HUD Articles

THE NEWS: Homebuyers may finally be suppressing their appetites for pricy new houses now that mortgage rates are no longer near their historic lows. Builders in recent weeks have reported a significant drop in interest from buyers seeking new homes in a monthly report by John Burns Real Estate Consulting, according to a summary of the report from the firm’s Director of Research Rick Palacios Jr.

The decline in interest from buyers was having broad-based effects on the market for new homes. Builders in May reported declines in sales, pressure to drop prices, and the return of buyer incentives, Palacios wrote on Twitter. “As interest rates rise and pricing continues to escalate, there’s no way we can sustain the type of sales rates we are used to,” a builder in Phoenix told the firm, according to Palacios.

BEHIND THE NEWS: One Boston builder told the firm that a release of four new homes in a recent weekend didn’t immediately sell out from buyers on the waiting list — a first for that company in quite some time. They’re also beginning to see a dropoff in buyers wanting a place on their interest list, the builder said. In Tampa, one builder said the impact is being seen all the way up the sales pipeline as well, with website and phone traffic slowing “dramatically” over the past two months.