Homebuilders See Brighter Days Ahead Despite Mortgage Rate Pressures

While high costs and mortgage rates continue to dampen new home sales, homebuilders are expressing growing optimism about the market’s future.The sleek and contemporary design is both stylish and practical.

According to the latest National Association of Home Builders (NAHB) sentiment index, released Tuesday, builder confidence in the next six months has reached its highest level since April 2022.

NAHB executives attribute this optimism to expectations of regulatory relief following the upcoming presidential election.
“While builders are expressing concerns that high interest rates, elevated construction costs, and a lack of buildable lots continue to act as headwinds, they are also anticipating future regulatory relief in the aftermath of the election,” said NAHB chairman Carl Harris in a prepared statement.

Challenges Persist Amid High Mortgage Rates

Despite their optimism, builders still face significant challenges in the current housing market. High mortgage rates have discouraged buyers, slowing both sales and new home construction in recent years.

Inflation has remained persistent, leading the Federal Reserve to maintain elevated interest rates longer than initially expected. While the Fed made a modest rate cut this fall, borrowing costs remain significantly higher than pre-pandemic levels.

The federal funds rate, which influences mortgage rates, has been at its highest level in two decades as part of the Fed’s strategy to curb inflation. This means home loan rates are likely to stay high for the foreseeable future.
“Mortgage rates are likely to stay above 6% in the year ahead,” said NAHB chief economist Robert Dietz in a statement.

According to Freddie Mac, the average 30-year fixed mortgage rate last week was 6.6%, far above the 2%-3% rates seen during the pandemic or the 4%-5% levels typical before 2020.

Looking Ahead: A Market Poised for Change?

While the current housing market remains challenging, builders are banking on regulatory changes that could provide relief. If policies shift to ease regulations and reduce costs, homebuilders expect increased activity in the months ahead.

For now, buyers and builders alike are keeping a close eye on mortgage rates, inflation trends, and potential economic policy changes that could shape the housing market in 2025.

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When to Move Despite Higher Mortgage Rates

Today’s real estate market has many homeowners feeling stuck. With 30-year mortgage rates currently averaging about 7%, homeowners who secured rates closer to 3% during the pandemic are hesitant to sell their homes. This reluctance to lose their low mortgage rates has created an unusual housing market.Large windows and glass doors allow natural light to pour in, creating a bright and welcoming atmosphere. The adjacent dining area is highlighted by a sophisticated chandelier, offering the perfect setting for memorable dinners.

Life’s major decisions rarely align with ideal market conditions, however. While giving up a low rate might seem unthinkable, mortgage professionals say there are several scenarios in which trading that rate for a new home can be smart.

“There are plenty of good reasons to give up your lower mortgage rate to buy a new home—even if you’re among the majority of Americans holding a rate below 5%,” says Debbie Calixto, loanDepot’s sales manager.

Understanding these scenarios can help you decide whether to hold onto your low home loan rate or move forward with a new home purchase.

Life changes often spark the need for a new home. For example, Calixto points out that growing families might need extra bedrooms or bigger yards. Others might want better schools or shorter commutes. These quality-of-life improvements can make the switch to a higher rate worthwhile. Chris Heller, president of Movoto.com, recently worked with a family who traded their 2.9% rate for a home in a top school district. While the higher rate stretched their budget initially, the long-term benefits were invaluable. “Over time, the property’s appreciation offset the higher costs, and their children thrived academically,” Heller explains. The family plans to refinance when rates drop.

Marriage, divorce, or health issues might also call for a move. These transitions often require quick decisions that can’t wait for perfect market conditions. In these circumstances, the right move gives emotional and practical benefits that outweigh the cost of a higher mortgage rate.

Empty nesters often find that a smaller home’s lower maintenance and energy costs offset the increase in monthly payments. These savings, plus the proceeds from selling a larger home, can improve overall financial flexibility. Heller recalls working with a retired couple who traded their suburban home for a more efficient condo. “[They prioritized] convenience over their old low rate,” Heller says, highlighting how lifestyle benefits can outweigh rate considerations.

Physical needs also drive downsizing decisions. As you get older, you may find multi-story homes become impractical. Some of Calixto’s clients choose single-story homes with aging-in-place features, even if it means taking on a higher rate. These accessible designs help them maintain their independence while preparing for future needs.

