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Blog Category - Housing Market

Winter Housing Market Update: It’s Still a Great Time to Buy

Categories: Blog, Housing Market | Posted: January 13, 2022

Real estate markets are constantly changing and responding to larger economic forces, but the last nearly two years have really thrown a curve ball to the industry. Although national home prices had been on a steady incline prior to the pandemic, since summer of 2020 they have increased by over 19%. Although we have seen stabilization in some markets, home prices are expected to continue rising for the foreseeable future. In this article, we’ll explain the reason for this, and why it’s still a great time to buy nonetheless. 


Price Increases Explained

For existing homes, scarcity was, and is, the main factor driving up their cost. For new homes, the challenge has been scarcity plus the rising cost of lumber and other building materials. From 2019 to the all-time peak in May 2021, lumber increased by over 400% for a thousand board feet. Lumber is the number one material used to frame houses, and according to the National Association of Home Builders, that cost added an average of $30,000 to each new home. 


The cost of lumber has plummeted since May, but at $1120 per thousand board feet (as of December 2021), it is rising again. Based on production and demand cycles, the cost of lumber is expected to continue rising at least through next year, along with other building materials like PVC piping, concrete, OSB (a type of wood panel), insulation, copper wire, and structural steel.


The cost of skilled labor also presents a challenge. There were construction labor shortages prior to 2020, and the pandemic only exacerbated them. Home building companies must be willing to pay more for skilled trade partners and craftsmen in order to complete homes. 


What all this means for homebuyers is that, while home prices have stabilized, they have definitely not decreased, and will continue to rise for the foreseeable future. Due to materials and labor shortages, we are also still seeing delays in starting and finishing new homes. But there is good news…


Why Now is Still a Great Time to Buy

Because of the unpredictable nature of the real estate market, the best time to buy is when you are ready. If you are ready to make a move and build your dream home now, and are financially able, there is no question that it is a great time to buy. Interest rates continue to be lower than they were pre-pandemic, which means, even with the added cost of lumber and materials, you can still afford “more house” than you could just two years ago. 


In 2019, the average interest rate for a 30-year fixed rate mortgage was 4.25%. On December 14, 2021, it was 3.25%. Keep in mind, though, that interest rates are rising, which means your buying power will fluctuate, too. For more up-to-date and complete information on interest rates and mortgage options, we encourage you to speak with a lender


In summary, yes — the real estate industry can be unpredictable, but there is no guarantee that tomorrow, next month, or next year will be a better time to buy than today. In fact, the forecasts are showing that the costs of lumber, materials, interest rates, and therefore housing will continue to rise, so the time to buy is as soon as you are ready.  


At H&H Homes, we are thankful for our strong vendor relationships, which have enabled us to continue building homes for our valued customers with little disruption. While we have faced the same challenges as most builders throughout the country, we are proud to continue building expertly-crafted, high quality, new homes in Wilmington, NC with the level of care and customer service that we’ve become known for. 


If you are ready to buy, we are ready to build! Contact us today to learn more about our design process and move into the home of your dreams sooner than you ever expected.

How To Think About Buying a Home During the COVID-19 Pandemic

Categories: Housing Market | Posted: April 28, 2020

How To Think About Buying a Home During the COVID-19 PandemicAs we make adjustments to our day to day lives to protect ourselves and our families from the spread of the coronavirus, those who are on the lookout for a new place to call home might find themselves with extra questions. There is plenty of uncertainty about the logistical process of buying a home as well as how to adjust personal financial ambitions to a shifting market. What is the best way to plan during this period of uncertainty financially? Should I jump on low mortgage rates? Will the housing market remain favorable to buyers in the coming months? Based on how markets have responded to past pandemics, there’s some hope – SARS, H1N1, and other outbreaks in recent history caused short-term strains on the market. Fortunately, research points to a housing market that is stable enough to withstand these uncertain times.

Here’s some more good news: the intricate parts of the home buying process are going virtual. Home inspectors are encouraged to use Facetime or Skype to run their inspections with the buyer dialed in remotely. Lenders are backing off somewhat on in-home appraisals, making it easier to lock in a mortgage without being onsite. Closing on a house via electronic signature, or by mailing a signed document, is becoming standard for buyers.

At H&H Homes, we are ready to put your health first and can accommodate your needs in pursuing a home purchase as we navigate the period of the coronavirus together. Get in touch today to learn more about us.