In a world of higher interest rates and rising inflation, most of us are feeling the sting—especially when it comes to real estate. The recent inventory shortage, both for existing and newly built homes, has made the housing market feel more like a jungle with competing offers and a slew of buyers fighting for the same property.
Even though the market has rebounded a bit since the beginning of 2023, you may be wondering what your best course of action is. If you need a new home now, are you better off building new or buying an existing property?
Benefits of building a new home
Typically, building a new home is a more expensive option. However, with the current state of the real estate market, it may just be the best way to get those house keys in your hands. Here are some of the benefits:
- No bidding wars with other buyers
- Builder incentives
- Lower upkeep and fewer repair costs
- Fewer safety concerns
- Customization options
If you choose to build new, be sure to create a sound financial plan for the project—it will help you stay on track and on budget.
Can you afford to buy a home?
With so many different factors affecting the prices of both new and existing homes, the resounding problem for most homebuyers comes down to affordability. There are three factors to consider when budgeting for a home—mortgage rates, home prices and wages. As you review these factors, keep in mind that, thanks to rising inflation and interest rates, more changes in these categories may be coming.
- Mortgage rates—This year, many experts see mortgage rates beginning to level out, and maybe even decline.
- Home prices—According to Lawrence Yun, chief economist at the National Association of Realtors (NAR), home prices are likely to stay about the same in the near future. Some areas may see a slight increase or decrease in prices but, for the most part, they are likely to stay mostly stagnant.
- Wages—Earnings have been steadily rising over the years, causing many buyers to renew their quest in the housing market—even with prices and interest rates going up.
If you’re ready to jump in full-steam-ahead to build a new home, Mountain America has construction loans for all kinds of projects. You could be closer to opening the front door of your new home than you think!
Editor’s note: The claims, facts, and information in this sponsored article have not been verified by LDS Living, and LDS Living does not endorse any claim or product herein.