Economy · August 5, 2022

New home cancellations increased significantly in the second quarter

from Active calculated risk 05/08/2022 14:06:00

Today, in the Calculated Risk Real Estate newsletter: New home cancellations increased dramatically in the second quarter

An excerpt from a letter:

First, a few quotes from some SEC documents from the second quarter:

“We believe the recent interest rate hikes over the course of 2022 have caused buyer apprehension, affordability issues and increased cancellations.” Taylor Morrison Q2 SEC Filing

“The magnitude and speed of these recent rate hikes have led many buyers to suspend and reconsider home purchases, resulting in lower gross demand and more 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 had a higher than normal cancellation rate during the second quarter of 2022,” filing by LGI Homes Q2 SEC
emphasis added

Compliant loan limitHere is a table of selected public buildings and the currently reported cancellation rate (still collecting data). There is a certain seasonality in the cancellation rates.

Disclaimer: Cancellation fees are sourced from SEC records only and, while believed to be reliable, are not guaranteed.

Cancellation rates clearly increased in the second quarter.

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