Why it’s still a great time to buy a new home in the Raleigh housing market
Raleigh, NC, is one of the best places to live in the U.S., for so many reasons. The overall quality of life in this Research Triangle city appeals to people of all ages, whether you’re just starting out, moving up, or retiring. If you’re now in the market to buy a new home, you might be wishing you had acted sooner, looking wistfully at the prices and interest rates that lingered through 2021. Stop looking back and start looking ahead! In spite of the rising cost of homes anywhere in the country, here’s why it’s still a great time to buy a new home in the Raleigh housing market.
Home price increases explained for the housing market in Raleigh, NC
According to Zillow, home values have increased 20.7% over the past year. That’s great news for homeowners who are gaining equity faster than they would have expected a few years ago. Homebuyers, meanwhile, have seen rising costs that resulted from pandemic-induced shortages, like building materials and labor. The price of lumber skyrocketed since 2020, nearly tripling, which added an average of $18,600 to the construction of a single-family home—and often much more!
Lumber reached a high of $1,522.77 per-thousand-board-foot in March 2021, up from $454.20 last August. In June 2022, the price dropped to $541.10 per board foot, a hopeful sign that manufacturing is catching up with demand and distribution bottlenecks are being resolved.
It’s not just the lumber that saw a dramatic price increase. The cost of windows, doors, steel, concrete, paint, siding, and appliances also rose as a result of the low supply and high demand for new construction homes over the past two years.
The Great Resignation hit America, including the home construction industry. Workers didn’t rush to return to work when the shelter-at-home restriction was lifted. Home builders found it difficult to meet the demand for new construction homes in Raleigh and around the country when they couldn’t get materials and the skilled laborers to do the building.
But if you want to move to the Research Triangle, don’t fret! It’s still a great time to buy a new home in the red-hot the Raleigh housing market. New Home Inc. has worked hard through the pandemic to source the materials and workers to build quality single-family homes and townhomes that meet our high standard for creative design, desirable features, and great location.
Put the interest rate in perspective.
We’ve all witnessed historically low rates during the pandemic, a big reason people were so eager to buy a home. In December 2020, the 30-year fixed rate was 2.68%, the lowest in recorded history. The mortgage rate stayed in the same area through most of 2021.
In the beginning of 2022, the interest rate hovered around 3.45%, still very appealing. But inflation increased by 8.45%. The interest rate would, of course, follow this lead. At this writing, the interest rate for a 30-year fixed rate mortgage is at 5.8%. Yes, it’s higher than last year’s all-time low, but it’s still a great rate!
If you were buying a home in the 1980s, you would have jumped at the chance to get anything less than 10% for your mortgage. In 1981, the rate for a 30-year fixed rate was a whopping 18.45%! It was until the next decade that rates dropped to a single-digit number.
Stop looking at the higher price of the loan or the home and start looking at the value! A new construction home makes for a smart investment. You’re getting a brand new home, made with the latest and greatest in materials and methods, like energy efficiency and smart home automation. Your home is fully warranted so you can move in without worrying about having to replace the roof or the air conditioner, or whether the furnace will last through the winter. You have no concerns about what the previous owner did (or didn’t do) or home maintenance.
And…it’s new. We all know that a newer home has higher resale value than a comparable one that is years older. Real estate is a smart investment, and now is a great time to buy a new home in Raleigh.
Why Now is Still a Great Time to Buy
With the fluctuating nature of the housing market, when is the best time to buy a new home in Raleigh? The answer is simple: when you are ready. If you are ready to make a move and build your dream home now, and are financially able, there is no question that it is a great time to buy. Interest rates continue to be low, which means, even with rise in home prices, you can still afford “more house” than you could a few years ago. As rates start to increase along with the cost of real estate, the total has a direct impact on how much home you can buy for the same amount of money—which means, the sooner, the better.
In summary, yes — the real estate and mortgage industries can be unpredictable, but there is no guarantee that tomorrow, next month, or next year will be a better time to buy than today. In fact, the inflation and other forecasts continue to show that housing costs will continue to increase for the foreseeable future, as it has throughout history.
At New Home Inc., we are thankful for our strong vendor relationships that have enabled us to continue building homes for our valued customers even in times of uncertainty. We are proud to offer expertly-crafted, uniquely-designed, new homes throughout the greater Raleigh area. We invite you to learn more about the steps to buying a new home. Look at New Home Inc.’s available new homes for sale in Raleigh and the Raleigh suburbs of Apex, Fuquay-Varina, and Selma. The next step is reaching out so we can help you learn more about what and we’re we are building so you can take advantage of all the benefits of buying a new home in the Raleigh housing market!