KB Homes contract cancellations hit 68%

KB Homes contract cancellations hit 68%

KB Homes contract cancellations hits 68% Speaking to reporters in September, Fed Chair Jerome Powell was asked to clarify what he meant when he said spiking mortgage rates would cause a housing "reset." Look no further than the latest earnings report by KB Home, one of the nation’s largest publicly traded homebuilders. On Wednesday, KB Home announced that its buyer cancellation rate in the fourth quarter of 2022 spiked to 68%. That’s up from 35% in the third quarter of 2022, and up from 13% in the fourth quarter of 2021. Even during the darkest days of the 2008 era crash, the average builder cancellation rate only reached 47%. What's going on? Pressurized affordability—a 3 percentage point mortgage rate jump following a +40% run-up in U.S. home prices—has sent a shock wave through the U.S. housing market.

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