11% of builders have dropped their prices, according to Zonda’s data

The recent rise in mortgage rates has priced many potential home buyers out of the market, causing sales to slow. A trend that lends itself to incentives and price cuts from home builders. Ali Wolf, chief economist, reported to NPR’s “Marketplace” host Amy Scott about what rising interest rates mean for homebuilders and prospective buyers.

“I think that the most important thing to keep in mind is that housing has been and always will be an interest-rate sensitive industry,” said Wolf. “So as we’ve seen interest rates go up, borrowing costs go up, we’ve seen consumers react the way you would imagine, which is they’ve been slowing demand and slowing their desire for homes because of how expensive housing has become.”

Listen to Ali on NPR’s Marketplace today.

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