#Lost hiker deja vu psychology plus#
"Prices plus the change in rates had already been pricing out local buyers in many of the U.S.'s most active new home markets – and for a brief period, it was migration away from hyper-expensive coastal markets into these more reasonably-priced active markets that made up for the missing local buyer demand." Math was the initiation point in this move downward in demand," Carl Reichardt, managing director for equity research at BTIG, covering homebuilders and building products enterprises. However, if mathematics were the only impact to who it is will go through with the purchase of new homes they're already slated to buy, and who will step up in the weeks and months ahead as undeterred buyers with the means to go ahead and close, there'd be less to worry about now. A Fed hike – be it three-quarters-of-a-percent, or more, or less – will weigh into that math challenge as mortgage (and builders' borrowing) costs track higher.
Those matters go with the turf of the math challenge. When prices on major consumer goods and services are all spooling upward, it takes a toll – on down payment savings, on monthly payment power, on buying all the other things a household needs if and when they make a move on the new home purchase. One other dimension of the math problem not to forget is this: Inflation's impact on payment power. Other parts of this "it-doesn't-all-add-up" arithmetic issue is the sticky high Average Selling Price levels builders reached this past Spring as they tested price elasticity limits while the feeding frenzy of demand played out right up into and through the first calendar quarter of 2022. these households would no longer qualify as conventional home mortgage borrowers unless they suddenly get a huge raise or come up with a way to pay a much higher down payment. A Funds Rate increase and any pressure that exerts on mortgage rates, of course, erodes the base of would-be buyers on plain and simple technical terms – i.e. The math problem will very likely get tougher by the end of tomorrow – at the conclusion of the Federal Reserve' Federal Open Market Committee meeting. The recent 200-basis point increase in mortgage rates has impacted affordability, but we continue to believe the desire for homeownership is high and the long-term outlook for housing remains positive." PulteGroup ceo and president Ryan Marshall's prepared comment accompanying second-quarter earnings this morning includes a sentence that embeds a mathematics and a psychology problem for homebuilders.
The other half is physical." – Yogi Berraīecause it may be too soon to say it's deja vu all over again.
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