Homebuilders are the unlikely benefactors of the rising rates that tanked housing demand.
2023: Double interest rates + inflated home prices caused demand for residential real estate to drop significantly, killing the mortgage and brokerage industries. The vast majority of economists thought this demand drop would cause prices to fall precipitously too, but prices actually rose by 3-4%.
Also 2023: Supply dropped even more than demand, which is why prices stayed so robust. Housing supply can come from three sources: existing owners, new construction, or delinquencies. New construction has effectively provided the only new supply for almost two years, so this explains the seeming paradox that it’s been a boom time for homebuilders despite the demand drought.
