Builders across the country reported a drop in demand for new construction in April, a possible consequence of interest rate hikes creating an unaffordable landscape for prospective buyers. Entry-level buyers are being hit the hardest by economic shock, and because that segment makes up the majority of all homebuyers across the U.S., their absence from home sales is palpable on a national scale. Investor activity is slowing, and as a result, builders are struggling to maintain the high rate of traffic that became the norm for much of the COVID-19 pandemic, the CalculatedRisk Newsletter reports.
#WashingtonDC builder: “Traffic half what it was in March. Worried about first time buyers. Many fewer REAL buyers than number of people collected on interest list last 6 months. Certainly more attempts [from buyers] to negotiate.”
#Seattle builder: “Pause by a large population of buyers. To achieve our desired [sales] pace, we had to make price adjustments. Rates starting to knock people out of qualification.”
Related Stories
Labor + Trade Relations
Construction Employment Increased in 45 States in February
Construction jobs are on the rise nationwide, but understaffed construction firms continue struggling to keep up with project backlogs
Builders
Home Builder Incentives and Price Reductions Are Finally Paying Off
Home building company KB Home reported a drop in cancellations at the start of 2023 after a major slowdown in buyer activity during the final quarter of 2022
Builders
Home Builders Remain Optimistic Despite Market Headwinds
Buyers are retreating as mortgage rates rise, but home builders are looking ahead to strong growth in the new-home market in 2023
