feel priced out.

Homes that once seemed affordable now come with much higher monthly payments, making it difficult to justify buying at all. Yet, somehow, some buyers are still closing deals and moving into new homes.

So, what’s the secret? How are these buyers making it work? The answer lies in understanding the current market dynamics and tapping into builder incentives and inventory that most buyers overlook.

The Power of Builder Inventory in DFW

Here’s the biggest cheat code I can give you right now: buyers are snapping up inventory homes from quality production builders in the Dallas-Fort Worth area. Inventory homes are new homes that builders have already constructed and are ready for immediate move-in, typically closing within 30 to 60 days.

This is a game changer because builders currently have a growing inventory of these homes sitting on the market. These homes are costing the builders money the longer they remain unsold, so they are highly motivated to move them quickly.

That motivation translates into significant price reductions, interest rate buy-downs, closing cost help, and other incentives that are often advertised openly on builder websites — sometimes before you even have to ask.

Imagine getting a home with all the bells and whistles — washer, dryer, fridge, appliances — plus a mortgage payment that’s thousands of dollars less per year than you might expect. That’s the reality for many buyers leveraging builder inventory right now.

What Builders Are Offering Right Now

Builders are actively offering incentives such as:

• Interest rate buy-downs: Builders purchase “forward commitments” on mortgage rates, which allows them to buy down your interest rate to a lower fixed rate for the life of the loan or for a temporary period (1-2 years) before it steps up.
• Price reductions: Many homes have seen price cuts, sometimes tens of thousands of dollars off the original list price.
• Closing cost assistance: Builders often offer thousands of dollars toward closing costs, reducing your upfront cash needed.
• Bonus incentives for agents: Builders are incentivizing real estate agents to bring buyers to their inventory homes, meaning more motivated sellers and better deals for buyers.

All these incentives add up to real savings — and the ability to buy a home that might otherwise seem out of reach.

Real Example: $11,000 a Year Saved on Mortgage

Let me share a recent example from a client we worked with. They were looking at a home priced around $745,000 — not your typical starter home, but still a great case study to illustrate how these strategies work.

Here’s what happened:

1. The purchase price was negotiated down by $40,000 from $785,000 to $745,000.
2. They put 5% down on a conventional loan.
3. The builder bought their interest rate down from around 6.8% to a fixed 5% for the life of the loan.
4. The home was in a neighborhood with a tax rate under 2%, which helped keep monthly costs manageable.

The impact? They saved an estimated $909 per month, or about $10,912 per year, on their mortgage payments compared to what they would have paid at prevailing rates without the buy-down. That’s real money back in their pocket every year.

This deal wasn’t a fluke — it’s happening all over DFW as builders work hard to move inventory homes.

Current Builder Incentives You Need to Know

To give you a clearer picture, here are some of the current offers you’ll find from builders in the DFW market:

• Meritage Homes: Offering fixed rates around 4.99% with up to $30,000 in closing cost assistance on homes under $400,000. Many homes come with appliance packages included.
• Trophy Homes: Similar incentives with competitive rates and closing cost help, especially in the sub-$500,000 market.
• Pace Setter Homes: Offering 4.99% fixed rates with no closing costs on select homes.
• Highland Homes: Featuring a “secret” 2-1 buy-down program with rates starting at 3.99% the first year, stepping to 4.99% the second year, and 5.99% fixed thereafter. With the right lender, you could even lock in a better rate than advertised.

These incentives demonstrate how much builders are willing to invest to move homes off their lots. Savvy buyers who know where to look and how to negotiate can take full advantage.

VA Loan Advantage: Little to No Money Out of Pocket

If you qualify for a VA loan — which means you’ve served our country and earned this valuable benefit — you have one of the best loan products available. When combined with builder incentives, VA loans can allow you to buy a home with very little money out of pocket, or in some cases, walk away from closing with a check in hand.

In the past 30 days alone, we’ve had three VA clients close on new construction homes in DFW, all benefiting from these powerful incentives.

If you qualify, I highly encourage you to explore new construction homes with a VA loan — it’s a winning combination.

Secret Rates and Buydowns You Can Ask For

One of the most overlooked strategies is asking builders about their buy-down programs. Some builders don’t openly advertise the best rates or buy-down options on their websites, but they exist — you just have to ask.

For example, Highland Homes offers a 2-1 buy-down program (3.99% first year, 4.99% second year, 5.99% fixed afterward), but with the right lender, you can potentially lock in an even better rate, such as a 4.9% fixed rate with FHA or VA financing.

These stair-step buy-downs are not scams or gimmicks. They are fixed-rate loans with a planned increase in payments over time, allowing buyers to ease into higher payments gradually. Many buyers plan to refinance before the rate steps up to lock in a lower rate if market conditions improve.

How Temporary Rate Buydowns Really Work

Temporary rate buydowns are structured to start with lower monthly payments that increase over a set period until the loan reaches its fixed rate. Here’s a typical example:

• Year 1: Payments calculated at 3.99% interest
• Year 2: Payments increase to 4.99%
• Year 3: Payments rise to 5.99% and remain fixed thereafter

This stair-step approach gives buyers breathing room during the initial years of homeownership, which can be especially helpful if they expect their income to grow or plan to refinance when rates improve.

