Big Surge In New Housing Could Mean Low Prices May End SoonA dramatic upswing in new housing starts and the threat of possible inflation mean savvy buyers have been taking advantage of all-time low building affordability index. New home buyers may be looking at their last opportunity to take advantage of the rare combination of low interest rates and low construction costs. Suppressed costs for new construction materials and labor may surge ahead soon as we see housing starts picking up. Recent housing reports show a surge in starts nationally of a whopping 22.2%, the largest jump since January, 1990. With a turnaround in housing stocks supported by an improving stock market, some national suppliers of new housing components may look to increase prices that have been artificially held down, in order to recoup lost increases over the previous 24 months. This is coupled with the fact that many financial experts are projecting that our economy may go into an inflationary mode due to the huge influx of newly printed money that the federal government provided in the past 6 months of bail-outs. When banks and other recipients of these funds finally inject them into the economy, there will be pressure toward inflation will be strong. That means that the new home you buy this year could see a healthy increase in value next year due to the combination of a rebound in suppressed building costs, and the effects of inflation. The good news is that a new home is usually one of the most effective ways to ride the inflationary waves of the economy. Historically, new homes have outpaced just about every other investment available to Americans, and have also held their value better than older homes, or the stock market. There may be no better time to take advantage of the great buying opportunity that exists right now. Additionally, the Federal government has offered an $8000 tax credit for new home buyers, which effectively puts $8000 back into the pockets of first-time home buyers, if occupancy occurs prior to December 1, 2009. Those buyers that hope to take advantage of this healthy bonus realize that they need to get their new home in the ground very soon. Many local builders have had a strong influx of new building interest in recent weeks. Seems like the light at the end of the tunnel may be coming faster than we thought. That's good news for everyone who takes advantage of it. Source: Fidelity.com
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 Our builder showed us how we could get into the school system we wanted and a home that’s flexible enough to accommodate our growing family. We’ll be closer to work, and we’ll also save energy on our utility bills. It’s a win – win for everyone. The kids can’t wait to explore the new neighborhood and we can’t wait to settle in. To think, we almost stayed away from building a new home because we were worried about the mortgage crunch. When we discovered that 99% of homes are not in foreclosure; that made us feel secure in our investment too. |
