Welcome to today’s roundup of news in the Real Estate market! In the latest updates, we see a mixed landscape with various factors impacting the industry. Framing lumber prices continue to rise, posing challenges for affordability in new home construction. On the other hand, there is hope for potential buyers as housing market predictions indicate a transitional phase with expected decreases in mortgage rates and increased resale inventory. Additionally, the trend of smaller homes gaining popularity may offer opportunities for first-time buyers. However, challenges persist, with limited housing availability and rising costs affecting both buyers and builders. Despite these obstacles, there are indications of a market shift favoring buyers, with price cuts and potential interest rate reductions on the horizon. To delve into the details of each story, click on the respective links below.
Framing Lumber Prices | NAHB
The price of framing lumber has been on the rise, experiencing its third consecutive weekly increase. This volatility in prices can be attributed to factors such as increased demand, rising tariffs, supply-chain bottlenecks, and insufficient domestic production. The National Association of Home Builders (NAHB) closely monitors lumber prices and provides insights into the U.S. framing lumber market. Softwood lumber, plywood, OSB, and other wood products are essential components of new homes, contributing to their overall cost. Changes in lumber prices directly impact the affordability of new homes, along with rising construction worker wages and higher interest rates. NAHB advocates for actions to address high lumber prices and ease supply-chain challenges. To learn more about framing lumber prices and NAHB’s efforts, click here.
Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor
The housing market is showing signs of entering a transitional phase, with summer sales remaining tepid but potential for increased activity by the end of the season. Mortgage rates are expected to decrease, providing relief to buyers, while resale inventory continues to enter the market, offering more options. The median price for new homes has fallen below the median resale home price, and builders are offering buyer incentives. However, experts believe that the housing market will regain momentum once mortgage rates drop further, easing affordability challenges and incentivizing homeowners to sell and increase inventory. While home prices have seen a slowdown in annual gains, they remain out of reach for many buyers. Despite these challenges, there are indications that the market is tilting toward buyers, with price cuts on listings and the possibility of the Federal Reserve cutting the federal funds rate. To learn more about the housing market predictions for 2024, click here.
New homes are getting smaller. That could be big news for first-time buyers | CNN Business
Traditionally, Americans have desired larger homes, but that trend is changing as the cost of buying a home has skyrocketed. Homebuilders are now focusing on building smaller homes to cater to first-time buyers. The median size of new single-family homes has decreased by 9% since its peak in 2015, with features like formal dining rooms and “bonus” rooms disappearing. Smaller homes under 1,000 square feet are becoming harder to find in US suburbs. This shift towards smaller homes is driven by affordability challenges and the changing preferences of homebuyers. To learn more about this trend and its implications, click here.
Interest rates, builder costs weighing on housing availability | News, Sports, Jobs – The Journal
Realtors and home builders in the New Ulm area are facing challenges due to a shortage of available houses and rising costs. The limited housing listings are quickly being snatched up, especially those priced below $200,000. First-time homebuyers are finding it difficult to find affordable options, and the high interest rates further complicate the situation. Home builders are also struggling as interest rates impact the demand for new homes. Additionally, the rising costs of construction materials and labor contribute to the challenges faced by builders. However, there is hope for improvement in the future, with expectations of more housing becoming available and potential decreases in interest rates. To read more about this issue, click here.
New Home Sales Hit 7-Month Low in June | Window + Door
Sales of newly built, single-family homes experienced a decline in June, reaching the lowest pace since November 2023. The sales rate fell by 0.6% compared to May and is down 7.4% from the previous year. Despite the elevated inventory of new homes, which increased by 11.2% from a year earlier, there is still a need for more construction due to the shortage of resale homes. Elevated mortgage rates have contributed to potential buyers remaining on the sidelines, but the expectation of lower interest rates in the coming months may encourage more buyers to enter the market. To learn more about the state of new home sales, click here.