Low Rates Will Not Last Forever
You may feel like you’ve been hearing that ‘now’ is the time to buy for a long time, but one thing we know is that these low rates will not last forever. In addition to the low rates, we typically see hikes in new construction costs at the beginning of the year and while supply may increase in the spring, so does demand. The best incentive for getting started on the building process now is the $5,000 discount offered on all new builds with Michael Lee, Inc.
Mortgage interest rates have been hovering around 3.5%-3.875% for the last 12-18 months, but rates just tumbled to an all new low for the year at an average of 3.42% for a 30-year fixed rate mortgage, according to the Washington Post. Falling oil prices and low U.S. Treasury yields are thought to be to blame. There is also speculation that rates will remain low for the immediate future. Election years tend to provide more stable interest rates, as we’ve seen throughout the year and it’s unlikely we’ll see rates increasing prior to a new President taking office. That being said, there’s no telling what the markets may do when someone else steps into the Oval Office in January.
Construction supplies and materials may fluctuate in cost throughout the year, but many suppliers reserve their price increase (or potential decrease if we’re lucky) for the 1st of the year. Also, certain builders like Michael Lee, Inc. will absorb that fluctuation throughout the year, but will make those price changes effective January 1st as well. Therefore, with construction prices continuing to be on the rise, a potential homebuyer of a new construction home may need to go into to the first of the year with the expectation that their cost to build the same product will be higher than it is now.
While we do see supply tick up in the spring and summer months, we see demand increase as well. While many agents and buyers are taking a reprieve from the busy months earlier this year that were marked with multiple offers and listings selling for well above asking price, it may just be a temporary relief. We’ve seen this scenario play out for several years now, beginning on the West Coast, and moving its way across the country to the Midwest. While it may be too early to tell now, the current supply level of homes for sale indicates we may be in for another busy spring. According to Lawrence Yun, Chief Economist for the National Association of Realtors, inventory hit a 16-month low at 4.7 months of inventory in July. With these numbers at play, it seems like a safe bet that demand and hence, home prices, will continue to rise throughout 2017.
Sign Now and Save!
Lastly, and perhaps the most important reason to sign on the dotted line to build a new home, is Michael Lee, Inc. is offering a $5,000 discount on all new builds as long as a contract is in place by October 31, 2016. At Easton Village, we have several great lots still available to build on, and would love to get started before the ground freezes. With that timeframe in mind, Michael Lee’s crew can have your brand new home up and ready for move in by spring! It may be starting to sound cliché, but NOW is really the best time to buy a new construction home!