Home builder encourages buying homes while interest rates are low
Supplies to build a home may be historically high, but Bart Liddon emphasizes that interest rates are lower than ever.
DOTHAN, Ala. (WTVY) - The Associated Press released that U.S home construction fell 9.5% in April. That equates to about 1.57 million units built. That is down from 1.73 million units in March.
Economists attributed that partially to builders who delayed projects because of a surge in lumber prices and other supply constraints. One Wiregrass home builder, agrees.
“A number of home builders have just stopped building homes in the past month or two because the cost to build has just gotten so out of align to what people in this area can afford,” Bart Liddon, Bart Liddon Homes, LLC., said.
Liddon has been in the home building business for 45 years. He said this is not the only delay home builders face right now.
“There is a shortage of land to build new homes, there is a shortage of labor to build new homes and so it’s like any other supply and demand situation,” Liddon said.
Liddon said they are not seeing a slow down in demand.
“Nationwide the housing industry has just really had a great year, now the question is, ‘Is it going to continue?’” Liddon said. “And I suspect not because of the cost of building material right now.”
Home builders want to see those prices come down, however, that may not happen any time soon; according to Liddon.
“While there may be somewhat of an adjustment in prices, we are not going to see them come down to where they were a year ago,” Liddon said.
Supplies to build a home may be historically high, but Liddon emphasizes that interest rates are lower than ever.
“The cost on a monthly payment bases is roughly the same compared to a year ago,” Liddon said.
That current mortgage rate is 3.125%, according to US bank. But according to Liddon, that may change.
“We are not so sure that interest rates while there are at historically lows right now,” Liddon said. “There is some indication that they are going to be going up due to the federal government pumping so much money into the economy, there’s liable to start being inflationary pressures. So, now is a very good time to go out and be buying something while interest rates are at these historic lows because they may not stay this low for very much longer.”
The low interest rates are making the resale housing market quite popular.
“As long as interest rates stay low, people are out buying resale houses right now in huge numbers,” Liddon said.
Liddon said there has been no slow down for remodeling homes, with low inventory houses on the market with low interest rates, he said home sales should continue to do well.
According to the Associated Press, the April decline in construction was led by a 34% fall in the Midwest followed by an 11.5% drop in the South.
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