The truth is there is unlikely to be a better time than now, anytime soon. Even the most conservative economists agree that due to continued supply chain disruptions and high-demand for materials, the cost of building a new home is likely to continue to climb. The saving grace today is that mortgage rates for the time being remain historically low.
So what is driving this increase? Are builders really making out? On the surface the high prices may give the appearance that builders must be raking it in. As much as we wish it were true, we are feeling it as much as you the customer, and the pandemic has been an exceedingly challenging time for us. This year we have experienced unexpected double and triple-digit price increases on many of our materials including lumber, heat pumps, garage doors, ductwork, plumbing and electrical, as well as general material shortages.
With all of this crazy inflation and increased cost, why build now? As already mentioned, prices for building materials are likely to continue to rise, with many experts predicting them not returning to prepandemic levels prior to interest rates going up, and that is if prices ever return to what they were before. The Fed has already strongly indicated that rates will start to be ramped up early in 2022. The Mortgage Bankers Association (an industry group) recently predicted that 30-year mortgage rates could climb above 4% next year. If interest rates climb from 3.0% to 4.0%, your payment on a $300,000 home will increase by $167/mo.
In a moment like this, why choose Craftsman? In such an uncertain time, selecting a large, established, reputable builder such as us, can help you hedge much of the financial risk involved. Unlike smaller, more independent builders, we have the financial stability, volume and supplier relationships to weather unexpected price increases and material shortages, completing our homes as agreed, with minimal effects on our customers. And that helps those we build for rest a lot easier!
We also have the design and building experience to help our customers get into a new home as cost-effectively as possible, and can help you with the right choices to stretch your budget as far it can be stretched. We try as hard as we can to get everyone who walks through our doors into a new home within their budget. In today’s reality, it’s not always possible, but our promise to is that we’ll work harder than anyone else to try to make it happen.
Please don’t hesitate to reach out to us anytime with questions or to schedule a free consultation.