How do high interest rates help home builders?

How do high interest rates help home builders?
Usually high interest rates are bad for home builders, but for now, it is working to their advantage. If you have been house shopping recently, you might have noticed that the supply is low. The reason for that is because no one wants to give up their historically low mortgage rate on their current house to purchase another house and get a new mortgage at a higher rate. The average rate for a 30 year fixed mortgage is now 6.7%. Compare that to some homeowners with mortgages below 3%. There are about half as many homes on the market now than there was in 2019. This shortage means that it is easier for home builders to sell what they build.
Home builders make new supply of homes. There are still people in the market to purchase homes like cash buyers who are usually older Americans that have paid off their mortgages. In May, there was a large month over month jump in the number of homes started.
We will see how long market conditions favor home builders, but for now, they should do well.
Works Cited:
https://www.wsj.com/articles/home-builders-learn-to-love-high-rates-c4e2adb7?mod=hp_lead_pos3
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