Temporary Buydowns

Rate buydowns continue to soar as borrowers look for ways to combat the affordability crisis, according to new data from Black Knight. In the third week of January, 57% of buyers paid at least a half-point on a permanent buydown, while 44% paid a full point, and almost 25% bought down two or more points. In total, borrowers paid an average of 1.25 points down, at an average of $4,300 per borrower. Pre-pandemic buydowns from 2018 to 2020 averaged only 0.5 points, around $1,500. This is not the high point for buydowns, which peaked in September and October 2022 with 71% of buyers buying down their rates. But it points to a continuing trend of buyers trying to decrease their…