I had a conversation last week with a couple who’d been looking at resale homes around Redding since June. They’d written on two, lost both, and were starting to wonder if they should just wait until spring. Somewhere in that conversation one of them said, almost as an afterthought, “We didn’t really look at new builds. Aren’t those always more expensive?”
That used to be a safe assumption. It isn’t a safe assumption right now.
Rates have climbed hard this month, and that’s putting real pressure on builders — pressure that a private seller down the street simply doesn’t feel. When a builder is carrying a finished house they need to move, they have tools and money that an individual homeowner doesn’t have. If you’re buying in Redding, Anderson, or anywhere in Shasta County this fall, it’s worth understanding how that works before you decide new construction is out of your range.
Where rates actually stand after this week’s Fed meeting
Let’s start with the honest numbers, because that’s what’s driving all of this.
On September 16 the Federal Reserve raised its benchmark rate by a quarter point, to a target range of 3.75%–4.00%. It was a unanimous vote and the first increase in more than three years. The committee’s own projections suggest most of its members think another increase is possible before the year is out.
Mortgage rates had already moved ahead of that decision. Freddie Mac’s weekly survey put the 30-year fixed at 6.95% on September 17, up from 6.76% the week before, with the 15-year at 6.26%. Daily tracking has the 30-year hovering right around 7.05%. A year ago the Freddie Mac average was 6.26%.
One clarification, because I get this question constantly: the Fed does not set mortgage rates. Mortgage rates follow the bond market, which moves on expectations. That’s why rates climbed before the meeting and barely budged the morning after — the market had already priced it in.
So no, I’m not going to tell you rates are great. They’re not. On a $400,000 purchase with 10% down, the difference between last year’s 6.26% and today’s 6.95% is roughly $164 more per month — real money for a real family.
But here’s the part that matters: rates going up is exactly what puts builders in a giving mood.
Why builders are negotiating and your neighbor isn’t
Nationally, 63% of builders reported offering incentives in August, and 35% cut prices outright. New home sales fell to an annual pace of 607,000 in July, down 10.5% from June. And the median price of a new home sold in July was $393,800 — the lowest since July 2021.
Think about what that means from the builder’s side. They borrowed money to build that house. Every month it sits, they pay interest on that loan. They have crews to keep busy and lots already in the ground. A finished, unsold house is a bleeding wound on their balance sheet.
Now compare that to a private seller in, say, the Sunset Terrace area. If their house doesn’t sell, they shrug and stay put. They have a 4% mortgage they love. They can wait you out all winter, and plenty of them will.
That asymmetry is the whole story. The builder has a deadline. Your neighbor doesn’t.
What a Shasta County builder can actually do for you
The most valuable thing a builder can offer in this rate environment usually isn’t a price cut. It’s a rate buydown — and it comes in two flavors that are very different.
A temporary buydown (often a “2-1”) drops your rate by two points in year one and one point in year two, then it snaps back to the real note rate. On that same $360,000 loan, going from 6.95% to 4.95% in year one saves you about $461 a month — which is exactly why builders love putting that number on a flyer. They’re cheaper for the builder to fund, too. A temporary buydown is fine if you genuinely expect to refinance, but you need to afford the full payment in year three regardless. I’d rather you qualify on the real number and treat the first two years as a cushion. That’s doubly true right now, with the Fed signaling it may not be done raising rates.
A permanent buydown uses builder credits to buy discount points that lower your rate for the entire life of the loan. It’s less flashy on a flyer and almost always worth more over time. If a builder offers you a choice, run both numbers before you pick.
Beyond rate, builders will also move on closing costs, design center allowances, appliance packages, landscaping, and sometimes the lot premium. In the Redding area right now there are roughly three builders working in about five subdivisions, with prices generally running from the mid-$350,000s up to around $598,000 on homes from about 1,500 to 2,750 square feet. That’s not a huge selection — but it overlaps the resale market almost exactly, and that’s the point.
How that compares to buying resale in Redding
Redding’s resale median has been hovering right around $390,000 to $400,000, with roughly a 3.6-month supply of inventory and homes going pending in about 20 days. We are not in a frenzy, but we’re not in a buyer’s paradise either. It’s a balanced market with motivated people on both sides.
So when a new build starts in the mid-$350,000s and the builder is willing to fund a rate buydown on top of that, the comparison gets interesting fast. You’re often looking at a similar monthly payment for a house where nothing needs replacing for a decade.
The trade-offs are real, though, and I’d be doing you a disservice if I skipped them:
- Lots are usually smaller and newer neighborhoods have no shade. In a Redding summer, a mature oak is worth actual money.
- Landscaping and fencing are frequently on you. Budget $10,000 to $25,000 depending on the lot, and don’t let that surprise you in month two.
- Location. New subdivisions go where the dirt is available, which may mean a longer drive to work or to the schools you want.
- Mello-Roos or special assessments show up in some newer developments. Ask directly, in writing, before you go under contract.
Four things to do before you walk into a model home
This is where I see people give up leverage without realizing it, so please read this part twice.
Bring your agent to the very first visit. Most builders will honor agent representation only if your agent is with you or registered on that first walk-through. Sign in solo and you may have just given up having someone in your corner at no cost to you. I’ve had to explain this to people after the fact and it’s a bad conversation.
Treat the builder’s preferred lender as a serious option, not an obligation. The biggest incentives are usually tied to using their lender, and sometimes that math genuinely wins. But get a competing quote from a local lender anyway and compare the full picture — rate, points, fees, all of it. Then let the builder know you’re comparing.
Get your own home inspection. New does not mean flawless. A city permit sign-off is a minimum standard, not a quality review. I have never regretted an independent inspection on a new build, and I’ve caught things that mattered.
Read the warranty before you fall in love with the kitchen. Know what’s covered at one year, two years, and ten, and know the process for making a claim.
What I’d tell you if you were sitting across from me
If you’re buying in Shasta County this fall, look at both. Tour the resale listings and tour the subdivisions in the same week, and compare monthly payments rather than sticker prices. The right answer depends on your timeline, your commute, and how much you value a big established lot versus a house where the water heater is brand new.
What I don’t want is for you to rule out new construction because of an assumption that was true five years ago and isn’t true today. Builders are competing for a shrinking pool of buyers right now, and competition is good for you.
And if rates come down eventually? You refinance. You can’t go back and re-buy the house at a better price. I’ll add the honest caveat that the Fed is signaling it may raise again this year, so I wouldn’t buy anything on the assumption that a refinance is waiting for you in six months. Buy a payment you can live with as it stands today.
If you’d like help comparing a new build against a resale listing — or you just want someone to walk the subdivisions with you and ask the uncomfortable questions — I’m happy to help. No pressure, no sales pitch.
530-953-1100 · jcreteam.com/contact · [email protected]
Sources: Federal Reserve FOMC statement and projections (September 16, 2026); Freddie Mac Primary Mortgage Market Survey (September 17, 2026); daily rate tracking as of September 18, 2026; U.S. Census Bureau Monthly New Residential Sales, July 2026; National Association of Home Builders builder incentive survey (August 2026); NewHomeSource and Redfin/Zillow Redding market data (2026). Rates move daily and local figures are approximate — please reach out for current numbers on a specific neighborhood.
About Justin Cartwright — Justin Cartwright is a third-generation Shasta County resident and licensed REALTOR® with Waterman Real Estate in Redding, CA. He and the JCRE Team specialize in helping buyers and sellers navigate the Redding and greater Shasta County market with honest guidance and genuine care. DRE License #02093872 · Waterman Real Estate, 1760 Churn Creek Rd, Redding, CA 96002 · 530-953-1100.
