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Conor Sen

Homebuilders Still Find Plenty of Demand in a Cooling Market

While rising mortgage rates have pushed sellers of existing homes to the sidelines, new construction is finding all the buyers it needs.

New homes are still finding buyers.

New homes are still finding buyers.

Photographer: David Paul Morris/Bloomberg

Surging mortgage rates have finally cooled off the housing market. The cooldown, though, is coming unevenly, accentuating differences between the existing home market and new construction.

The supply of existing homes, while still below normal, is surging as sales decline. Homebuilder stocks have slumped. Investors were braced for the worst when two major homebuilders last week reported quarterly earnings — along with their market outlook.