11 Sep Housing Market Going Back to Normal?

Housing Market Going Back to Normal?

The housing market has been cooling off from a robust pace of the last couple years. In my opinion, the new home market was over heated. For the last approximately year and a half, it has been difficult just shooting rough quotes for new home construction. For example, suppliers such Herrington’s and Williams would typically provide a material take-off with a quote that was “good for five days”. With modular homes, we wouldn’t know the actual price until just weeks before delivery. It’s pretty hard to plan a lengthy construction project under those circumstances. Building material prices and supply issues have taken both builders and homeowners for a wild ride since 2020.

Lumber prices fall to a new low this year, 2022

But lately, some material prices have been coming down. Slowing demand from the fast pace and subsequent high prices of the last couple years is helping to normalize prices. Add to that, the steep tariff on Canadian lumber that the Biden administration doubled in November 2021 (thanks Joe!) is set to be reduced to the former rate of 8.99%. This obviously, is good news for home buyers wanting to build a new custom home. For example, the “surcharge” modular home manufacturers have in place, have been reduced over the last several months. Some see the decline in lumber prices as a positive sign of cooling inflation.

The recent rise in interest rates, however, may pose a hinderance to the affordability to building a new home. With that being said, last month, the Wall Street Journal reported that mortgage rates fell. Where they go next?

Building a new home takes time. Often times people underestimate the initial planning stage. It takes a while to get all your ducks lined up; buy property, get BOHA septic approvals, house plans, financing, etc. It can be a lengthy process. It’s good idea to start early and get things right. Don’t wait until the first beautiful spring day and say, “I want to build my house this year”. You needn’t wait until the conditions are just right either. Start now, get some information and your ideas in place and you will be ready when it is “the right time”.

If you are considering building a new custom home, give me a shout and we can discuss your plans.