Speaking to reporters in September, Fed Chair Jerome Powell was asked to clarify what he meant when he said spiking mortgage rates would cause a housing “reset.” The meaning, he said, was that the U.S. housing market would slip into a “difficult correction.” …Of course, this so-called “difficult [housing] correction” has already arrived. Look no further than the latest earnings report by KB Home. …On Wednesday, KB Home announced that its buyer cancellation rate in the fourth quarter of 2022 spiked to 68%. That’s up from 35% in the third quarter of 2022, and up from 13% in the fourth quarter of 2021. …Historically speaking, a 68% cancellation rate is off the charts. Even during the darkest days of the 2008 era crash, the average builder cancellation rate only reached 47%. What’s going on? Pressurized affordability. …The problem: builders still have a tremendous amount of inventory—both single-family and multi-family—in the pipeline.