Many builders offer attractive perks such as home upgrades, closing cost credits, and temporary rate buydowns to make relocations viable in a high-rate environment. “31% to 33% of homebuilders have been cutting prices every month since July 2024, with reductions of 5% to 6%,” says Jeff Taylor, a board member of the Mortgage Bankers Association and managing director at Mphasis Digital Risk. Even more compelling, about 60% of builders now offer some form of buyer incentive.

A promising promotion or dream job might take you to a new city where you can no longer hold onto your old mortgage rate. One of Heller’s clients faced this exact situation. They traded a 2.75% rate for one at 6% to accept an out-of-state promotion. “The higher salary and long-term career benefits made the move a sound choice,” he says. The increased income more than covered the higher monthly payments.

At times, keeping your low rate makes more sense. For instance, Calixto once worked with a family who wanted to move to a new neighborhood. Despite having substantial equity for a down payment, the higher interest rate and property taxes would’ve strained their budget. “Affordability should always be your top consideration—no matter how compelling the reasons [are] to move,” she says.

Heller and Taylor agree that homeowners should think twice if a move would stretch their budgets too thin. If your home meets your needs and your motivation to move isn’t urgent, keeping that low rate might be the wisest decision.

Trading a low mortgage rate for a new home isn’t a decision to make lightly. “Start by understanding your finances, including the equity in your current home and your budget for the next purchase,” says Heller. Once you know where you stand, meet with several lenders to explore pre-approval options, adjustable-rate mortgages (ARMs), and rate buydowns for potentially below-average mortgage interest rates. From there, a local real estate agent can guide you through current market conditions and available incentives.

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Folsom Secures $100,000 Grant to Transform Village Park

Folsom Mayor Lance Willie expressed excitement about the village’s forthcoming $100,000 grant, marking the first significant state funding for the town in nearly two decades. Announced during the Board of Aldermen meeting on September 9, the grant promises to breathe new life into the park located behind Town Hall. Willie credited newly elected state representative Peter Egan for securing the funds, which were included in Act 776 of the State Legislature’s 2024 Regular Session to provide state aid for local government recreation improvements.Large windows and glass doors allow natural light to pour in, creating a bright and welcoming atmosphere. The adjacent dining area is highlighted by a sophisticated chandelier, offering the perfect setting for memorable dinners.

The park, situated off June Street between La. 40 and Rosa Cryer Street, has been a focal point for Folsom’s community. The property, donated several years ago, already features a covered pavilion ideal for hosting events like weddings and family reunions. A walking trail around the park’s perimeter also attracts residents seeking outdoor activities. However, additional upgrades are necessary to fully realize the park’s potential.

One of the immediate projects underway is the construction of restrooms on the property. The Board of Aldermen previously allocated $40,000 for the project, but most contractor bids exceeded the budget. A bid from Covington-based Tru Consulting and Contracting, slightly over the allocated amount at $47,959, was approved, and construction is set to begin this month.

The $100,000 grant will fund further enhancements, with a portion likely earmarked for lighting to improve safety and usability. Mayor Willie also envisions adding playground equipment to create a family-friendly environment for children during events like fundraisers and cook-offs. He highlighted the need for a fenced-off playground to provide entertainment for kids while adults attend activities at the pavilion.

Board member Jill Mathies suggested seeking public input on park amenities to ensure the upgrades meet community needs. Willie agreed and noted his discussions with St. Tammany Parish Recreation District No. 12 to coordinate efforts and avoid duplicating features available at Magnolia Park. This collaborative approach aims to maximize the park’s value to Folsom residents.

In addition to park improvements, the September 9 meeting introduced annual cost-of-living pay increases for Folsom Police Chief Shilo Bruhl and Town Clerk Margra Steele. Chief Bruhl currently earns $49,140, and Clerk Steele earns $42,255 annually. These adjustments reflect the village’s commitment to supporting its municipal staff alongside infrastructure investments.

The $100,000 grant represents a significant milestone for Folsom, offering an opportunity to enhance community spaces and strengthen connections among residents. With careful planning and public input, the park behind Town Hall is poised to become a vibrant hub for events and recreation.

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Navigating the Decision to Buy a Home Amid Economic Uncertainty

Many prospective homebuyers awaited the Federal Reserve’s meetings in September and November, hoping for relief from the soaring interest rates that have defined the post-pandemic housing market. While the Fed delivered rate cuts—50 basis points in September and another 25 in November—the expected respite for homebuyers failed to materialize. The affordability crisis persists, with some borrowing costs rising even after the September cuts. Treasury yields, which significantly influence mortgage rates, surged following Election Day, reflecting investor concerns that the tax and tariff policies under a Trump presidency could fuel inflation and maintain high borrowing costs.

