Builders across the country reported a drop in demand for new construction in April, a possible consequence of interest rate hikes creating an unaffordable landscape for prospective buyers. Entry-level buyers are being hit the hardest by economic shock, and because that segment makes up the majority of all homebuyers across the U.S., their absence from home sales is palpable on a national scale. Investor activity is slowing, and as a result, builders are struggling to maintain the high rate of traffic that became the norm for much of the COVID-19 pandemic, the CalculatedRisk Newsletter reports.
#WashingtonDC builder: “Traffic half what it was in March. Worried about first time buyers. Many fewer REAL buyers than number of people collected on interest list last 6 months. Certainly more attempts [from buyers] to negotiate.”
#Seattle builder: “Pause by a large population of buyers. To achieve our desired [sales] pace, we had to make price adjustments. Rates starting to knock people out of qualification.”