Long lead times to complete new homes have combined with rapidly rising interest rates, now at 15-year highs, to put metro Denver homebuilders and their customers in a predicament unlike any seen since the housing bust.
Ricarda Dietsch, Area President for Taylor Morrison homes inside the model home, Vail at Macanta Sept. 22, 2022, in Castle Rock.
Given the rise in mortgage rates the past month, from 6% to 6.8%, someone buying a median-priced home in metro Denver at $624,226 with 20% down can expect to pay $271 more a month, said Alex Lacter, a spokesman with Zillow. A monthly payment that was just below $3,000 a month is now solidly above that.
Davis describes what the new home market has suffered as a “sucker punch,” one that has builders and consumers alike stunned and trying to catch their breath and figure out what to do next. The window is long for things to go wrong, and they have gone wrong. The market went from one where buyers, frustrated by bidding wars and a low supply of existing homes, clamored to get new homes to one where more are essentially priced out of homes they agreed to buy and fearful of a downturn.
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