Is now a good time to buy a new home?
April 19, 2021
Throughout 2020 the popular advice for homeowners was to buy, buy, buy. Interest rates were on their side, making new homes more affordable than ever. Homebuilders were also flush with inventory, meaning you could move quickly once you found the right fit. The landscape is a little different this spring, but there is still high demand for new homes across the country.
Is now a good time to build a new home in Washtenaw, Livingston, and Jackson County? Norfolk Homes will explore a few of the pros and cons below.
Interest rates are low
Mortgage rates are driven by movements in worldwide financial markets. As the world returns to a sense of normalcy after the global pandemic, rates are predicted to start creeping up. According to FreddieMac, rates bottomed out at 2.68 percent last December-which was more than a point below the year before and almost two points lower than December 2019. This is important because the lower the interest rate, the more buying power you have as you're saving money over the life of your loan. The average returned to 3.08 percent this March, meaning it’s trending upward again, but there is still time to capitalize on low interest.
Norfolk Homes works with our preferred lender, Independent Bank, to provide resources that help homeowners find the best rates possible for their situation. To check in on the current interest rates, and even calculate your estimated mortgage payments based on a few different factors, check out the financing page on our website.
Rates are still nearing record-low numbers, meaning that it’s still a great time to buy a home. People looking to buy homes can take the gamble and wait for sales prices to potentially go down, but in turn, rates will go up. We encourage you to work with a lending professional, get pre-qualified and make a move before the rates do.
Construction prices will increase
The downside of a hot market is that builders are starting to face supply and manpower shortage. Lumber prices are skyrocketing too, which makes it more expensive to build each home and can delay production timelines. According to the National Association of Home Builders, prices are up more than 180 percent since April of 2020, causing the average price of new single-family homes to increase more than $24,000.
Timelines are set for late 2021 and early 2022
If you’re hoping to move into a new home early next year, now is the time to start planning because builders are busier than ever. Start looking over active communities and available floor plans to see what might work for your family. Then, go ahead and set up an appointment to start reviewing these options with us. We will be able to give you more specifics and set a realistic timeline for your new build project. This will largely depend on how long it takes for permitting and design selections, but may be affected by weather and other outside factors as well.
Now is still a good time to buy a new construction home. Experts expect housing costs to continue rising as the industry faces shortages and new challenges to the construction process. If you are ready to start your new home journey, review Norfolk Homes’ new construction communities in the greater Ann Arbor area and contact us today via our online form.