{"id":18509,"date":"2025-07-24T03:19:29","date_gmt":"2025-07-24T03:19:29","guid":{"rendered":"https:\/\/finderica.com\/?p=18509"},"modified":"2025-07-24T03:19:29","modified_gmt":"2025-07-24T03:19:29","slug":"home-builders-are-advertising-monthly-payments-instead-of-home-prices-to-clear-inventory","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=18509","title":{"rendered":"Home Builders Are Advertising Monthly Payments Instead of Home Prices to Clear Inventory"},"content":{"rendered":"
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Once upon a time, it was pretty common to see a new housing development flanked by a sign saying something like, \u201cStarting in the low $300\u2019s.\u201d<\/p>\n

In fact, I can still remember signs that read: \u201cPriced from the $100\u2019s.\u201d<\/p>\n

But now that the price point of new homes doesn\u2019t sound so low, home builders seem to be employing a new strategy.<\/p>\n

Instead of featuring the asking price on some of their ads, they\u2019re leading with a monthly payment to capture more eyeballs.<\/p>\n

It\u2019s a smart approach, and something I came across recently on a trip to Boise, Idaho.<\/p>\n

Using Payments Instead of Prices to Sell Homes<\/h2>\n

\"homebuilder<\/p>\n

Upon landing at Boise\u2019s airport last week, I stumbled upon this advertisement from a local Idaho builder.<\/p>\n

There was no mention of home prices in their giant ad plastered on the skyway of the airport.<\/p>\n

But there was a prominent monthly payment displayed, along with the phrase, \u201cYes, it\u2019s possible.\u201d<\/p>\n

It stood out to me because I\u2019ve been so used to seeing the home builder ads with the home prices listed.<\/p>\n

This particular ad had monthly payments starting in the $1,900s, which could appeal to prospective buyers who might pay less (or a similar amount) in rent.<\/p>\n

Conversely, if they saw an ad saying \u201cstarting in the $300s,\u201d that same renter might think homeownership is completely out of reach for them.<\/p>\n

So home builders can kind of change the narrative to \u201cit\u2019s within reach\u201d by showing the customer a monthly payment instead of a six-figure price tag.<\/p>\n

It\u2019s just like the ads you see for a new car, where the dealer lists a monthly lease\/loan price in big bold font, and a much less prominent price tag below in the fine print.<\/p>\n

You might not think you can afford the $80,000 truck, but if the payment is only X amount per month, you could be convinced otherwise.<\/p>\n

This is what some home builders are doing now to unload their for-sale inventory, especially with affordability so poor today.<\/p>\n

The Home Builder Is Doing the Math for the Customer<\/h2>\n

What\u2019s happening here is the home builder is doing the math for their prospective customer.<\/p>\n

Instead of saying, \u201cHey, our homes cost $325,000,\u201d they\u2019re skipping a step and providing a hypothetical monthly payment their customer might be able to afford.<\/p>\n

We all know mortgages are fairly complicated, and not everyone knows how to break it down from the purchase price.<\/p>\n

And if a customer could potentially be turned off by a certain price (i.e. I would never pay that for a home here!), this approach could assuage any hesitation.<\/p>\n

It might turn out that the renter could afford the $325,000 home as well, but they might not realize it because they\u2019d have to do the math first.<\/p>\n

Or they could simply balk at X purchase price, as noted.<\/p>\n

So the home builders are pretty smart here, and chances are they\u2019ll sell more homes with a campaign like this.<\/p>\n

Granted, I did wonder what the math actually looked like so I dug in a little more.<\/p>\n

To arrive at that ~$1,900 payment, they were using a home priced at $326,990 with a 3.5% down payment.<\/p>\n

That makes it roughly $1,943.00 per month, as the advertisement stated (in the $1,900s).<\/p>\n

But What Monthly Costs Are Actually Included?<\/h2>\n

Now I\u2019m not trying to pick on this particular home builder, but I do want to explain how they arrived at their monthly estimate.<\/p>\n

They did so with an FHA loan, including only the principal and interest portion of the payment.<\/p>\n

As you might know, a mortgage payment is often represented as PITI, or principal, interest, taxes, and insurance.<\/p>\n

There is also compulsory mortgage insurance on FHA loans, which wasn\u2019t included in the ~$1,900 cost, nor were the property taxes or homeowners insurance.<\/p>\n

Oh, and let\u2019s not forget HOA dues, which also seem to apply in the new housing tract.<\/p>\n

If we estimate those costs, it might be $300 a month for property taxes, $75 for homeowners insurance, $50 for HOA dues, and $150 for mortgage insurance.<\/p>\n

Taken together, that\u2019s another $575 per month, which once added to the $1,943 in principal and interest comes out to about $2,500.<\/p>\n

In other words, the $1,900s was used rather loosely and didn\u2019t incorporate many of the actual costs of homeownership that are unavoidable.<\/p>\n

Not to mention other costs like maintenance and repairs, which home buyers often ignore.<\/p>\n

This isn\u2019t to say you should continue renting and not buy a home, but it\u2019s important to get the full picture, especially when making such a big decision.<\/p>\n

Ultimately, if you\u2019re not doing the math (like I just did), you shouldn\u2019t be moving forward.<\/p>\n

A home purchase is clearly a big deal and one that takes a lot of thought, research, and planning. Act accordingly.<\/p>\n

Read on:<\/span> Should I use the home builder\u2019s mortgage lender?<\/p>\n

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\"Colin<\/div>\n
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Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.<\/p>\n<\/div>\n<\/section>\n

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\"Colin<\/div>\n
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