Craftsman Custom Home Builders

  • Craftsman of Smith Mountain Lake
    is now Ellis Custom Homes
    Please visit
    Ph. 540-912-0112

  • Craftsman Homes
    DBA C&J Custom Builders

    22174 Timberlake Rd
    Lynchburg, VA

Spring 2022 Homebuilding Update - Craftsman Home Builders

As we enter the 2022 spring homebuilding season, we enter with significant uncertainty.  While new construction both locally and nationally has reached its highest level since 2006, challenges remain. If you’re looking to start building your home this year, there are several important factors that you should consider in that decision.

Financing and rates

As you may know, most people building a custom home do so with a construction loan that later converts to a mortgage when the home is finished. Before covid there was less building going on in general and both worker and material shortages were limited.  Completing a home in 6-8 months was typical. Today, the time from start to finish averages nationally 16 months. Our building time on average is 10-12 months.  For those looking to build it is critical to understand this, especially at a time when rates are rising. The mortgage rate lock that comes with a construction loan is usually good for just one year. Most banks do offer extensions, but typically charge a fee to do so. Every financial institution is different, so it’s very important to discuss this with your mortgage broker and understand clearly what the costs and process would be if it were necessary to extend your construction loan and maintain your rate lock.

Craftsman has worked with almost every bank in the region and has very strong relationships with many of them. At the start of this process, we can advise you on which banks would be more accommodating if this occurs, as well as what they typically charge.


To say that the housing market is in a wild state, would not be an exaggeration and there is significant uncertainty about what home values might be a year from now. If you’re pursuing financing, the bank is going to approve your building project, including the construction loan and the future mortgage, based in part on the appraised value today of similar homes recently built in your area. But, once your home is completed, the bank will sometimes conduct another appraisal on the finished home prior to issuing the mortgage.  If the prices of the existing homes in your area have dropped during your home’s construction, this can affect your home’s appraisal for the mortgage. It’s very important to speak with your mortgage broker about this scenario and understand clearly the implications of it, if it were to occur.

Materials shortages & a tight labor market

Shortages of building materials, delays with receiving them, as well as the price increases that go with them are still very much an issue. This includes items such as trusses, windows and doors, appliances, and even duct work. The supply chain is still a long way from being restored to what it was prior to the pandemic. It’s very important to discuss this with your builder and understand how they are addressing it, what effect it could have on your project after breaking ground, as well as what the builder’s policy is if the cost of a material rises considerably during construction, especially in the current unpredictable inflationary environment.

There is also a shortage of both qualified tradesmen and entry-level workers affecting nearly every facet of construction. This means that it is taking contractors longer complete projects, which is extending the build times for new homes.

At Craftsman, we work as hard as we possibly can to avoid delays. We have strong relationships with our suppliers and contractors and do all we can to get work completed on time and materials sourced and delivered to reduce any delays in construction

In conclusion

The purpose of this update is not to scare off anyone wishing to build a new home now. It is only to educate and prepare you for the potential challenges that exist. With proper planning these hurdles can be easily overcome and many today who are building their dream home, are doing just that. Choosing the right builder is a critical step, and more important now than ever to select a builder who is not just well-versed in the building part, but also in the business and financing parts. If you’re considering building, please reach out to us with any questions or for a free consultation.

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