The six-month lagged response to the surge in mortgage rates suggests things may be about to slow down dramatically though:
Las Vegas, Seattle, and San Diego led the monthly gains while Cleveland, Minneapolis, and Detroit saw a slowdown.
Most notably, San Francisco — arguably the hottest real estate in the United States, if not the world — saw the biggest price drop in a year.
Today’s news follows last week’s very bullish new home sales numbers, which saw a 6.1% month-over-month rise. We also learned this month that homebuilder confidence recently surged back to pre-financial-crisis euphoric bubble levels of twelve years ago.
It’s safe to says the U.S. real estate market is firing on all cylinders right now, but with interest rates likely to rise dramatically as the year drags on, things could shift very quickly.
The SPDR S&P Homebuilders ETF (NYSE:XHB) was trading at $36.80 per share on Tuesday morning, up $0.04 (+0.11%). Year-to-date, XHB has gained 8.71%, versus a 4.55% rise in the benchmark S&P 500 index during the same period.
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