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Friday, August 05, 2022

New Home Cancellations increased Sharply in Q2

by Calculated Risk on 8/05/2022 02:06:00 PM

Today, in the Calculated Risk Real Estate Newsletter: New Home Cancellations increased Sharply in Q2

A brief excerpt:

First, a few quotes from some Q2 SEC filings:
"We believe the recent increases in interest rates during 2022 have caused buyer apprehension, affordability concerns, and an increase in cancellations.", Taylor Morrison Q2 SEC Filing

"The magnitude and speed of these recent rate increases has caused many buyers to pause and reconsider a home purchase, resulting in lower gross demand and higher cancellations during the second quarter.”, MDC Holdings Q2 SEC Filing

"New orders weakened during the second quarter of 2022 in many of our markets and we experienced a higher than normal cancellation rate during the second quarter of 2022", LGI Homes Q2 SEC Filing
emphasis added
Conforming Loan LimitHere is a table of selected public builders and the currently reported cancellation rate (I’m still gathering data). There is some seasonality to cancellation rates.

Disclaimer: the cancellation rates are from SEC filings only, and while deemed to be reliable is not guaranteed.

Cancellation rates clearly increased in Q2.
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