The housing market has been keeping its head down, keeping calm, and carrying on in the face of the biggest rate spike since the 1980s. The ability to tune out rising rates is nothing new for home prices, as discussed a few weeks back. The same is often true for home sales, but sales tend to show more of an impact than prices, and sooner. The following chart shows several of the biggest rate spikes of the past decade (and yes, they do look small in comparison to 2022) in conjunction with New Home Sales. One could argue that prices leveled off in 2018 as rates continued to rise, but the only case for immediate impact is on the sales front. Even then, it’s minimal. Whatever it was that accounts for the resilience in the past, it’s clear that something new is happening right now. Moreover, it is happening QUICKLY. Just last month, New Home Sales were still higher than any other time in the 12 years leading up to the pandemic. Now in this week’s new numbers from the Census Bureau, New Home Sales have plummeted to nearly the lowest levels in 5+ years. And Pending Home Sales painted an even bleaker picture 2 days after the New Homes Sales data: There are several ways to approach this. None of them are too complicated or surprising. 1. Prices have surged unsustainably. Whether we’re talking about new or existing homes, prices have surged at the fastest pace on record.