RISING HOME CONSTRUCTION COST
Do you fully understand how to finance your dream home?
For many, this is the first time building their own home on a homesite. We would love to advise you through the complexities of navigating financing your new home. There are many options and we can figure out the best option for you. With interest rates at an all time low, it may make sense to begin your new chapter sooner than you thought.
Also, as we’re sure you are aware, building cost are on the rise. With over 90 homes currently under construction in Compass Pointe, demand is high and labor is short and with trade policies, we are seeing the construction industry being hit.
Contact us today to learn how to make the most of your money!
TAKE ADVANTAGE OF TODAY’S LOW INTEREST RATES
After five weeks of declining, mortgage rates are at their lowest levels in 16 months. For potential homebuyers, this may mean increased savings. Those who buy at historical low mortgage rates can potentially save thousands of dollars on their home loan.
The graph below shows the monthly payment and annual average savings for a $400,000 build according to various mortgage rates.
ABOVE YOU CAN SEE THE ANNUAL AVERAGE SAVINGS WITH A $400,000 BUILD
Mortgage rate volatility is something to be mindful of when considering purchasing a new home. Rates peaked November of last year at 4.94% but now for the first time since January 2018, the 30-year fixed rate has moved below 4%. According to the latest data by Freddie Mac, the rate average tumbled to 3.82% just last week on June 6th from 4.06% the week before.
Unsure of how long the historically low rate will last, an estimated $3,348 on a $400,000 build can be saved each year by locking in on mortgage rates now versus waiting for later on this year and potentially paying more for the same home.
BUYERS CAN STILL TAKE ADVANTAGE OF LOW RATES
Rising construction costs should also be considered by those looking to make a new home purchase. With a national annual average increase of 6%, many factors are playing a part but the top influences we see right now are:
- Increased regulations and taxes on the residential construction industry. According to a National Association of Home Builders (NAHB) analysis, regulatory requirements alone account for 25% of the price of a single-family home.
- Chronic labor shortage in the housing industry
- Trade policy and tariffs on imports of softwood lumber, steel, aluminum and a wide variety of other materials
The cost of construction today coupled with historically low interest rates has the potential to save more than you may anticipate.
Although your timeline may be far out, Hagood Homes is proud to offer our delayed build program to lock in today’s prices.
Call us today and let’s talk about your potential savings!