Despite average mortgage rates remaining above 6%, new home buyers are receiving lower rates, UBS homebuilders and building products analyst John Lovallo revealed.
According to Lovallo, recent buyers who are purchasing newly built homes are paying mortgage rates of 5% or less – below the headline rate of 6.5%. Lovallo added that these lower rates have placed homebuilders in a strong position, particularly as new home buyers now have a higher financial capacity to spend on home construction.
“By offering lower rates, we are helping to make our homes more affordable for today’s consumers.” Macey Kessler, Pulte Group’s corporate communications manager declared. “Given the extremely low inventory of existing homes, providing an opportunity for consumers to purchase a new home is more important than ever.”
The National Association of Home Builders estimated that over a third of homes on the market in April were newly built; well above the typical figure of 13%.