For those grappling with whether to transition from renting to owning, it is essential to consider whether buying a home aligns with your financial and personal priorities in this challenging market.

Homeownership has always been an expensive endeavor. Beyond the allure of a fixed monthly mortgage payment, owning a home brings additional financial responsibilities. Buyers often underestimate these costs, focusing solely on their monthly mortgage payment without accounting for the broader implications. Ownership includes expenses such as property taxes, homeowners insurance, HOA or condo fees, regular maintenance, and potential renovations or repairs. Once these are factored in, the financial advantage of buying over renting may not hold up.

Renting isn’t necessarily the better option by default either. The decision between renting and buying is nuanced and depends on factors like affordability, long-term plans, and personal goals.

To evaluate the choice more effectively, consider three key questions:

How much of your income will go toward housing?
A general benchmark is to keep total housing costs, whether renting or buying, at 25% or less of your gross income. This threshold allows for a balance between paying for housing and maintaining sufficient cash flow for other expenses, savings, and discretionary spending. Spending more than this can strain your financial health and limit your ability to achieve other goals. Compare the costs of renting versus buying and assess how each aligns with your income.

How long can you commit to living in one place?
Homeownership makes sense when you plan to stay in one location for at least five years. This time frame allows you to build equity and offset the significant transaction costs associated with buying and selling real estate. For those with uncertain plans or a likely move within a few years, renting may be the better option, as real estate is a highly illiquid asset that can be challenging to sell quickly in a volatile market.

What do you actually want?
Cultural narratives often paint homeownership as the ultimate financial goal, but this ideal doesn’t suit everyone. Renting offers flexibility and fewer obligations, while buying provides the potential for equity building and long-term stability. Ultimately, the decision should reflect your unique needs, preferences, and financial goals. If you are content with renting, prioritize saving and investing to build a robust financial foundation. If buying is important to you, create a strategic plan to make it a reality.

The choice to buy a home should be deliberate, guided by your priorities rather than societal expectations. Homeownership is a significant commitment that requires careful planning and financial readiness. Whether you decide to rent or buy, the key is to ensure that the decision supports your overall financial health and aligns with your lifestyle and aspirations.

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Homebuying During the Holidays Can Be a Season of Opportunity or Added Stress

As November unfolds and the holiday season approaches, inflation has cooled from recent highs, and interest rates have edged down following the Federal Reserve’s latest adjustments. These shifts have made this expensive time of year a bit more manageable for American consumers. But with these changes, many are asking: Is now the right time to make a big financial move, like buying a house?The warm wood flooring complements the neutral color palette, creating a cozy and functional retreat within the home. This space is ideal for a quiet office, homework station, or reading corner.

Experts suggest that while the holiday season offers some unique opportunities for buyers, it also comes with challenges. Here’s a closer look at the pros and cons of homebuying during the holidays.

The Pros of Holiday Homebuying

Less Competition and Lower Prices

Winter typically sees fewer buyers in the market, as many families aim to complete their home purchases before the new school year. This seasonal slowdown can work to your advantage.

“With fewer buyers actively looking, there’s less competition, which can mean fewer bidding wars and an easier time securing a home,” says Smitha Ramchandani, a broker associate with Christie’s International Real Estate Group.

The result? More negotiating leverage for buyers. “During the holiday season, sellers are often eager to close quickly, leading to price reductions or flexible terms,” Ramchandani adds. Data supports this: In 2023, the median home sale price fell by 1.1% between October and November and again in December. Nearly 19% of listings saw price drops in November alone, according to Redfin.

Tax Advantages

Buying a home before year-end could also bring tax benefits. “Buyers can claim deductions for mortgage interest, property taxes, and closing costs, which may reduce their tax burden for the current year,” Ramchandani explains.

However, these deductions require itemizing your tax return, so it’s important to calculate whether the benefits outweigh the standard deduction.

Better Access to Professionals

The holiday slowdown can also mean better service. With fewer clients, real estate agents, inspectors, and lenders may be more attentive and accommodating.

“Buyers during this time might expect a higher level of attention from every service provider,” says Douglas Wagner, director of brokerage services with BOND New York Properties. Sellers and their agents are often more flexible as well, eager to schedule showings and close deals before the year ends.

