Mortgage Interest Rates may be at the highest levels in more than 3 years, but the housing market has yet to show visible signs of slowing down. April’s release of the Housing Market Index (HMI) is the latest data supporting that thesis.
The HMI number portrays builder confidence, and while it is down slightly from the previous month’s reading, it remains historically high. Both the HMI and the “buyer traffic” index remained higher than at any other time before the covid-driven real estate boom.
Neither of these numbers suggest that housing is immune from high interest rates. The crazy fast pace of home price appreciation combined with one of the sharpest mortgage rate spikes in history causes real concern for the industry and affordability problems for home buyers.
NAHB’s Chief Economist Robert Dietz spoke about this: “The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices and escalating material costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market.”