To most buyers the sales price serves little more than
guide to determine what they will look at. This is because of the multiple variable that determine monthly housing expense, such as mortgage interest rates, taxes
and insurance costs, all generally unknown when shopping.

The purchase decision is nearly always made based on the amount of the initial cash investment and total monthly housing expense. Mortgage interest rates have, by far, the greatest affect on those monthly costs and to a kisser degree, the cash investment required.

Most of those financially astute enough to have gathered the cash to invest in a new home understand that rates are rising and that the FED’S efforts to control runaway inflation will expose most buyers of new homes to the risk of significantly higher rates over the typical 6 to12 months their new home is under construction. If you research what mortgage rates were the last time the inflation rate was over 7% the results will scare you.

The industry has had an excellent year and the backlog of sales is enormous because of sales volume and supply related construction delays. My opinion is that builders should be working on plans to identify potential mortgage problems within their backlog and to deal with them to avoid loosing a significant number of sales from the backlog.