As the housing market cools down, homebuilders are concerned that the downturn might be too steep for them to handle.
The COVID-19 economy was a good time for homebuilders as low interest rates and higher demand saw home prices spike by more than 40 percent in two years. But now that mortgage rates are elevated, buyers are stepping away, and the housing market is getting affected. For the week ended Oct. 26, the average interest rate for a 30-year fixed-rate mortgage was 7.08 percent, according to data from mortgage lender Freddie Mac. This is up from 3.17 percent roughly a year ago.
During an interview with CNBC, Gene Myers, CEO of Thrive Homebuilders in the Denver area, predicts the market will be “ugly” starting in 2023. His company’s balance sheet is strong at present owing to properties sold when prices were high….