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Homeowners Don’t Want to Sell, So Home Builders Are Booming

High mortgage rates are dissuading sellers, leaving new construction the only game in town.
A new master-planned community in Lehi, Utah.

A new master-planned community in Lehi, Utah.

LEHI, Utah—After mortgage rates shot up last year, Ivory Homes, one of Utah’s largest builders, suddenly had few buyers for the hundreds of homes it had under construction. So Clark Ivory, the chief executive, laid off 9% of his staff, and by January he had slashed construction by nearly 80% from its 2022 peak.

Then, much to his surprise, sales of new homes started picking up. By May, even though mortgage rates weren’t really budging, sales for all home builders were at their highest level since early 2022. 

Millions of American homeowners have been reluctant to sell because they can’t afford to give up the low mortgage rates they have now. Only 1.08 million existing homes were for sale or under contract at the end of May, the lowest level for that month in National Association of Realtors data going back to 1999. 

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Author: Editors Desk

Source: WSJ:

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