July 16, 2024 Housing Market News

Welcome to today’s real estate news! In the ever-evolving housing market, buyers are discovering new opportunities and potential discounts in the new-home market. With the resale housing stock remaining tight, new construction offers more options and affordability through mortgage rate buydowns and sales incentives. The National Association of Home Builders reports a drop in framing lumber prices, providing hope for more affordable new homes. However, challenges persist, such as the shortage of 4.5 million homes and the slowdown in apartment construction, impacting both renters and homeowners. Additionally, insurance costs and supply chain issues affect home-buying and new construction. On a positive note, Las Vegas builders have experienced a robust May in home sales, signaling a thriving market. Explore these stories to gain insights into the latest trends and developments in the real estate industry.

Buyers May Be Drawn to Discounts in New-Home Market

As the resale housing stock remains tight, home buyers are finding more options and potential discounts by considering new construction. According to a report by Harvard University’s Joint Center for Housing Studies, new-home construction has accounted for about a third of the national single-family inventory since 2021, offering a significant increase compared to previous decades. Homebuilders are now competing for buyers’ attention by offering mortgage rate buydowns and sales incentives to improve affordability without lowering prices. Additionally, builders are focusing on building smaller, lower-cost options and expanding into the rental market to accommodate buyers who are being priced out of homeownership. Despite challenges such as labor shortages and rising material costs, the new-home market is seen as a bright spot in the housing market. Discover the benefits and discounts available in the new-home market.

Learn More

Framing Lumber Prices | NAHB

As of July 12, 2024, framing lumber prices have dropped to their lowest level since April 2020. The National Association of Home Builders (NAHB) continually tracks the latest lumber prices and provides insights into the U.S. framing lumber market. Softwood lumber prices have been volatile due to increased demand, rising tariffs, supply-chain bottlenecks, and insufficient domestic production.

NAHB advocates for actions to address high lumber prices, including mortgage rate buydowns offered by homebuilders to improve affordability without lowering prices. Builders are also focusing on smaller, lower-cost options and expanding into the rental market to accommodate buyers who are being priced out of homeownership.

The cost of softwood lumber directly impacts the price of a new home, along with rising wages for construction workers and higher interest rates. Builders may see price relief once mill prices have substantially decreased and stabilized. However, the length of this “waiting period” for price reductions varies depending on builder size, supplier size, and the buyer-seller relationship.

NAHB’s efforts aim to tackle the affordability crisis and address key issues in the housing market. Explore the full lumber report to learn more about their initiatives.

Learn More

Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor

The housing market in 2024 presents challenges for prospective home buyers, with high mortgage rates and soaring home prices impacting affordability. However, there are some positive signs, such as an increase in resale inventory and a decline in the median price for new homes. Experts believe that a housing market recovery will depend on several factors, including a significant increase in home inventory, cooling mortgage rates, and a gradual improvement in buyer opportunities. While experts expect the market to improve, the timing of any rate cuts and a return to more affordable prices remains uncertain. Explore the latest insights into the housing market and gain expert tips for navigating this challenging environment.

Learn More

Builders slow new apartment construction, but landlords will keep ‘jacking up’ rental prices | Fortune

The U.S. housing market is facing a shortage of 4.5 million homes, worsening the affordability crisis for both renters and homeowners. However, builders are slowing down new apartment construction, exacerbating the supply issue. Permits for multifamily housing units have dropped by 30% this year, making it more difficult for property owners to find tenants. Landlords have started offering concessions to attract renters, but this may not last long as the market fills up. Builders cite high costs, inflation, and lack of financing options as reasons for the slowdown. While landlords currently face challenges in filling vacancies, the lack of housing starts will eventually catch up, leading to potential rent increases. Explore the dynamics of the rental market and the impact on affordability.

Learn More

Insurance costs impact home-buying, new construction

Louisiana’s insurance crisis and interest rates are not only affecting homeowners but also those involved in building houses. The Home Builders Association of Greater New Orleans discussed the impact of higher insurance rates during a recent meeting. While mortgage rates have suppressed new construction, the new homes being built are resilient and receive the lowest insurance rates. However, insurance premiums have soared after recent hurricanes, causing problems for buyers. Builders are also facing increased builders’ risk insurance and reinsurance prices. Despite these challenges, homeowners can reduce their insurance premiums through wind mitigation surveys. As housing inventory needs to increase, the adaptive reuse of commercial property is being considered to provide more apartment units. Inflation and mortgage rates are predicted to decrease, but supply chain issues still persist. To learn more about the impact of insurance costs on home-buying and new construction, click here.

Builders post strong May home sales numbers | Las Vegas Business Press

Las Vegas builders reported their strongest May in home sales since prior to the pandemic and are on track for their second-best year since 2020. Home Builders Research recorded 1,273 new home net sales in May, surpassing previous years and indicating a thriving market. Despite rising mortgage rates, builders continue to buy down interest rates to help buyers secure their homes. The cancellation percentage remains low, and builders are converting a high percentage of buyer traffic into sales. With new projects opening and increased market share, the housing market in Las Vegas shows promising growth.

Read More