The housing market is experiencing increasing challenges as inventory levels rise to an annual rate of 507,000 homes for sale, reflecting an 8.1% increase compared to last year. Sales have sharply declined—particularly in the South—leading to a current supply of 9.8 months. High mortgage rates are creating affordability issues for buyers and raising financing costs for builders already facing elevated construction costs. Recent reports indicate construction permits are at five-year lows, and builder confidence has also diminished, compounding the difficulties in the sector.
Elevated mortgage rates impact buyer affordability and result in higher financing costs for builders, who are already grappling with higher construction input costs.
Sales plummeted to a seasonally adjusted annual rate of 349,000 in the South, marking a 21% drop from April and signaling a serious decline in market activity.
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