She noted improving homebuilder sentiment on the new-home sales front as cause for optimism, in sharp contrast to an existing-home market that’s unlikely to shift quickly from its current torpor. “The long-term housing shortage, lower mortgage rates, and builders’ ability to offer incentives will help to buoy new single-family sales,” she said.
While the so-called “Five Ls” – labor, lots, legal issues, lumber, and lending – are posing challenges for builders, “the new-home market will likely continue to outperform the existing-home market over the near term,” Kushi said, “because, unlike existing homeowners, builders are not rate-locked-in.”
Sliding mortgage rates in recent weeks have spurred hopes of a housing market revival before the end of the year, with a 50-basis-point reduction last week by the Federal Reserve also suggesting an end to the days of climbing rates.
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