The article discusses the current state of the housing market, highlighting a notable rise in existing home inventory despite ongoing affordability challenges. Key insights from industry experts indicate that mortgage rates above 6.65% have not deterred purchase applications and pending sales. However, homebuilders face rising costs and dwindling profit margins, affecting their operations and future construction. Consumer confidence is becoming a significant risk, as the demand for affordable homes persists in a market grappling with a true supply shortage of such properties.
Ivy Zelman noted that affordability remains stretched, but a surprising development has been the steady rise in existing home inventory, significantly in states like Florida and Texas.
Logan Mohtashami added that despite mortgage rates above 6.65%, purchase applications and pending home sales show unexpected strength, contrary to previous expectations regarding high rates.
Dale Wettlaufer highlighted that rising land and development costs are now reflecting on builders' balance sheets, impacting their ability to manage expenses.
Zelman bluntly stated that we have a shortage of affordable homes, not a shortage of homes, indicating a critical market imbalance.
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