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Builder attention shifts from luxury segment to starter homes

Posted by Mehran Aram on Tue, Aug 27, 2019 @ 05:08 AM

It appears that wealthy buyers are holding off for the time being as seen in a growing number of luxury homes that are sitting on the market, another indication that high prices and concerns about a recession are beginning to weigh down the housing market.

Toll Brothers, a luxury home builder, shared last week that orders for new home developments in California have plummeted 36 percent compared to last year.

Low mortgage rates and a cooling off in price gains are prompting would-be entry level buyers to get in the market. This is driving demand for starter-homes, which are more moderately priced, to skyrocket.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.625 percent and 15-year rates are near 3.125 percent.

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Topics: Housing Market, Homebuilders, Luxury Homes, Starter Homes