This is a very understandable question to be asking if you are currently considering investing in a new Bella Vita Custom Home. I would have to say that I truly feel now is indeed one of the best times to invest in a new Bella Vita Custom Home. The main reasons in my opinion are due to historically low interest rates coupled with the low inventory of available new homes, recent increases in homebuilder confidence, strong signs of recovery in the housing industry and our national economy. These are all very good indicators that the new home industry has indeed turned a corner and is now heading back in the correct direction.
The Federal Reserve‘s latest announcement to keep interest rates incredibly low for a year longer than previously thought- until 2015- should encourage us to take advantage of these currently low rates and borrow money to invest in a new custom home. “That is sort of how the Fed policy of keeping rates low will stimulate the economy: by increasing the disposable income of households through refinancing. And also by keeping interest rates low, it will make it easier for households to buy new houses, which will stimulate the construction sector slightly,” says Bill Hampel, senior vice president of research and policy analysis and chief economist at the Credit Union National Association.
Almost 30 years ago interest rates were above 12% for a 30-year fixed mortgage and just 15 years ago they were in the 7-8+% range and less than 5 years ago you would of been thrilled to lock in a rate around 6%. Today you are currently able to secure a 30-year fixed mortgage in the low 3% arena which is incredibly low and allows you to possibly borrow more than you might be able to if rates went back up to an average of 6+% range. This chart shows trends of the national average mortgage rates on 30-year fixed mortgages, 15-year fixed mortgages and 1-year ARMs since 1985, according to Bankrate’s weekly survey on interest rates.
Shawn Tully, senior editor-at-large for Fortune, argued in a recent article that a severe shortage of new homes was also helping provide the foundation for a resurgence in both new home sales as well as prices. Much of the data referenced was provided by Mike Castleman, chief of Metrostudy. Castleman states, a major reason is the shortage of “ready to go” lots — with permits and basic site work in place — in good locations. “The lots in top locations will all be gone by April of next year,” he says.
Also recently, confidence among the nation’s homebuilders has risen to its highest level since June of 2006. The National Association of Home Builders said its builder confidence index rose for the sixth consecutive month in October. “Many builders are reporting increases in the number of serious buyers visiting their sales offices, and the overall confidence measure is much higher than it was at this time last year,” said the association’s chairman, Barry Rutenberg. The biggest increase in the NAHB’s monthly survey of its members came in measuring traffic of prospective buyers, rising 5 points to its highest level since April of 2006.
Another indicator is the recent increases in the cost of core building commodities which also points to a sign of the steady rise in demand for new homes. New home building costs have been under significant pressure and increases are already being felt in such construction components as concrete, lumber, steel, copper, sheetrock, roofing, and paint. The increases for all construction materials are up 5% in the last year and are up a total of over 35% since 2004. Added to this equation is the fact that labor costs have also been at historic lows not seen in decades during the downturn and workers are now also raising their prices with the upswing in hopes to finally make a sustainable and fair profit.
The Housing Scorecard, a comprehensive report on the nation’s housing market, continues to show signs that the housing market is strengthening. Homeowner equity jumped by 5.9 percent to $7,275 billion in the second quarter of 2012. After a sharp first quarter rise, total equity has grown to $863 billion, or 13.5 percent, since the end of 2011. “As the September housing scorecard indicates, our housing market is showing important signs of recovery – with homeowner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,” said HUD Acting Assistant Secretary Erika Poethig. Another interesting fact that was pointed out in the Urban Land Institute’s 2013 Emerging Trends in Real Estate report is, “At some point, the sheer force of the expanding population (at 2 million to 3 million annually) will create demand for single-family homes, and any upsurge in housing will likely ripple positively through the rest of the real estate industry and the entire economy.”
So, these are the main reasons why I truly feel that now is indeed one of the best times to invest in a new Bella Vita Custom Home. If you are thinking about building a beautiful new custom home, please visit or contact us and allow us the honor of showing you what we can provide for one of your biggest and most important investments. Our team is confident you will realize and agree why we have so many appreciative Bella Vita Custom Home owners that typically only have one wish left after they move-in to their new custom home…
“We just wish we built with you sooner, but so thankful and happy we did.”