New Home Orders Plummet 65% As Rising Rates Scare Buyers
A major homebuilding company in Canada is seeing orders drastically decline, in yet another sign that buyers are reluctant to enter the real estate market over fears of rapidly rising mortgage rates.
Homebuilder Mattamy Group Corp reported that net orders fell a staggering 65% year-over-year to 605 homes in the fiscal first quarter ending on August 31. The Canadian-based company, which focuses on single-family and condo construction in major real estate markets such as Toronto, Calgary, and even Texas, also saw its order backlog slump to less than 7,000 units for the first time in two years during the reporting period.
The Bank of Canada’s determined stance on bringing inflation down to the 2% target range has sent interest rates soaring from historic lows, making potential homebuyers hesitant about taking out a mortgage. The dampened demand for home ownership is causing real estate activity to plummet sharply in both Canada and the US; home prices in the latter country slumped 1.3% between August and September— the largest decline in over 13 years, according to S&P CoreLogic Case-Shiller index.
Meanwhile, the Greater Toronto Area— Canada’s largest real estate market— saw home prices fall 44% from September 2021, with a total of only 5,038 homes changing hands during the month.
Information for this briefing was found via Mattamy Group Corp and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
