Squeezed Homebuyers Are Just What the Economy Needed
New home sales and construction plans are seeing a big uptick. That should keep a recession at bay this year.
Photographer: Allison Joyce/Bloomberg via Getty Images
The housing market is full of surprises. Sentiment among homebuilders has been perking up, their stocks are surging, and new home sales are at the strongest since early 2022. All in the face of persistently high mortgage rates.
Builders are benefiting from an unusual confluence of factors: Homeowners, locked into historically cheap loans, have been reluctant sellers, squeezing re-sale inventory and pushing buyers toward new constructions. This rapid turnaround of the past six months will extend the surprising strength we’ve been seeing in the economy as renewed building activity starts to flow into the gross domestic product data.