Marketplace · Wednesday, September 23, 2026
High interest rates have eroded consumer purchasing power by approximately 10% this year, leading homebuilders to reduce new construction. Permit and start numbers are down year-to-date, as builders anticipate mortgage rates remaining above 6% for the next two years.
“Since the start of the year, consumers have lost roughly 10% in purchasing power just from higher interest rates. When demand is like this, and prices aren't rising much, builders aren't interested in building new homes.”
“Their permit numbers are down, the starts numbers are down, year to date. And building a home is kind of a long-term thing. So home builders usually look past short-term bumps in the road like a flare up of mortgage rates. But they are not looking past it because it isn't a short-term thing.”
“In our forecast, we don't have the mortgage rates coming close to six or below six in the next two year window.”