Affordability in Utah New Construction

What makes up a monthly payment

A monthly mortgage payment typically includes five components:

• Principal. The portion that reduces the loan balance.
• Interest. The cost of borrowing, set by the mortgage rate.
• Property taxes. Varies by county and assessed value.
• Homeowners insurance. Protects the property and structure.
• HOA fees. Common in master-planned communities. Covers shared amenities and maintenance.

When comparing homes, the monthly payment provides a more accurate picture of affordability than purchase price alone.

How incentives change the payment

Builders use incentives to attract buyers, especially in competitive markets. The most impactful types include:

Rate buydowns

A temporary or permanent reduction in mortgage interest rate, paid for by the builder. A 2-1 buydown can lower payments by hundreds of dollars per month in the first two years.

Closing cost credits

Builder contributions toward buyer closing costs, reducing the cash needed at settlement. These credits can also be applied to rate buydowns in some cases.

Design credits

Allowances toward upgrades — flooring, countertops, fixtures — that are included in the base price rather than added on top.

Why purchase price is not the full story

Two homes with the same purchase price can have very different monthly payments depending on the interest rate, tax rate, insurance costs, and HOA fees. A home priced $20,000 higher but with a builder-funded rate buydown may cost less per month than the "cheaper" alternative.

Existing home prices in Utah often remain firm because most current homeowners hold mortgages at rates well below today's market — creating little incentive to sell. Builders, by contrast, use incentives to compete for buyers. This dynamic can make new construction surprisingly competitive on a monthly payment basis.

All payment estimates are for illustrative purposes only. Actual payments depend on loan terms, interest rate, credit profile, down payment, property taxes, insurance, and HOA fees. Confirm all figures with a licensed lender before making any financial decisions.