New Home Building Stalls 5/1/26

Summary

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Your Money Minute – “New Home Building Stalls 5/1/26”

Host: Jessica Ettinger, CNBC
Guest Expert: Logan Motashami, Housing Wire
Release Date: May 1, 2026
Duration: ~1 minute

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Episode Overview

This rapid-fire episode spotlights the sluggish state of the U.S. homebuilding market at the start of the 2026 home buying season. Jessica Ettinger outlines key headlines: homebuilders struggling with excess inventory, the Trump administration’s efforts to stimulate building, and the ongoing challenge of high mortgage interest rates. Housing Wire’s Logan Motashami joins to explain the primary market imbalances and offers tips for prospective homebuyers navigating the changed landscape.

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Key Discussion Points & Insights

1. Home Building & Sales Slowdown

• High Inventory, Low Demand:
  • Builders are grappling with too many completed, unsold homes, which restricts new construction activity.
  • Quote (Motashami): “The builders are just dealing with too much completed units of supplies to get anything going with housing starts or permits in 2026—that might be a 2027 story.” [00:18]
• Policy Push:
  • The Trump administration is vocal about the need for increased housing, seeking to ease building, but the problem isn’t supply—it’s selling existing stock.

2. Homebuyer Strategy: New Construction vs. Existing Homes

• Lower Mortgage Rates on New Builds:
  • Prospective buyers deterred by 6%+ mortgage rates should consider new builds. Builders are offering incentives to buy down rates below 6%.
  • Quote (Motashami): “They’re in a sub 6% mortgage market rule as the builders are paying down for rates. The existing home sales market just doesn’t have that kind of mortgage marketplace.” [00:41]
• Existing Home Market Lagging:
  • Many would-be buyers are waiting for rates to fall back to 6% before entering the market for existing homes.

3. Rate Volatility & Geopolitical Impacts

• Recent Rate Spike:
  • Mortgage rates briefly dipped below 6% before geopolitical tensions (the US missile strike in Iran) caused rates to jump to 6.64%.
  • Quote (Motashami): “As long as you just get rates near 6% with less volatility. We had that before the uranium conflict started. Rates that shot up from 5.99% up to 6.64%.” [01:04]
• Path Forward:
  • Stabilizing rates near 6% could lead to some improvement in existing home sales in 2026.
  • Quote (Motashami): “Rates could just get back down to near 6% with less volatility. We could probably get some growth in the existing home sales market this year.” [01:13]

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Notable Quotes & Memorable Moments

• On Builder Challenges:

  • “The builders are just dealing with too much completed units of supplies to get anything going with housing starts or permits in 2026—that might be a 2027 story.”
    — Logan Motashami [00:18]

• On Mortgage Strategy:

  • “They’re in a sub 6% mortgage market rule as the builders are paying down for rates. The existing home sales market just doesn’t have that kind of mortgage marketplace.”
    — Logan Motashami [00:41]

• On Rate Volatility:

  • “Rates that shot up from 5.99% up to 6.64%. Rates could just get back down to near 6% with less volatility. We could probably get some growth in the existing home sales market this year.”
    — Logan Motashami [01:04, 01:13]

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Quick Takeaways

• Builders are stuck with too many unsold homes, which is halting new construction.
• If you want a mortgage rate under 6%, focus on new construction—builders are subsidizing rates.
• Existing home sales are slow because buyers are waiting for interest rates to drop.
• Rates spiked due to recent geopolitical events; stability and a return to near 6% could revive the market.

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For more details on the spring home buying market, visit cnbc.com.

Transcript

[A]

With a CNBC YOUR Money minute. I'm Jessica Ettinger. A sluggish start to the 2026 home buying season. And as the Trump administration screams that America needs more housing and it takes steps to make it easier to build homes, the home builders are struggling to sell what's already built.

[B]

The builders are just dealing with too much completed units of supplies to get anything going with housing starts or permits in 2026 that might be a 2027 story.

[A]

Housing Wire's Logan Motashami also tells CNBC that if you're looking to buy a home and you don't want a mortgage with a 6% interest rate, go for new construction because builders can get you a lower rate loan.

[B]

They're in a sub 6% mortgage market rule as the builders are paying down for rates. The existing home sales market just doesn't have that kind of mortgage marketplace

[A]

and Motashami says would be Homebuyers eyeing existing homes seem to be waiting for home loan rates to get back at least down to six. They were under 6%, according to Mortgage News Daily the day before the US sent missiles into Iran.

[B]

As long as you just get rates near 6% with less volatility. We had that before the uranium conflict started. Rates that shot up from 5.99% up to 6.64%. Rates could just get back down to near 6% with less volatility. We could probably get some growth in the existing home sales market this year.

[A]

More on the spring home buying market. @cnbc.com I'm Jessica Ettinger. CNBC

[C]

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