While the headlines obsess over mortgage rates bouncing between 6–7%, a quieter—and arguably much more important—shift is happening behind the scenes: capital is drying up, and what’s left costs a fortune.
Capital is drying up, and what’s left costs a fortune.
Here’s the bigger picture: When markets turn, getting capital becomes brutally harder. Builders and developers—the ones fueling the new construction pipeline—suddenly find themselves scrambling. It’s not just about higher rates eating into margins anymore. It’s about whether they can even get financing at all.
Whether they can even get financing at all.
Here’s why:
👉 Builder activity is slowing. Tariffs, tighter credit, and surging material costs have squeezed already-thin margins. Many projects are delayed or shelved because builders can’t secure the funding they need—not at reasonable terms, anyway.
👉 More homeowners are staying put. Instead of selling, many are remodeling. Lenders, being the savvy profit-chasers they are, are pivoting toward refinance deals, home equity lines, and renovation loans—away from new construction loans, which are now seen as risky business.
👉 Refinancing debt is a landmine. Builders who took on short-term loans at 3–4% are now facing refinancing offers at 7–9%—if they can even get an offer. The math doesn’t just hurt. In some cases, it completely blows up the project.
👉 The double whammy: scarce and expensive capital. Not only is it harder to get money—but when you do, you pay through the nose for it. Think of it like this: Capital is rare…and the cost of capital is high. It’s like trying to buy a bottle of water in the desert—there’s not much for sale, and what you find costs triple.
The market is shifting—quietly but powerfully. New construction funding is drying up. Builders are pulling back. And the money that’s left for buyers and homeowners? It’s complicated—but full of strategic opportunities.
