If you are considering home construction companies because you have been eagerly planning and saving for a new home, you might be discouraged by recent news headlines. Higher mortgage rates, supply chain hiccups, labor shortages and low housing inventory aren’t exactly the ideal conditions for today’s prospective homebuyers. At Gateway Construction, LLC, we talk to people with these concerns every day. While we can’t change what’s happening in the news, we do have some common-sense recommendations to help you make the best decision for your situation.
Navigating the Current Market
Inflation remains elevated and over the past few months, the Federal Reserve has responded with a series of interest rate hikes to curb demand and cool inflation. Experts believe it will be a while before the Fed moves away from rate increases and rates are not likely to come down to the record lows seen in recent years. A forecast by the financial services website Bankrate predicts that the interest rate for a 30-year fixed-rate mortgage will fall to 5.25 percent in the U.S. by the end of the year. That’s significantly higher than the record-low 2.65 percent rate of January 2021 but almost two percentage points lower than the peak rate of 7.12 percent hit in late 2022. Historically, all rates we’re seeing today are lower than average: the 30-year mortgage has averaged 7.75 percent since 1971.
While there will always be valid reasons to delay a home purchase, for most of our clients, it is still a great time to shop home construction companies and build a new home. Here are some things to think about when making this important decision.
Reasons to Build Now
Less Available Land/The Cost of Development
Finding land to build on is becoming harder. In a recent survey by the National Association of Home Builders, 76 percent of builders reported that the supply of developed lots in their area is “low to very low.” And while we enjoy wide-open spaces in Wyoming, the cost to prepare land for residential construction can be very daunting — think permitting, grading, building an access road, digging a well and installing utilities before any construction starts.
When you build in an existing community, the infrastructure has been already established by a developer. If you find a neighborhood you love that checks all the boxes for location, size, school district and commute time to work, it may make sense to buy now before someone else does.
An Uncertain Future
While it may feel safer to wait, you don’t want to delay only to find prices and interest rates are up when you have to buy. It is unlikely that material costs will decrease enough in coming years to warrant a wait and, with available housing at record lows and demand growing, you just can’t count on prices going down. As an alternative, you can always buy now and refinance in the future if rates fall. Learn more about how to beat rising mortgage rates.
A New Place to Call Home
You likely have multiple reasons you want to build a new home. Maybe you’re tired of dealing with expensive repairs to an older home or you are exhausted by a seemingly endless commute. The sooner you interview home construction companies and get started on a build, the sooner you’ll have a brand-new place that improves your lifestyle.
Get Started on Your Dream Home Today
Ultimately, the right time to build a house is when you’re ready. It helps to have ideal market conditions to work with but that’s not a necessity if you have the resources and time to build. We invite you to learn more about Gateway Construction and all the benefits we can offer you by contacting us today at (307) 632-8950 or submitting our online contact form. We are one of the area’s leading home construction companies and we are ready to build the dream home you’ve always wanted! We are also offering limited-time incentives on completed Gateway homes — contact us today for more details.