Examining the Sensitivity of Residential Housing to Mortgage Rates

Former JPMorgan Chase Global Chief Economist (Ph.D. in Economics) and Current BQ Chief Economist

Have you ever wondered why the share of new single-family home sales has been rising?  The short answer is the data reveals that the sale of newly constructed homes is less sensitive to changes in U.S. mortgage rates than existing homes.   One reason for this outcome is that the supply of housing units takes on added importance when mortgage rates are h…