The housing market is cooling, asking prices are dropping, and inventory is on the rise across the U.S., but when it comes to existing home sales versus new construction, sellers and builders are seeing very different market outlooks. A market defined by rising mortgage rates spells more trouble for home sellers than it does for home builders, especially as buyers limit their budgets and lower their offers in a burgeoning affordability crisis.
Many sellers are also unwilling to sell their homes in an unstable market and risk facing even more rate hikes when searching for a new home as buyers. On the contrary, builders remain profit-motivated, and rather than slowing down new construction rates, many of the nation’s top builders are instead finding ways to produce more affordable homes for a more cost-conscious consumer base, The Washington Post reports.
The second big difference is how the labor market impacts homebuilders and homeowners. KB Home noted that its typical buyer has a household income of $125,000, a credit score around 730, and puts $75,000 down when buying a home. Importantly, people still have their jobs and incomes, so that buyer pool still exists.
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