"Not to exceed seller concession limits." That phrase sits in the middle of a long disclosure from Newmark Homes, dated September 28, 2026. The disclosure covers the 5.49% promotional rate the builder advertises on move-in-ready homes at Cross Creek West. Few buyers read that far. It explains more about the Katy market this fall than any median price does.
Builders in the Katy area are paying to lower the buyer's rate. The disclosure states it directly: the rate offers are "paid for by Newmark Homes on new home contracts closed by November 30, 2026." On October 1, Freddie Mac's weekly survey put the national 30-year fixed average at 7.28%. That was up from 7.03% a week earlier and 6.34% a year ago. A gap of nearly two points between a builder's rate and the open market is a large discount. It just doesn't appear in any sale price.
Two Katy medians drifting toward each other
Here is the puzzle. Houston Association of Realtors data for Katy shows active single-family listings climbing for two straight years, while the price of homes that actually closed has stayed level.
| Measure | Sept 2024 | Sept 2025 | Sept 2026 |
|---|---|---|---|
| Active listings | 2,174 | 2,880 | 3,198 |
| Median active list price | $395,000 | $390,000 | $370,000 |
| Median active days on market | 33 | 39 | 41 |
Closed sales tell a calmer story. In August 2026, Katy recorded 479 closings at a median of $349,990 and 28 median days on market. In August 2025 it recorded 614 closings at a median of $340,062 and 24 days. So fewer homes sold, at a slightly higher median price.
A year ago, the median asking price ran about $50,000 above the median closed price. This fall the gap is closer to $20,000. Asking prices are moving down toward what buyers have been paying, while closed prices stay about where they were.
The pattern holds across Houston. The Houston Chronicle reported that the metro hit 40,750 single-family listings in July, the most HAR has recorded since its data begins in 2002. Over the past two years, median prices have stayed between $325,000 and $345,000. HAR's August 2026 report showed 5.3 months of supply across the region. Sales fell 11.5% year over year, while the median sold price slipped only 1.5%, to $330,000.
A closed median only measures homes that found a buyer. The homes that didn't sell never enter the calculation. The Texas A&M Real Estate Research Center found that unsold Texas listings at the end of July had been on the market an average of 92 days, compared with 63 days for homes that sold. That unsold group is getting bigger in Katy, and the closed median doesn't show it.
Where the discount went
If closed prices aren't falling, the discount has to be showing up somewhere else. In Katy's new-home communities, it shows up in the mortgage.
Here is what builders were advertising at the end of September 2026:
| Builder and community | Advertised offer | Deadline or status |
|---|---|---|
| Newmark Homes, Cross Creek West | 5.49% fixed on move-in-ready homes, builder-paid | Contracts closed by Nov. 30, 2026 |
| D.R. Horton, Sunterra | "Special Interest Rate Offer" on select homes "this fall" | Ongoing; 25 homes listed |
| Coventry Homes, Houston area | Rates as low as 5.49%; savings up to $160,000 on select homes | More than 60 move-in-ready homes listed |
| Perry Homes, including Elyson, Jordan Ranch, Marvida, Sunterra | Up to $55,000 in incentives, including a 4.99% rate bought down with points | Expired; required closing by Sept. 30, 2026 |
Builders do cut sticker prices too. One Sunterra home on Sunhill Drive was advertised at $294,990, reduced from $305,990. Coventry listed a move-in-ready home in Sofi Lakes in Katy at $304,990 with $19,000 in savings. But the larger lever is the rate. Zonda's September 2026 update said builders could use buydowns that bring rates into the 4% to 5% range to make new homes more attractive than resales. It also found that 81% of the communities it tracks nationwide offered incentives on quick-move-in homes in August.
The scale shows up in Newmark's own disclosure. On a $500,000 purchase with 10% down and a conventional loan, the builder estimates principal and interest at $2,552 a month. The same $450,000 loan at the October 1 Freddie Mac average of 7.28% works out to about $3,080 a month. That's a gap of roughly $525 every month. Put another way, at 7.28% and the same down payment, a $2,552 payment buys a home priced around $414,000. In payment terms, the buydown is worth something like an $85,000 price cut on a $500,000 home. Freddie Mac's figure is a national survey average and not a quote, so treat this as an illustration of scale and not a rate anyone is guaranteed.
None of that shows up in a closed sale price. A builder can hold its prices, sell the home, and still have given the buyer a large discount.
