. The number of new home sales is 8.3% higher than it was in March of last year, owing in part to dampened inventory of existing homes.The housing market is in a complicated spot right now. During the worst of the pandemic, the Federal Reserve cut its interest rate target to near-zero and mortgage rates plunged to ultra-low levels. At one point in early 2021, people were locking in 2.5% mortgages — the lowest level in post-war modern history.
Now, with recent hotter-than-expected inflation reports and the prospect of the Fed holding its interest rate target higher for longer, mortgage rates are up again.Mortgage News Daily One of the side effects of that mortgage rate whiplash was that many homeowners who locked in those sub-3% pandemic-era mortgages have been holding off on selling, which has cut down the inventory of existing homes and created more demand for new homes — a phenomenon that caused home prices to keep rising alongside mortgage rates.