The housing market is deteriorating with high mortgage rates remaining around 7%. Mark Zandi of Moody's Analytics warns that without a substantial decrease in these rates, home sales, homebuilding, and prices will decline sharply. Existing home sales have stagnated, and new housing stats show significant drops in sales and starts. Builders are retreating from providing rate buydowns as costs rise, causing expectations of falling new home sales and prices. The Case-Shiller report indicates a monthly decline in home prices, further illustrating the market's downturn.
Home sales, homebuilding, and even house prices are set to slump unless mortgage rates decline materially from their current near 7% soon. That, however, seems unlikely.
Home sales are already uber depressed, but homebuilders providing rate buydowns had been propping sales up. They are giving up. It's simply too expensive.
A big tell is that many builders are delaying their land purchases from the land banks. New home sales, starts, and completions will soon fall.
The latest Case-Shiller home price report showed a 0.3% monthly fall in the 20-city index in April, steeper than March's downward.
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