March Madness is in full swing and normally so is the Home Buying season too. This normally means new home construction begins to heat up too. A lot of factors may impact new home sales and construction this year and there is a lot of uncertainty. Just like that 16th Seed that has to go up against a dominant No. 1 Seed, what is your Game Plan?
Here is a Scouting Report (Keeping up the March Madness Theme)
No end to Higher Costs: According to Builder Magazine, an industry trade publication, building materials increased in February 0.4% and prices have increased 2.9% in the last 12 months. Lumber prices are down, but other building products have risen. Sorry to say but, experts do not believe costs will go down.
The good news, many builders are offering incentives to buy now, whether a new build and you save on Options or a Ready to Move-in Home and they are offering discounts to buy now. In addition, there are some exciting programs to aid in your purchase. The City of Columbus is offering a Grant program called the American Dream Down Payment Initiative and Chase Bank just announced a pilot program for Ohio that offers a grant that never has to be paid back.
Land Costs will keep rising: According to Michael Smith, Licking County Auditor “farmland prices increased from $20,000 per acre in 2021 to nearly $45,000 per acre in 2022”. The “INTEL” effect will reach beyond Licking County and for the foreseeable future land costs will increase throughout the region.
Interest Rates are the unknown factor: A recent Forbes report quotes several sources including The National Association of Realtors and the Mortgage Bankers Association. Their predictions range 5.2% to 6% by the end 2023
Let’s talk Chalk: At current interest rates, (7-1/8%), a 30-year loan of $300,000 will result in payment of approximately $2,020 per month. If the best forecast for rates is correct your payment would be approximately $1,647 for that same loan the end of 2023. That is a nice savings, but how much will costs increase in that same time? Remember you can always refinance when rates go lower, but costs seldom, if ever, go lower in the future.
Get in the Game
How do these factors affect your search for a new home? Let’s develop a game plan for getting you in the game. Learn More Visit our website https://cbusnewhomescrc.com #homesearch #interestrates #homecosts #lumberpricing #newhome #buildnow