Existing housing has become a Debbie downer for buyers in the market. The market for existing homes is still on the short end with higher home costs than in recent years. This coupled with the spiking interest rates has detoured buyers. In fact, the industry reports that homes haven’t been this unaffordable since 1984.
According to reports, the US mortgage rates have slowed a little, stopping the five-week straight of gains. There is no relief in the 30-year fixed-rate mortgage as it remains high around 7.18%. This time last year the 30-year fixed rate was only 5.66%.
Those buyers in the market are going for the new construction, making home builder stocks more desirable. The market is frustrated with the huge buyer competition and so few existing home listings which has caused massive bidding wars. This has been avoided with buyers focusing now on new construction. Home builder stocks are jumping, Pultegroup has jumped 80%, Toll Brothers 64% DR Horton up 34% and Lennar up 32%.