Inventory
info icon
Single family homes on the market. Updated weekly.Powered by Altos Research
691,171+15,613
30-yr Fixed Rate30-yr Fixed
info icon
30-Yr. Fixed Conforming. Updated hourly during market hours.
6.75%-0.01
Real EstateServicing

Increased foreclosure activity affects homebuilders

Foreclosures depress home prices and creates appraisal difficulties

Foreclosures also remind potential buyers of the risks of investing in real estate, which isn’t a good situation for homebuilders. KB Home actually mentioned on its last conference call that it views consumer confidence as a bigger driver of new home purchase activity than interest rates.

This effect has been apparent in the quarterly earnings reports of homebuilders so far. NVR, which is East Coast–based, reported an increase in sales, but nowhere near West Coast–focused builders, like KB Home (KBH), Lennar (LEN), Meritage (MTH) or Ryland (RYL).

Homebuyers are more likely to be comfortable taking risk when prices are appreciating at double-digit rates or higher. This phenomenon explains why the West Coast has fared so well.

Most Popular Articles

Latest Articles

Freddie Mac’s Donna Spencer on their Servicing Excellence initiative 

On today’s sponsored episode, Editor in Chief Sarah Wheeler talks with Donna Spencer, vice president of servicer relationship and performance management at Freddie Mac, to discuss their new Servicing Excellence initiative and the benefits for their partners. Related to this episode: Related to this episode: Servicing Excellence https://sf.freddiemac.com/articles/insights/servicing-excellence Forging a New Path: The Future of […]

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please