The fine print decides who gets the cheap rate
This is where Katy buyers get caught off guard. A rate on a banner is an offer with conditions, and Newmark's September 28 disclosure lists them:
- Credit score. The 5.49% FHA/VA option requires a minimum 680 score. The conventional option requires 780.
- Lender. The buyer must finance through Cornerstone Mortgage Providers to get the promotional rate. The disclosure notes that buyers aren't required to use that lender to buy the home, only to get the incentive.
- Occupancy. The home has to be the buyer's primary residence.
- Deadline. The contract has to close by November 30, 2026.
- Concession cap. The offer can't exceed seller concession limits.
- APR. The stated APR is 6.26% for the FHA/VA example and 5.914% for the conventional example. Both are higher than the 5.49% headline because fees and loan terms are included.
Most of the friction comes from that list. A household with a 740 score doesn't get the conventional terms. An investor buying a rental doesn't qualify. Someone who wants to shop lenders gives up the incentive by doing so. And the deadline puts real time pressure on a buyer who also has a current home to sell. The concession cap means the subsidy has a ceiling, which matters most on higher-priced homes, where the cost of buying down the rate grows with the loan. If a buyer is comparing a builder's monthly payment with a resale home's, the first question is whether they actually meet every condition for that rate.
What ZIP code 77493 shows
Community Impact's August 2026 numbers for six Katy- and Fulshear-area ZIP codes put this competition on a map. Across the area, 563 homes sold, down from 738 in August 2025. Of those, 306 sold between $200,000 and $399,999.
ZIP code 77493 includes Sunterra, near Clay and Bartlett Road off I-10 and the Grand Parkway. In August it had the most sales of the six ZIPs, with 224. It also had the largest year-over-year drop in sales, 34.12%. Its median price rose 6.06%, the biggest increase in the group. So in the ZIP with the most new-home activity, sales fell sharply while the median price went up. That fits a market where the discount is in the financing and the price stays put.
Other ZIPs look different. In 77423, homes averaged 104 days on market, and the median price fell 6.73%, the largest decline. In 77094, the median was $622,000, and homes sold fastest, averaging 44 days. A single "Katy median" combines all of these.
Pricing a resale against a payment
For a Katy homeowner getting ready to sell, this changes who the competition is. A buyer touring a resale home on Saturday may have toured a builder's model on Friday. They may have left with a monthly payment estimate that your home can't match on price alone. HAR chair Theresa Hill told the Houston Chronicle that buyers are taking longer to decide, comparing more homes, and negotiating repairs and other concessions. The same article described sellers as reluctant, or financially unable, to cut prices aggressively.
Texas data shows what that standoff costs. The Texas A&M center reported a median seller price cut of $13,000, or 3.6% of the original list price, in July. A cut that size changes a monthly payment far less than a builder's buydown does. That's one reason a resale listing priced only against nearby sold homes can sit, even when the price looks reasonable.
A resale seller can't match a builder's lender program. What a seller can do is work out what buyers in their price range are being offered nearby. They can also bring the home to move-in condition, since record inventory leaves buyers less patient with deferred repairs. And concession talks can focus on what the buyer cares about most, often the monthly payment and the cash needed at closing. The right mix depends on the home, the price range, and the buyer's lender. That's a conversation for your agent and a loan officer, and none of this is financial advice.
A few questions we hear often
Does a falling list price mean Katy home values are dropping? Not on the closed-sale data so far. Katy's August 2026 closed median of $349,990 was above August 2025's $340,062. The median asking price has fallen as inventory has grown. The Texas A&M center also reported that Houston's July year-over-year price change was the first non-negative reading in 12 months.
Is the 5.49% rate available to every buyer? No. The Newmark terms described above depend on credit score, the builder's chosen lender, primary-residence use, a closing deadline, and seller concession limits. Every builder's terms differ, and they change often. Perry's 4.99% offer, for example, ended on September 30.
Why compare APR and not the advertised rate? APR includes loan costs that the headline rate leaves out. On Newmark's own examples, the 5.49% offer carries an APR of 5.914% or 6.26%, depending on the loan type.
If you're comparing a builder's payment quote with a resale home in Katy, or pricing your own home against the incentives this fall, The Hightower Team can help. We'll go through the offer terms, the APR, and nearby sales with you before you sign anything. Contact Us to talk it through.
