Since the beginning of the pandemic, the housing market has changed. A lot. In the spring of 2020, many were concerned that a housing crash was imminent. Later in the year, however, we saw a surge in demand with inventory staying stagnant, resulting in bidding wars and homes being sold for much over asking price.
With interest rates remaining low, it’s no wonder so many people are looking to buy again, or for the first time, or even refinance their existing mortgages.
The great news for those hoping to buy a house in 2022 is that the supply has been steadily increasing, which should help to balance the market.
But what about the people who want to build a custom home?
It’s true that the pandemic caused supply constraints for the homebuilding industry, causing costs to increase, particularly for lumber. The cost to build a home in 2021 was much higher than in the years preceding it.
Although some costs will come down next year as supply gets back to normal, it isn’t likely that building a home is going to become cheaper in 2022 or the years that follow. Construction prices typically increase from 2% to 4% each year, so although the prices may not skyrocket the way they did in 2021, they will still increase at a more normal pace.
So, is 2022 a good time to build a new house?
Although we realize we may be a bit biased on the topic, our answer is undoubtedly YES. Interest rates are still very low, which makes a huge impact on your mortgage and what you are able to afford. Construction costs are what they are, so if building a home is what you are committed to doing, then taking advantage of the current rates is a smart decision.
The sooner you get started on the new home construction process, the sooner you can begin enjoying your forever home.
Interested in talking more about building your new home next year? Reach out to us today and we would be happy to help you get started.