Surging Mortgage Rates has made buying a Home in in US Real Estate Market much more expensive over the last three months. Particularly so for newly built homes.
As many was 500k people are under contract to buy a new home that is currently under construction. Many will decide to cancel the contracts when the new home is delivered because they can’t afford the mortgage payments, or can’t qualify for the loan to buy the house.
This surge in cancellations could cause a Housing Crash. But likely in certain markets more than others. Real Estate Markets such as Atlanta, Charlotte, Nashville, Tampa, Dallas, and Phoenix have had the biggest surge in single-family home building. And thus face the biggest risk of a surge in cancellations and inventory that could pop their local Housing Bubbles.
At a state level – both the Florida and Texas Housing Markets seem to be at the most risk. Homebuyers in these states might want to exercise caution.
Worse yet – the Federal Reserve and Jerome Powell seem intent on raising interest rates further, which will likely cause Mortgage Rates go up more. The higher the mortgage rate goes, the more cancellations the US Housing Market and Home Builders are likely to experience.
I suspect the “magic number” where buyers begin walking away from their newly built homes before they’re completed is 5.5% 30-Year Mortgage Rate.
JOIN as CHANNEL MEMBER:
CONACT US: https://reventureconsulting.com/contacts/
DISCLAIMER: This video content is intended only for informational, educational, and entertainment purposes. Neither Reventure Consulting or Nicholas Gerli are registered financial advisors. Your use of Reventure Consulting’s YouTube channel and your reliance on any information on the channel is solely at your own risk. Moreover, the use of the Internet (including, but not limited to, YouTube, E-Mail, and Instagram) for communications with Reventure Consulting does not establish a formal business relationship.
Image(s) and/or Footage used under license from Shutterstock.com. https://www.shutterstock.com/
Additional stock footage provided by Videvo. http://www.videvo.net/