Welcome to today’s roundup of the latest in real estate news! From fluctuating home prices and new federal regulations impacting construction costs to debates over who should fund water infrastructure in expanding cities, our coverage spans a variety of crucial topics that affect both current homeowners and potential buyers. Whether you’re interested in the economic forecasts for housing affordability, updates on lumber prices, or the implications of new energy standards on home prices, our articles provide in-depth analysis and expert insights. Dive into these discussions to stay informed about the dynamic real estate market and make well-informed decisions in your property ventures.
Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor
The spring home-buying season has been slow to start due to rising mortgage rates and affordability challenges. While sales of newly built homes are thriving, sales of existing homes have stagnated, contributing to the low housing supply. In April, a $418 million real estate broker commissions settlement was preliminarily approved, which will bring significant changes to the industry’s buying and selling model starting in July.
Despite ongoing affordability hurdles, Fannie Mae forecasts an increase in home sales transactions compared to last year, with a slower increase in home prices. However, price fluctuations will vary regionally and depend on local market supply. Home prices have posted an annual 6.4% gain, reaching all-time highs.
For a housing recovery to occur, inventories of homes for sale need to increase, and mortgage rates need to cool off gradually. The settlement agreement by the National Association of Realtors (NAR) will change the costs associated with buying and selling a home, decoupling seller and buyer commissions.
The housing market remains challenging for buyers, with high mortgage rates and soaring home prices. However, experts predict a gradual build in inventory this year and slowing home price growth. It is crucial for aspiring buyers to be in a solid financial position before entering the market.
Framing Lumber Prices | NAHB
NAHB provides an overview of the behaviors within the U.S. framing lumber market, tracking the latest lumber prices and futures 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, contributing to declining affordability in the housing market.
Homebuilders and remodelers can expect price relief once mill prices have substantially decreased or stabilized for an extended period. However, the length of this “waiting period” varies depending on builder size, supplier size, and the buyer-seller relationship. Higher prices reach builders more quickly when market prices are increasing, as wholesalers tend to buy inventory at or near current market prices.
To tackle the affordability crisis, NAHB is actively working to ease supply-chain challenges and address key issues in the housing market. For a comprehensive list of NAHB’s efforts and to learn more about framing lumber prices, you can explore the full lumber report.
New Biden Energy Rules Will Raise the Cost of a New Home by $31,000 – MishTalk
The Department of Housing and Urban Development (HUD) is mandating costly new energy standards for new homes insured by the Federal Housing Administration (FHA), which will become de facto nationwide building codes. The National Association of Home Builders estimates that these energy rules can add as much as $31,000 to the price of a new home. It could take up to 90 years for buyers to realize a payback on the higher upfront costs through lower energy bills. HUD anticipates that taxpayers will help cover the cost through tax incentives and rebates. However, even with subsidies, HUD estimates that the price of a new home will go up by $7,229.
Generational homeownership rates show a significant gap between Generation Z and millennials, as well as a large homeownership rate gap between Black Americans and White Americans. The latest Case-Shiller housing data reveals that home prices have hit a new record high. These factors, along with rising inflation and concerns about affordability, may impact the 2024 presidential election.
How Much Does It Cost to Build a House in 2024?
Building your dream home can be an exciting but daunting task, especially considering the current real estate market. The average cost to build a house in 2024 is $329,000, or about $150 per square foot. However, this figure varies greatly depending on your location in the United States, ranging from around $250,000 in Arkansas to over $400,000 in places like California and Hawaii. These costs do not include the price of land, which can range from $20,000 to $200,000 on average.
Several factors contribute to the rising cost of building a house, including material shortages, labor shortages, and increased transportation costs. Despite these challenges, building a new home offers advantages such as lower operating costs and the ability to customize every aspect of your home to your liking.
The budget for building a house includes various categories such as architectural plans, land costs, general contractor fees, foundation costs, electrical, plumbing, and HVAC systems, framing, materials, insulation, drywall, exterior finishes, roofing, windows and doors, fixtures and lighting, cabinetry and countertops, flooring, painting, appliances, landscaping, irrigation, driveway, and additional expenses like permits, temporary power, portable toilets, and dumpsters.
While building a home can be costly, there are ways to save money, such as negotiating prices, considering vertical square footage, DIYing certain tasks, and planning for future accessibility needs. Additionally, builders often offer incentives to attract buyers, making it a potentially cost-effective option in the current high-interest-rate environment.
Who should pay for new water infrastructure in El Paso?
The El Paso City Council is facing a complex decision on whether developers and new homebuyers should bear the cost of new growth. As the city expands into the desert, El Paso Water ratepayers are increasingly burdened with the cost of extending water and sewer lines to new neighborhoods.
Currently, every home and business in the city pays extra on their monthly water bill to cover the cost of providing service to new housing developments. However, the council is considering an increase in impact fees that would require homebuilders to pay thousands of dollars more per home to offset these costs.
The debate revolves around whether homebuilders should contribute more to the new infrastructure, potentially passing the cost onto new homebuyers. Increasing developers’ fees may also discourage urban sprawl and encourage building closer to the city’s core. On the other hand, some argue that spreading smaller increases among all customers, not just developers, could fuel expansion in El Paso.
The outcome of the upcoming vote is uncertain, as one council member was absent during the previous vote. Mayor Oscar Leeser, who could cast the tie-breaking vote, has expressed opposition to increasing the fees, citing concerns about potential price increases for new homes and the risk of developers building outside the city limits.
The fees have remained unchanged since 2009, while the costs for El Paso Water to build out water and sewer lines have increased significantly. Consultants estimate that homebuilders should be paying much higher fees to cover the costs of infrastructure expansion.
Regardless of the upcoming vote, El Paso Water will continue to raise rates to finance the renovation of aging water and sewer systems and fund projects serving new neighborhoods. The utility plans to spend billions of dollars on capital improvement projects in the coming years.
The decision on impact fees not only affects the cost of new development but also has implications for climate change and air quality efforts in El Paso. Encouraging in-fill development and reducing vehicle miles traveled are key goals, and impact fees could play a role in promoting these objectives.