Last year’s 3 percentage point increase in mortgage rates, coupled with home prices that jumped over 40% during the Pandemic Housing Boom, has priced out millions of homebuyers.
That sharp buyer pullback comes at a less than ideal time for U.S. homebuilders. See, a combination of pandemic-related supply chain constraints and a surplus of eager buyers during the boom, saw the total number of units under construction reach historic levels last year. And that historic backlog, along with spiked cancellation rates, means buyers finally have some negotiating power over builders.
