Here’s what experts predict for new Bryan-College Station Homes.
If you’re considering waiting for a bargain when it comes to buying a new home in Bryan-College Station, the experts say: Don’t.
While most agree home prices won’t increase at the rate we saw in 2020, experts do expect the upward trend to continue. Many expect to see an uptick in mortgage rates this year as well.
Factors contributing to rising home prices
There are several forces at work pushing home prices higher. One of the more commonly mentioned issues is a shortage of lumber and other key building materials. These shortages have sent softwood lumber prices soaring to all-time highs. In fact, the National Association of Homebuilders estimates that rising lumber prices alone are adding more than $24,000 to the price of the average newly built home.
A recent NAHB survey revealed 89% of builders view building materials prices as their No. 1 challenge, and that most expect it to continue throughout 2021. The second and third most often mentioned concerns were availability and delivery times of materials, and availability of labor, respectively. When added to other supply-side limits such as regulatory burdens and lot supplies, housing will grow at a slower rate in 2021 compared to last year.
A recent article on realtor.com predicted home prices in 2021 will increase 5.7% as compared to last year. “We expect affordability to become a bigger challenge. It’s going to make [housing] more expensive,” says realtor.com Chief Economist Danielle Hale. “[But] home prices will rise slower than in 2020, on the upper end of what we consider normal price growth.”
How new home construction is affected
Nationwide, a shortage of supplies for homebuilding has led to construction delays. The number of single-family homes that are permitted but have not started construction is up 28% as compared to a year ago. Strong demand for new homes has pushed the count of new homes offered for sale that have not yet started construction up 45% from a year ago.
Price increases and affordability
NAHB estimates that for every $1,000 increase in the price of an average new home, approximately 154,000 more households would be unable to afford it. Moreover, mortgage interest rates are rising, as economic growth expectations increase. On the bright side, demand remains strong and there is a growing number of households entering their key home buying years.
Mortgage rates on the rise
Realtor.com’s recent forecast anticipates that mortgage rates will begin slowly going up toward the last half of 2021, reaching 3.4% by the end of the year. Mortgage rates are currently at an all-time low of just 2.72% for 30-year fixed-rate loans in the week ending Nov. 25, according to Freddie Mac. While a roughly 70 basis point rise isn’t dramatic, it will make those monthly mortgage payments even pricier, which may price some buyers out of the market.
The time to buy is now!
If you’re looking at new construction homes Bryan-College Station, the experts are in agreement that time is of the essence. Both home prices and mortgage rates are expected to increase. Another factor to consider is the lesson we all learned in 2020: things can change on a dime. Many economists are keeping a close eye on unemployment rates and watching for signs of a possible recession.
In order to lock in the lowest possible price and mortgage interest rate, it may be a good idea to act now to buy your new Bryan-College Station home.
Let RNL help you find the right community
RNL Homes carefully researches factors like location, schools, and future development plans (such as nearby retail and services) when choosing where to build new homes in Bryan-College Station. We’re currently building in six desirable Bryan-College Station communities, and our home prices start in the $300s.
RNL Homes builds in these communities:
- Austin’s Colony, from the $320s.
- Greenbrier, from the $320s.
- Miramont, From the $550s.
- Mission Ranch, from the $390s.
- Oakmont, from the $320s.
- Traditions, from the $450s.
Already own land in the area? Our “Build on Your Lot” program makes the quality and exquisite design of RNL Homes available on your land. Use your pre-designed plan or choose one of our beautifully designed floor plans. The choice is yours!
Schedule a Tour or Ask Us a Question
Feel free to reach out today to schedule a visit, just stop by one of our model homes! Questions or comments? Call us today at 979-977-5775.