Housing Demand Still Strong Despite High Mortgage Rates

Homebuying demand remains strong in the U.S., even as mortgage rates exceed 7%. In the third quarter of 2023, 17% of Americans expressed plans to purchase a home within a year, up from 15% during the previous quarter, according to the National Association of Home Builders' (NAHB) Housing Trends Report. The fluctuation in these figures over the past year can be attributed to the opposing factors of higher interest rates and home prices on one side and persistent buyer demand driven by demographic growth on the other.

Prospective buyers are increasingly turning to newly built homes as existing home inventory dwindles, with 27% of homebuyers seeking new construction in the third quarter of 2023, NAHB's Eye on Housing reports.

Meanwhile, interest for newly built homes continues to rise as the collapse of existing home inventory leaves new homes as the only option in many areas. In the third quarter of 2023, 27% of prospective buyers were looking to buy new construction, up for a third consecutive quarter after falling to 20% in the final quarter of 2022.

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