Inventory
info icon
Single family homes on the market. Updated weekly.Powered by Altos Research
722,032+456
30-yr Fixed Rate30-yr Fixed
info icon
30-Yr. Fixed Conforming. Updated hourly during market hours.
7.00%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

Lower mortgage rates attracting more homebuyers 

An often misguided premise I see on social media is that lower mortgage rates are doing nothing for housing demand. That’s ok — very few people are looking at the data without an agenda. However, the point of this tracker is to show you evidence that lower rates have already changed housing data. So, let’s […]

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

Log In

Forgot Password?

Don't have an account? Please