Personally, I recommend getting a permanent buy-down if possible, but temporary buy-downs are an excellent option if you want to minimize your initial monthly payments and have a plan to refinance.

Hidden Markets to Find the Best Deals in DFW

Another major cheat code? Don’t buy where everyone else is buying.

While areas like Frisco, Celina, and Prosper are booming, the best deals right now are often found in less obvious “secret” markets around DFW, including:

• Rockwall
• Fate
• Royse City
• Lavon
• Wolfe City
• Red Oak
• The Aubrey (northwest of DFW)

Many of these areas offer lower tax rates, boutique communities, and quality builders putting great products on the ground. You avoid the bidding wars and inflated prices common in hot markets, and you can get more home for your money.

Why Builder Inventory Is the #1 Strategy

Builder inventory homes are your best bet right now if you want to buy a home in 2025. Here’s why:

• Immediate availability: You can close in 30-60 days and move in quickly.
• Price reductions and incentives: Builders are motivated to sell and offer significant discounts.
• Interest rate buy-downs: Builders can buy down your mortgage rate, saving you thousands annually.
• Lower out-of-pocket costs: Closing cost assistance and other incentives reduce upfront expenses.

If you have a bit more time, building a home from the ground up is still an option, and builders continue to incentivize those deals. But the heavy hitters, the big savings, and the easiest moves right now are happening in builder inventory homes.

How You Can Start Saving Like Everyone Else

The market is shifting. Inventory is increasing, listings and price reductions are rising, and builders are shelling out millions on incentives and buy-down programs. This is your window to capitalize.

Here’s how to get started:

1. Browse builder inventory listings: Focus on new construction homes that are ready or nearly ready to move in.
2. Ask about incentives: Don’t hesitate to inquire about price reductions, closing cost help, and especially interest rate buy-downs.
3. Consider neighborhoods with lower tax rates: Areas like Rockwall and some southern DFW suburbs can save you money long term.
4. Use the right loan product: If you qualify for a VA loan, use it. If not, explore FHA or conventional loans with builder buy-downs.
5. Work with a knowledgeable agent: Someone who understands new construction, builder incentives, and the local market can help you negotiate the best deal.

We’ve created a resource on our website where you can browse new construction homes by price range, community, and builder, making it easy to find the right fit for your budget and timeline. Check it out  here.

Remember, these opportunities won’t last forever. Builders have to move inventory, and the incentives will evolve as the market changes. The time to act is now.

FAQs About Buying a Home in DFW in 2025 - Even With 7% Interest

Are builder incentives and interest rate buy-downs real or just marketing gimmicks?

They are very real and widely used strategies. Builders buy forward commitments on mortgage rates to offer buyers lower rates or temporary buy-downs. This is a win-win: buyers get lower payments, and builders move inventory faster.

Can I get a buy-down with any lender?

Buy-downs are typically arranged through builder-preferred lenders who have agreements with the builder. Working with these lenders can maximize your incentives and streamline the process.

What is the difference between a permanent and temporary buy-down?

A permanent buy-down lowers your interest rate for the entire life of the loan, typically 30 years. A temporary buy-down reduces your payments for 1-2 years before stepping up to the full rate, giving you initial savings.

Are inventory homes overpriced compared to resale homes?

Inventory homes may sometimes have higher list prices, but when you factor in builder incentives, buy-downs, and closing cost assistance, they often offer better overall value than resale homes without these perks.

How much can I save on my mortgage payment with these strategies?

Savings vary based on the home price and incentives, but it’s not uncommon to save several hundred dollars per month. For example, one client saved nearly $11,000 annually on a $745,000 home.

What neighborhoods should I look at for the best deals in DFW?

Secret markets like Rockwall, Fate, Royse City, Lavon, Red Oak, and some northwest communities offer great deals with lower taxes and quality builders. Avoid the overheated markets where competition drives prices up.

Can I buy a home with little or no money down using these strategies?

Yes, especially if you qualify for a VA loan or certain FHA programs. Builders often include closing cost assistance and other incentives that reduce your upfront cash needed.

How do I find the best builder inventory homes?

Use specialized new construction search tools on websites dedicated to builder homes, work with a real estate agent who focuses on new construction and monitor builder websites for updated inventory and incentives.

Is it better to buy an inventory home or build from scratch?

If you want to move quickly and take advantage of current incentives, inventory homes are the best choice. Building from scratch can still be a good option if you have more time and want customization, but incentives tend to be less aggressive.

Final Thoughts

Buying a home in Dallas-Fort Worth in 2025 might seem daunting with mortgage rates near 7% and rising costs, but it’s far from impossible. The secret lies in leveraging builder inventory homes, negotiating price reductions, and taking advantage of interest rate buy-downs and closing cost incentives.

By focusing on these strategies, buyers are saving thousands of dollars annually, reducing upfront costs, and moving into high-quality new homes faster than ever.

If you’re ready to start your homebuying journey, don’t hesitate to reach out to me, Zak Schmidt, your knowledgeable new construction specialist who can guide you through the process, uncover these deals, and negotiate the best terms on your behalf. You can contact me at 469-707-9077 or visit my www.zakschmidt.com.

Remember, the market is shifting, builder inventory is increasing, and incentives won’t last forever. Now is the time to strike and get the home you want in DFW in 2025.

Good luck out there — and happy house hunting!