Homebuilders in crosshairs of rising rates

|By:, SA News Editor

What gives? New home contracts fell sharply in July, but those for existing homes barely budged. The WSJ's Nick Timiraos has some ideas:

First, builders have been more aggressive in raising prices.

Second, builders are more reliant on mortgage-dependent buyers, while the resale market has seen a surge in all-cash purchases.

Third, some hustled to close on a purchase before rates rose, but you can't buy a home where construction isn't yet complete. So to the extent higher rates pull forward demand, it's likely to be seen in the resale market, not in new homes.

XHB, ITB, PKB, REZ.