Homebuilders say they’re on the edge of a steeper downturn as buyers pull back
- From CNBC:
- Homebuilders say 2023 is going to bring an even sharper downturn in the market, as high interest rates scare away buyers.
- Housing starts for single-family homes dropped nearly 19% year over year in September, according to the U.S. Census. Building permits, which are an indicator of future construction, fell 17%.
- “It is definitely a hard landing for housing,” said one homebuilder in the Denver area.
The once-hot housing market is cooling off at an alarming rate, and some homebuilders say it will only get worse come the new year as new orders dry up.
Fast-rising mortgage rates have caused once-frenzied homebuyers to turn on their heels and become worried about their potential investment and the health of the overall economy.
“There’s this cliff that’s happening in January,” said Gene Myers, Chairman of Thrive Home Builders in the Denver area, which was one of the hottest markets in the years leading up to and through the coronavirus pandemic.
U.S. homebuilders were a major beneficiary of the Covid economy. Record low interest rates, combined with surging demand from consumers looking for more living space, caused a run on housing unlike most had ever seen before. Home prices surged over 40% in just two years, and homebuilders couldn’t meet the orders fast enough. They even slowed sales just to keep pace. All of that is over.
Read the rest at CNBC HERE.