The housing market is still reeling from mortgage rates that are hovering around 7%, following a short-lived era of historically low rates. And while every sector within the housing market is vulnerable to those spiked interest rates, there is one segment that’s outperforming the rest: the new-construction home market.
That's happening for two reasons, says Devyn Bachman, senior vice president of research and operations at John Burns Research and Consulting. First, amid last year's mortgage rate shock, builders rolled out aggressive incentives, including mortgage rate buy-downs. Second, spiked mortgage rates have created a lock-in effect, which has seen existing inventory decline as homeowners refuse to give up their lower mortgage rates.
