New Home Prices Spike as building costs increase due to construction material costs 2020

New Home Prices Spike as home building costs increase due to construction material costs surge 2020. This year has been a crazy year for everyone, and especially crazy for anyone in the market for a new home. While COVID 19 has impacted everyone, it has had a huge impact on the housing market of 2020. Interest rates are at historic lows, people want their own home (especially ones that are brand new, safe, and clean) with their own yard away from others. Needless to say, there are a lot of buyers in the market right now. However, inventory is low, and sales are at a record pace. As such, buyers are being prepared to pay top dollar in today’s real estate market.

While builders are looking to cash in on this housing opportunity, they are busy with their own challenges of keeping up with demand and combating the ever-increasing material costs. In fact, this year alone, lumber prices have increased and today cost nearly three times as much as they did in January 2020. Those price increases are being passed on, so we are seeing new home prices skyrocketing especially where demand for homes has increased, such as here in Central Pennsylvania.

If you have been thinking of buying a new home, don’t wait. Prices are projected to continue to rise over the rest of the year as well. As builder backlogs grow and supply shortages occur, materials and costs will continue to be a market force impacting home prices.

Also, it may take another year or so for inventory to return to normal levels. Sellers who realize they could get top dollar for their home are finding that if they sell, there is nowhere else to go. Apartments are filled and have waiting lists, no other homes are available, and it would take 8 months on avg to build. All factors preventing existing homes from hitting the market and keeping inventory low. This could be the climax of the “pent up demand” we’ve been hearing about for years.

When it’s time to build your next new home, Let Steve Turner The New Home Sales Pro help you. As a real estate professional and homebuilding executive in Central PA, Steve’s network of trust professionals spans from coast to coast. Allowing Steve and his team to find a way to help you no matter where you want to live.

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