New Construction Vs. Resale In Katy: The Bill That Arrives After You've Already Celebrated

Here's how it usually goes. A buyer tours a resale home in an established Katy neighborhood on Saturday morning, then drives fifteen minutes to a model home in one of the newer master-planned communities that afternoon. The resale needs a coat of paint and the landscaping has some age on it. The new build has a builder's rep waiting with a rate that beats anything the buyer's own lender quoted them. The decision looks easy.

Then the following January arrives, the county finishes reassessing the finished home at full market value, and the tax bill lands somewhere the buyer didn't budget for. If they missed a filing deadline that had nothing to do with the mortgage, the surprise gets worse. What looked like the better deal at closing turns out to have simply deferred part of its real cost to the following tax year.

This is not a story about builders behaving badly. It's a story about where the savings actually live. In Katy's 2026 market, the incentive that makes a new build look cheaper than a comparable resale almost never shows up as a lower price. It shows up as a lower payment, for a while, funded through a structure that has its own expiration date and its own tax consequences. Comparing the two homes by rate alone misses the part of the math that determines what you're actually paying by year three.

What The Builder Is Actually Discounting

Most builder incentives across the Katy and Fulshear corridor right now come in one of two forms: a temporary rate buydown or a permanent one. A 2-1 buydown cuts the interest rate by two points in year one and one point in year two, then reverts to the full note rate in year three. A permanent buydown costs the builder roughly one percent of the loan amount for every quarter-point of rate reduction, paid upfront through discount points, and it holds for the life of the loan.

The dollar value of these packages typically runs $8,000 to $25,000 depending on the community and price point, and some builders layer in design center credits on top. On a $332,500 loan, a 2-1 buydown works out to roughly $7,500 in total payment relief spread across those first two years, or about $300 to $500 a month on a $350,000 home in year one. That's real money. It's also money with a countdown attached.

Active Katy listings this August average close to $461,000, around $173 a square foot, and the median home is sitting on the market for about 68 days before going under contract. That slower pace is exactly why builders lean so heavily on payment relief instead of price cuts. A buyer with more homes to choose from wants the monthly number to work today, and a subsidized rate does that without anyone having to touch the sticker price.

Why The Discount Shows Up In The Payment, Not The Price

Here's the part that doesn't get explained at the sales desk. Builders in active communities are managing an inventory of homes that will keep closing for months or years after your contract. If a builder cuts the list price on your unit to make a sale, that lower number becomes the new comp for the next appraisal, and the one after that, for every neighbor whose home hasn't closed yet. A rate buydown doesn't touch the recorded sale price. The contract still reads full value. The builder protects the community's price floor while still making your payment competitive.

That's why buyers cross-shopping communities like Sunterra, Elyson, Cane Island, Jordan Ranch, Firethorne, Seven Meadows, Cross Creek Ranch, Grand Lakes, Harvest Green, Cinco Ranch, and Tamarron are seeing the same pattern from builders including Perry Homes, Chesmar Homes, Taylor Morrison, Pulte, David Weekley, Highland Homes, and DR Horton. The incentive language varies by builder, but the underlying choice is consistent: protect the price, subsidize the payment.

That structural preference has a side effect worth sitting with. Some builders offset the cost of the buydown by building it into the base price in the first place, adding roughly two to four percent before the incentive is ever applied. The buyer isn't necessarily getting a $10,000 gift. In some cases they're getting $10,000 of relief on a price that was already marked up to fund it.

The Tax Line Nobody Reads Until The First Bill Arrives

New master-planned communities in the Katy and Fulshear corridor are almost always financed in part through a Municipal Utility District or a Public Improvement District, which pays for the roads, water, and drainage infrastructure before a single house goes up. That financing shows up permanently as part of the property tax rate, and it typically runs between 3.0 and 3.5 percent across communities in this corridor. Cross Creek West publishes its current combined rate at 3.16 percent, which sits squarely in that range and gives a useful anchor for what a MUD-financed rate actually looks like in practice.

Established Katy neighborhoods built before this wave of master-planned development, including areas along the I-10 corridor such as Memorial Parkway, Parkway Villages, and Pine Forest, generally don't carry that same layer of infrastructure debt in their tax rate, because the utility districts serving those areas were either never structured this way or have already retired their bonds. That difference doesn't show up anywhere on the builder's rate sheet, because it isn't the builder's number to disclose. It's the taxing authority's, and it applies for as long as you own the home, long after the 2-1 buydown has expired.

The January Surprise

New construction carries one more wrinkle that resale buyers never deal with. During the build, the county typically assesses the property at its incomplete-improvement value, meaning the taxable value reflects a home that isn't finished yet. Once the home closes and the improvement is complete, the county reassesses it the following January at full market value. That's the moment the tax bill catches up to the home you actually bought.

Texas gives buyers a real offset here. A homestead exemption removes $100,000 from the school district's taxable value, saving roughly $1,400 a year on a median-priced new build. But the filing has a hard deadline: April 30 of the year after closing. Miss it, and you lose the entire first-year reduction. On a $350,000 new build, skipping that filing adds roughly $115 a month to the effective payment, which cancels nearly half of the $300 to $500 a month the typical rate buydown was saving in the first place.

Put those two mechanisms side by side and the pattern is clear. The buydown gives you money in year one and two. The reassessment and the tax rate take some of it back starting in year two, and if the homestead paperwork slips, they take back even more than the buydown gave.

What This Means When You're Comparing Two Houses This Weekend

A resale listing and a new construction listing with the same advertised monthly payment are not the same offer. To compare them honestly, you need three numbers side by side: the note rate you'll actually pay once any temporary buydown expires, the full property tax rate including any MUD or PID layer, and whether the homestead exemption timeline lines up with your closing date. A resale home in an established Katy neighborhood might carry a higher rate today but a lower, stable tax rate for the life of ownership. A new build might win on rate for two years and then hand that advantage back through a tax bill the brochure never mentioned.

None of this means new construction is a bad choice in Katy. Builders are offering genuine value in a market where homes are taking longer to sell and buyers have more room to negotiate. It means the comparison has to run past the model home and into the tax rate sheet, because that's where the real cost of ownership actually lives.

A quick side-by-side, using figures from current builder and tax data in the corridor:

A Few Questions Worth Asking Before You Sign

Does every new construction community in the Katy-Fulshear corridor carry a MUD tax? Not universally, but it's common in communities built on land developed specifically for this wave of master-planned growth. The rate isn't permanent forever either. It typically declines over time as the district pays down its bonds, though that can take years.

What happens the day the builder's rate buydown ends? With a 2-1 structure, the rate steps back up to the full note rate at the start of year three. It's worth running that year-three payment number before you fall in love with the year-one number.

Is the homestead deadline different for a resale purchase? No, the April 30 filing deadline applies either way. The difference is that a resale home's assessed value is already established, so there's no incomplete-improvement reassessment waiting for you the following January the way there is with new construction.

If you're weighing a resale home against a new build anywhere in the Katy or Fulshear corridor, the honest comparison takes about twenty minutes with the actual numbers in front of you, not the ones on the sign. SKW Realty works this math with buyers and move-up sellers across Katy every week, and if you're selling your current home to make the move, we'll start with a free home valuation so you know what you're working with before you compare a single rate sheet.