The builders have used their profit margins to help buy down rates to keep sales elevated, because without sub-6% mortgage rates, new home sales would be worse today. A huge part of the profit margin story for the builders was the massive price gains they locked in during COVID. They have used those margins to buy down rates, but those profit margins are falling. History has shown us that over the decades, when this data gets over 120,000, the builders really pull back from construction. Higher rates mean they will need to use more of their profit margins to move product and they’ll be even less enthusiastic to build more homes.