Buying a home in today’s real estate market is not for the faint at heart. Guess what, neither is building one! Buying and/or building a home is hard right now for both homebuyers and home builders. Everyone has their own perspective and hurdles to get through. Here is a little round-up of some hot topic items I’m sure you are already hearing about; rising home prices, supply chain, and higher interest rates.

• Let’s start with rising home prices. Our world is new homes, so we will focus on that part of the real estate market. It really boils down to two things…. cost of material and availability (aka supply chain…more about that in a minute). Builders are paying more for material and labor and therefore the cost is manifesting itself in the sales price. Every cost that goes into putting a home on the market for sale has increased. Things you might not think about… wages, regulatory fees, development services, lending cost, and the price of raw land. Then you get to lumber, plumbing fixtures, siding, flooring, concrete, etc… Some estimates we’ve read have said building material costs are up an average of 35% since this time last year. Every sector of the housing market, from renters and first-time homebuyers to move up and luxury homebuyers are paying more for a home.
• Next up is the buzzword of the hour – supply chain. Is anyone else tired of that term? Material availability and when the materials are on hand is a daily job to manage. The Ivey Homes team is working very hard to plan and adjust quickly to help still get homes built and closed. This requires a big-picture outlook and a lot of patience because guess what, most experts say we will be dealing with the global supply chains issues well into 2022. Hang on!
• Now the new member of the trifecta, higher interest rates. Industry experts have been saying for a while now that rates will begin to increase and over the last year they have increased from 2.7% to 3.7% in a year. Most experts say we will be at or over 4% by July this year. What is a new homebuyer to do? Our advice is to buy sooner than later. As interest rates increase your buying power will lessen potentially forcing you into a home type you initially weren’t looking for. Here is an easy example: If you could afford the monthly payment of a $355,000 home at a 3.0% interest rate, the equivalent payment at 4.0% is for a $308,000 home. There are also rate lock programs available from lenders. This can give you a little peace of mind as you wait for a new home to be completed.

It is not all doom & gloom. Experts also say that for all the woes we are facing, the other market indicators are strong. New and daily challenges are the norm, but as a company, Ivey Homes is committed to still bringing a better-built home to the market for our customers. Our team is ready to help navigate and guide you through the process of buying or building new. If you have questions or are ready to get started, please Contact Us! Ivey Homes has a dedicated online and in-person team available. Browse Ivey’s communities and homes – here