Interest Rates & Custom Home Construction
Are you concerned about the feasibility of home construction because of higher interest rates for building loans and mortgages? You’re not alone because financial concerns are an important consideration for any home building or buying process.
Unless you can pay for a project in cash, you’ll have to think about this before embarking on your project. We’d like to provide some guidance on this topic and give you some reassurance that higher interest rates do not have to deter you from building a home or remodeling.
Interest Rates & Custom Home Construction
Yes, it’s true that interest rates are higher because of the Federal Reserve’s modest increases in recent months. This does not, however, automatically mean you shouldn’t finance a construction project. It also doesn’t mean you have to abandon home building altogether.
The simple truth of the matter is that building a custom construction home involves playing the long game. Sure, you can hold your breath and wait for lower mortgage rates, but that strategy rarely works. Historically, custom home prices always rise at least somewhat, so it makes little sense to play the interest rate game.
Even if the interest rates for mortgage loans DID NOT increase, the cost of building or buying a home would anyway with material and labor cost inflation. If the cost of the price to purchase of a home rises 3%, it won’t do any good, mathematically speaking, to wait a while to buy/build, hoping that interest rates will go down 2% (back to previous levels).
Then there’s the opportunity cost. Building the house of your dreams has many significant advantages, not the least of which is that you can get out of a living situation you find dissatisfying. Some folks will continue to live somewhere they don’t like, pay ever-increasing rent rates, or deal with maintenance repairs. However, it’s often a much better strategy to build your dream home before the price of EVERY housing option increases even further.
We cannot control shortages, interest rates, or market speculation, but we can control our emotions and attempt to make the most rational decision amid a difficult housing market. At any rate, don’t capitulate on your home-building dreams without going through all the possible financing options. As always, we’re more than happy to help you develop the best course of action for your dream project.
Nutter Custom Construction offers premium home building and remodeling services to aspiring homeowners in the Sarasota area. Finances are a tough hurdle for many, but you don’t have to let economic conditions deter you from making a solid investment in long-term home ownership. We think that the best way to do this is by building a home with the help of our talented construction crews. If you’d like to learn more about our services, contact us at 941-924-1868.
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