The “teaser rate” is back in Sacramento. But this time, the tease isn’t for an adjustable-rate mortgage, the kind of ballooning loan being blamed for the subprime crisis and the credit crunch. Instead, it’s a teaser for a fixed-rate mortgage. Desperate for buyers, homebuilders with their own lending arms are offering interest below 2.9 percent annual percentage rate for the first year on a 30-year, fixed-rate mortgage. The rate for qualified buyers ends up around 4.9 percent APR, well below the current average market rate of about 6.1 percent.
The spiffy rate on a discounted vanilla mortgage is one of many features homebuilders are deploying to land buyers. Others offer guarantees on lowest list price or promise to sell homes for a penny down. It’s still unclear, though, whether these perks have lured more buyers into the market.