Welcome to our comprehensive coverage of today’s real estate news, where we delve into the latest trends and challenges affecting the housing market. From new-home discounts attracting buyers amid a tight resale market to the implications of new energy standards on housing costs, and the impact of high interest rates on construction in Colorado, our stories provide a deep dive into the factors shaping home buying and building today. Discover how local developments in Maple Grove are leading in home construction permits, explore fluctuations in lumber prices, and understand the significant role of insurance costs in home ownership. Join us as we explore these critical issues affecting both current and future homeowners.
Buyers May Be Drawn to Discounts in New-Home Market
With the tight resale housing stock, home buyers are turning to new construction for more options. 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. Homebuilders are offering mortgage rate buydowns to improve affordability without lowering prices, attracting buyers’ attention. Additionally, builders are constructing smaller, lower-cost options and focusing on the rental market to accommodate buyers who are priced out of homeownership. Despite obstacles like labor shortages and rising material costs, the new-home market offers potential discounts for buyers.
Biden admin rebuffs lawmakers’ claims new energy standards will exacerbate ‘dream-killing’ housing costs | Fox News
The Biden administration has rejected claims from Congress and homebuilder groups that new energy efficiency standards for home construction will worsen the economic situation. The Department of Housing & Urban Development (HUD) and Department of Agriculture recently enacted updated energy efficiency standards for federally-financed homes. Despite concerns about affordability and inflation, a Biden-Harris administration official stated that the new standards will result in cost savings for homeowners and improve energy efficiency. Lawmakers opposing the standards argue that they will increase home prices and disproportionately affect underserved communities. Read more to understand the debate.
Colorado home building suffers from high interest rates
The high mortgage interest rates have made homes less affordable, leading to a decline in demand and a reduction in new home construction. Approved home permits in Colorado have significantly decreased, with total approved housing down 41 percent compared to two years ago. The decline is even more pronounced in planned multifamily apartment construction. However, home builders have adjusted to the high interest rates by offering incentives to buyers, such as interest rate buydowns and price reductions. Despite the challenges, home builders remain optimistic about the market. Read more to understand the impact of high interest rates on Colorado’s housing market.
Maple Grove Leads Metro in Home Construction Permits
Maple Grove, a city in the northwest metro, is experiencing a surge in residential home construction. In June, more homebuilding permits were issued in Maple Grove than any other city in the metro area. The permits include a mix of single-family homes and townhomes, with most of the development taking place in the northwest corner of the city. The area’s desirability is attributed to its highly regarded school district and planned expansions. Despite the ongoing development, Maple Grove is still only 85 percent developed. In contrast, the construction of new apartments in the metro area is virtually nonexistent. Discover more about Maple Grove’s thriving home construction market.
Framing Lumber Prices | NAHB
NAHB provides an overview of the behaviors within the U.S. framing lumber market, including the latest lumber prices and plywood prices. Softwood lumber prices have been volatile due to increased demand, rising tariffs, supply-chain bottlenecks, and insufficient domestic production. The cost of lumber directly impacts the price of a new home, along with rising wages for construction workers and higher interest rates, contributing to declining affordability in the housing market. Homebuilders and remodelers may experience price relief once mill prices stabilize or decrease for an extended period. Learn more about NAHB’s efforts to address supply-chain challenges and the United States-Mexico-Canada Agreement’s impact on housing affordability.
Insurance costs impact home-buying, new construction
The rising insurance rates in Louisiana are impacting both homeowners and home builders. Higher mortgage rates have suppressed new building construction, but the new homes being built are more resilient and thus receive lower insurance rates. After hurricanes Laura and Ida, insurance premiums soared, affecting potential homeowners. Builders also face increased costs for builders’ risk insurance and reinsurance. The insurance climate has contributed to a decline in new single-family residential construction permits. Homeowners can potentially reduce their insurance premiums by obtaining a wind mitigation survey. Despite the challenges, housing inventory needs to increase, and there is a focus on converting commercial buildings into condos and apartments. While supply chain issues have improved, challenges with items like electrical transformers persist. Read more to understand the impact of insurance costs on home buying and new construction.