Why America is missing a million home sales a year

• Mortgage rates above 7% are keeping existing home sales at very low levels, marking the fourth calendar year of extreme lows.
• New home sales, however, are at an 8-month high, as builders leverage corporate profits to buy down mortgage rates for buyers.
• The housing market is currently stuck in a channel, with rates between 6.5% and 7.5% being the 'new normal' unless there's a recession or a shift in Federal Reserve policy.
• Housing affordability is slowly improving as wages outpace home price growth, but lower rates (near 6%) are needed to significantly boost sales.
• Homebuilder stocks are performing better when the 10-year yield goes lower, but corporate profit margins could be squeezed if rates continue to rise.

The discussion centers on the impact of mortgage rates climbing above 7% on the housing market. While existing home sales are at extreme lows, new home sales are holding steady due to builders' ability to buy down rates. The market remains constrained by high rates, influenced by inflation, a stable labor market, and geopolitical events, creating a challenging environment for homebuyers.