When it comes to home buying, you may have heard the saying, “Marry the house, date the rate.” This still holds true more than ever, as we look ahead into 2023 and 2024 housing market. The market is showing signs of stability and strength once again. With increasing product availability and a decrease in price increases, now is an ideal time to build your forever home. After a volatile few years, we’re seeing prices stabilizing and the supply chain becoming reliable again – making homebuilding easier for those who are ready for their dream house! Whether you’re seeking your first foot into homeownership or looking to upgrade from your current residence, now is an excellent opportunity to make that piece of real estate yours. We’ll take a closer look at why these next two years should be considered when making such an important decision.
Construction costs are easing, allowing for greater leeway in budgeting and design options. This development is improving financial flexibility of those working on construction projects across the country.
One of the latest “Eye On Housing” Reports by the NAHB, shows that construction costs have leveled off to a 3.3% year over year increase, providing relief from the pre-pandemic annual average of under 2%. Further stabilization has been enabled by drastic reductions in dramatic cost increases prior to this time – which had risen close 20% annually – due largely to increased Federal interest rates.. Going forward into 2023, industry forecasts predict labor and material expenses increasing at predictable levels between 2%-4%. As an experienced professionals in the construction industry, the news of easing construction costs is a welcome development for those of us working on projects across the country. The ability to have greater leeway in budgeting and design options is a game-changer for financial flexibility. With costs coming down, there is room to explore new, innovative ideas that can enhance the final product.
Building industry supply networks have made tremendous advancements, providing builders with greater efficiency and improved outputs.
The latest advancements in supply networks have been nothing short of incredible. The increased efficiency and improved outputs provided by these networks have made our jobs as builders much easier and streamlined. After two years of interminable wait times for crucial appliances and garage doors, the supply chain is finally beginning to show signs of improvement. According to a survey from building materials dealers, an overwhelming majority – 64% – report that their system operations are improving; not one respondent says it has worsened! It’s a promising movement towards normalcy in these difficult days. With the ability to quickly and easily source materials and products, we can now focus more of our time and energy on the actual building process itself. The building industry is constantly evolving, but these developments in supply networks have truly been a game-changer.
Refinancing will become more available, allowing you to benefit from more competitive rates and save in the long-term.
If you’re someone who’s been considering refinancing your house, then you’re in luck. The current economy has created a situation where refinancing is becoming more and more available. With more options and more competition, you’ll be able to find rates that suit your unique financial situation. As the mortgage market continues to adjust with rising rates, lenders are expecting a decline in interest rates in the coming years. Many homeowners tend to refinance or sell their homes before repayment of their loans is due; this behavior has enabled banks and other financial institutions to capitalize on wide spreads between fed funds rate and mortgages they offer customers. Presently, these spread margins are substantially higher than normal – an indicator that suggests lenders anticipate refinancing when future decreases occur. Refinancing can offer a great opportunity to save money in the long-term, and with these new developments, you’ll be able to create a brighter financial future for yourself and your loved ones.
Resale values will remain strong and reliable in the future
With the record-breaking number of homes being built, combined with 85% of homeowners’ mortgages locked in under 5%, resale values are projected to remain steady. This has created an oversupply and distressed sales situation which may put some downward pressure on house prices, but experts believe there is nothing to worry about for 2022 and beyond. Despite decreasing demand due to limited need from most people who don’t need a move any time soon, housing supply remains low in Midwest and Mid-Atlantic states – enough so that it will continue sustaining home value without significant decreases.
A historical and long-term outlook reveals a balanced marketplace that is stable and reasonable.
When it comes to the marketplace, it’s easy to get caught up in the day-to-day fluctuations of interest rates and prices. However, taking a historical and long-term outlook can reveal a much more balanced and stable picture. Despite occasional dips and rises, the overarching trend is one of reasonable and sustainable growth. This is great news for both consumers and businesses alike, as it means a more predictable and reliable economy. Of course, there will always be unforeseen events that shape the market, but by looking at the big picture, we can feel confident in a future that is steady and prosperous.
Overall, the homebuilding market is in a much better position than it has been over the past few years. Construction costs have eased and supply networks have improved, creating a more cost effective experience for those wanting to build. Refinancing and resale options are becoming increasingly viable solutions too. As stability returns (Less Price Increases & More Product Availability) to the housing market, it will greatly improve the homebuilding experience without rapid price increases and supply chain issues. The future of the housing market looks rosy and homeowners should feel confident about their investments – now more than ever – and look forward to quality construction projects at an affordable price for many years to come.
References:
https://www.bankrate.com/mortgages/how-does-refinancing-a-mortgage-work/
https://www.nerdwallet.com/article/mortgages/buying-a-house-whats-changed
Building Materials Prices Decline in September
https://www.aia.org/articles/6584378-construction-forecasters-remain-cautiously
Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years
Creating a legacy for generations, not just a home. Parker Rose Custom Homes.
When you build a custom home, you are not just building a house – you are building a legacy. A well-built custom home can last for generations, and it can be a source of pride for your family for years to come. A custom home is also a great investment. Not only will it appreciate over time, but it will also be easier to resell than a pre-owned home. So if you’re looking for a home that will provide value for your family for years to come, a custom build is the way to go. At Parker Rose Custom Homes, we believe in building quality homes that will last for generations. We take pride in our work, and we are committed to delivering homes that exceed our client’s expectations. If you’re interested in building a custom home with us, please contact us today. We would be happy to discuss your options with you.
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