Builder Incentives in Utah: A Complete Guide

Why Builders Offer Incentives

Utah builders use incentives to attract buyers, move inventory, and compete with the existing home market. In 2024–2025, incentives have been especially strong because many existing homeowners hold mortgages at rates well below today's market — creating less resale inventory and more competition among builders for buyers.

Understanding these incentives is essential because they directly affect your monthly payment, closing costs, and total cost of ownership. Two homes with the same purchase price can have very different monthly payments depending on the incentive package.

Types of Builder Incentives

Rate Buydowns

The most impactful incentive for most buyers. A rate buydown reduces your mortgage interest rate, lowering your monthly payment. There are two main types:

• Temporary buydown (2-1 or 3-2-1): Reduces the rate for the first 1-3 years, then adjusts to the full rate. The builder prepays the interest difference upfront.
• Permanent buydown: Reduces the rate for the life of the loan by purchasing discount points. More expensive for the builder, but more valuable for the buyer.

A 2-1 buydown on a $450,000 home at 7% can save $300–$500/month in the first year.

Closing Cost Credits

Builder contributions toward buyer closing costs — typically $5,000 to $20,000 depending on the home price and the builder's current promotion. These credits reduce the cash you need at closing and can sometimes be applied toward buying down your rate.

Price Adjustments

Direct reductions in the purchase price, especially common on completed inventory homes (also called "spec homes" or "move-in-ready" homes). Builders are more motivated to negotiate price on homes that are already built because carrying costs add up.

Design and Upgrade Credits

Allowances toward upgrades at the design center — flooring, countertops, fixtures, and appliances. These credits can range from $5,000 to $25,000+ depending on the builder and community. Be aware that builder upgrade pricing is typically marked up, so a $10,000 credit may buy less than you'd expect.

How to Compare Incentives

Not all incentives are created equal. Here's how to evaluate them:

• Calculate the monthly payment impact. A rate buydown that saves $400/month is worth more than a $5,000 closing cost credit in most cases.
• Consider the timeframe. Temporary buydowns expire. If you plan to stay in the home long-term, a permanent buydown or price reduction may be more valuable.
• Watch for preferred lender requirements. Many incentives are tied to using the builder's preferred lender. Compare their rates and terms against other lenders — sometimes the "incentive" disappears when you factor in a higher base rate.
• Evaluate upgrade credits carefully. A $15,000 upgrade credit sounds generous, but if the builder charges $15,000 for work that an independent contractor would do for $8,000, the real value is less.
• Ask about expiration dates. Incentives change frequently. Get any promised incentive in writing with a clear expiration date.

Our maximize incentives service includes a detailed incentive comparison for every builder you're considering.

Current Incentive Trends in Utah

As of early 2025, Utah builder incentives are among the strongest in recent years. Key trends include:

• Rate buydowns are the most common incentive, with 2-1 and 3-2-1 temporary buydowns widely available
• Closing cost credits of $10,000–$20,000 are common on homes above $400,000
• Move-in-ready inventory homes offer the deepest discounts, sometimes $20,000–$50,000 below original list price
• Design center credits of $10,000–$15,000 are standard in many communities
• Some builders are offering permanent rate buydowns on select lots

Incentive availability varies by region, builder, and community. Contact us for the latest incentives in your target area.