The pros answer Google's trending search topic!by Andrew March 19, 2020
Now a Good Time to Buy a Home?
This is a trending search phrase in Google and just one of the hundreds of questions I’m sure you have during this uncertain time. So is it a good time to buy? I know what you are thinking – “Of course you are going to say yes – You are a builder!” True and yes we would love every one to be out (remotely) buying, but that’s not the answer.
1.) Short Term Stabilization in Building Costs: These rarely go down. It is important to note, most building materials used in home construction are at set prices that normally increase 1-2 times per year and freeze when there is a lack of demand in the market. With that said, other commodity-based inputs, such as lumber, historically see pricing fluctuate with demand levels. Lumber costs only make up approximately 10-12% of the total construction costs of a home. We point this out because as we work through pricing new homes in the current environment, the commodity fluctuation in items like lumber only have a nominal affect on the overall house cost. You don’t have to worry that if you buy now that the price will be lower in a week or month from now.
2.) Interest Rates: While the Fed Fund Rates are set near 0%, it is important to note that the national/regional banks are who set the floor on the mortgage interest rates. With all the banks we speak to daily, we’ve garnered the sense that we’ve hit a floor on what interest rate you can obtain for a construction loan that transitions into a 30-yr Fixed Rate at around 3.5%. Like commodity pricing noted above, it stands to reason that if we see demand spike as the pandemic lifts, so will rates.
Thanks for the info Old World, SO WHAT ARE YOU GOING TO DO FOR ME if I am interested in building a home within the next year?
Our design team is all working remotely and would love to talk with you about your Forever Home. Normally, we require a design deposit of $1,500 to have a full 3D custom plan designed. From now until April 6th:
- If you currently own a lot or have a lot you are ready to go in contract on, we will complete our full design package FOR FREE! This includes floor plans, a 3D rendering and itemized pricing for your project!
- Don’t own a lot yet? Don’t worry, we got you! If you have not nailed down an exact lot but are still interested in building in the next year, let’s discuss it! Design consultation meetings are also FREE!
At Old World Classics, we take true inspiration from our clients. Planning your forever home brings such a sense of joy and togetherness, how could it not be a better time than now to bring that level of excitement and inspiration to you and your family!? Let OWC make it a reality!