If you’re looking to buy a home in the greater Sacramento region, there’s no question that affordability is an issue. Prices rose quickly during the pandemic as demand far outstripped supply, and more recently, higher mortgage interest rates haven’t helped.
But there is hope.
At the North State Building Industry Association’s recent 2026 Regional Housing Forecast, we learned that many builders are finding ways to make new homes more affordable in a number of ways – many of which are not available to buyers of existing homes.
First of all, many builders are offering strong incentives, such as mortgage interest rate buydowns, which can significantly reduce monthly payments. You may be able to obtain a loan for 2 points lower than the current lender average.
Secondly, more buyers are now considering adjustable-rate mortgages (ARMs), which offer a lower rate for the first few years and can be refinanced into a fixed-rate mortgage if rates drop. That makes the initial years of your loan far more affordable. Every loan product has pros and cons, so it’s important to compare your options, but an ARM is one way to reduce your monthly payments.
Additionally, many builders are finding ways to keep prices down. Research shows that with affordability a major issue, more than 60% of buyers would consider lower-cost flooring, cabinets and counters, moving into a community with fewer neighborhood amenities like trails and recreation facilities and buying a more compact home on a smaller lot.
And because the permitting process incurs significant costs, the BIA continues to seek ways to reduce those costs. For example, fees charged for each new home now average over $100,000.
Finally, it’s important to remember that new homes still offer many advantages compared to existing homes.
When buying a new home, buyers often can select options for flooring, cabinetry, and appliances that meet their needs, so they don’t have to consider making immediate changes if they bought an existing home.
Additionally, new homes are built to modern construction standards and materials, often resulting in better energy efficiency and lower utility costs. All new homes come with solar panels and feature more efficient heating and cooling systems, better insulation, and advanced window systems that conserve energy.
Finally, and perhaps most importantly, new homes also require less maintenance since everything from appliances to roofing is brand new and under warranty. This can save homebuyers significant money and time as they won’t have to deal with the wear and tear that often comes with older homes. This is particularly attractive for buyers who are not inclined towards DIY projects or who prefer a more turnkey solution when moving into a new house.
Shopping for a home right now can feel overwhelming, but there are more options than many buyers realize. Exploring new home communities and talking directly with builders can help you compare incentives, understand costs and find a home that fits your budget.
Murphy is President & CEO of the North State Building Industry Association, which represents builders, developers, subcontractors, suppliers and related professionals dedicated to providing new housing opportunities in the Greater Sacramento region.
