“Between higher interest rates and higher sales prices, along with high gas prices and a volatile stock market, we’re seeing a pullback in our sales,” a Philadelphia based home builder told John Burns Real Estate Consulting in its April homebuilders survey.

Consumers are still spending—for now

Even as mortgage refinancing slowed down in the first quarter, Americans accrued more household debt than any other first quarter since 2006. Overall, households added $266 billion in debt in the first quarter. They now owe $1.7 trillion more than they did before the pandemic, with household debt totaling $15.8 trillion.

As consumers take on more debt, there are also signs they’re having more trouble paying it off.  After collapsing through the pandemic, delinquency rates are inching up on credit cards, mortgages, auto loans, and home equity lines of credit. There was also a small uptick in new foreclosures.

For homebuyers with a big budget, this might make for less competition, but it also means buyers with tighter funds will get priced out.

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