New home cancellations saw a sharp increase in the second quarter

by Calculated risk on 05/08/2022 02:06:00 PM

Today, in the Risk Calculated Real Estate Newsletter: New home cancellations increased sharply in the second quarter

Brief excerpt:

First, some quotes from some of the Q2 SEC filings:

“We believe that recent interest rate increases through 2022 have caused buyer concerns, affordability concerns, and an increase in cancellations.” , Taylor Morrison Q2 SEC Filing

“The scale and speed of these recent price increases has led many buyers to pause and reconsider purchasing a home, resulting in lower aggregate demand and an increase in 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 saw a higher-than-normal cancellation rate during the second quarter of 2022,” LGI Homes Q2 SEC file
Confirmations added

Below is a table of the selected public construction works and the currently reported cancellation rate (I’m still collecting data). There are some seasonality to cancellation rates.

Disclaimer: Cancellation rates are from SEC filings only, and although considered reliable, they are not guaranteed.

Cancellation rates increased significantly in the second quarter.

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