The Cons of Holiday Homebuying

Fewer Listings

While buyers are less active during the holidays, so are sellers. Many homeowners hold off on listing their properties or temporarily withdraw their homes from the market, creating fewer options for buyers.

“Some sellers avoid the disruptions that come with being on the market during the holidays,” says Wagner.

However, Bret Weinstein, founder of Guide Real Estate, notes that this season may be different. “Mortgage rates have bounced back a bit, creating a surplus of holiday inventory and significant room for negotiation,” Weinstein says.

Scheduling Challenges

Holiday schedules can complicate the homebuying process. Coordinating with agents, inspectors, lenders, and attorneys can become tricky with vacations and festivities.

“Flexibility and planning ahead are essential,” says Maria Avellaneda, an associate broker with Keller Williams NYC. Without preparation, delays could occur.

Added Stress

Balancing a home purchase with holiday obligations — from gift shopping to family gatherings — can be overwhelming.

“Buying a home during the holidays adds a layer of stress to an already busy season,” says Louis Adler, co-founder of REAL New York. Still, Adler notes that for some buyers, the benefits can outweigh the stress, especially given the potential for lower prices and better terms.

While the holidays may not be a conventional time to buy a home, they offer unique advantages, such as reduced competition and potential cost savings. However, these benefits must be weighed against challenges like limited inventory, scheduling difficulties, and added stress.

For buyers tempted to wait for further rate reductions in 2025, experts warn that as rates drop, demand will likely increase, potentially driving home prices higher.

Ultimately, the decision comes down to your financial readiness and personal circumstances. If you’re uncertain, consult with a local real estate agent, loan officer, or financial advisor to evaluate your options and make the best decision for your situation.

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Is Now a Good Time to Buy a House?

The real estate market is in a unique position, with mortgage rates remaining stubbornly above 6% despite the Federal Reserve’s recent interest rate cuts. This situation leaves many prospective buyers wondering if it’s the right time to make a move. While market conditions, including rising home prices and limited inventory, can complicate the decision, the choice ultimately depends on your personal financial situation and long-term goals.

Mortgage rates have edged above 6.5% after briefly dipping in late September. Although these rates are significantly higher than the record lows of sub-3% seen during the pandemic, they remain below the historical average of 7.72% over the past 52 years. While this may seem like a modest silver lining, potential buyers should use tools like mortgage calculators to determine if the monthly payments align with their budget.

Home inventory has seen modest improvement, with listings up nearly 34% compared to last year, according to Realtor.com. However, new homes come at a premium, with median prices exceeding $426,000. Additionally, home values are rising, with prices up 4.5% year-over-year. This persistent supply-demand imbalance means buyers should remain vigilant for price reductions and negotiate effectively to secure the best deal.

Buying a house is a significant investment, requiring steady income, a solid credit score, and sufficient savings. Mortgage lenders typically look for a debt-to-income (DTI) ratio below 36%, though some exceptions allow up to 50%. A robust emergency fund and a down payment of at least 3%—preferably 20% to avoid private mortgage insurance—are also essential.

Consider your personal timeline. Buying a home is a medium- to long-term investment, so think about where you want to be in five years. Are you confident in your job stability and location? Homeownership involves additional costs like property taxes, maintenance, and potential moving expenses, so it’s important to weigh the pros and cons carefully.

If you find a home you love at a price you can afford, buying now may make sense, especially if you’re prepared to commit to the current mortgage terms. While you can refinance later if rates drop, it’s crucial to be comfortable with the loan terms on closing day. For those hesitant due to high rates, expanding your search to new construction or homes with recent price reductions may offer better opportunities.

Navigating today’s real estate market requires a combination of smart planning and flexibility. Whether you decide to buy now or wait, it’s essential to focus on what makes sense for your financial situation and long-term goals. Relentlessly shop for the best mortgage rates, consult multiple real estate agents, and remain informed about market trends to make a well-rounded decision.

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7 Ways to Show Your Home Some Love and Keep It in Great Shape

1. Keep an Eye on Your Roof

Your roof is your home’s first line of defense against the elements. While a pre-purchase roof inspection might give you peace of mind, it’s vital to stay vigilant, especially if the roof is nearing its 20-year lifespan. Check for loose or missing shingles, and be alert to ceiling stains that may signal leaks. Roof repairs can cost between $350 and $1,800, while a complete roof replacement can run from $6,000 to $12,000 depending on materials and size. Regular inspections can help you address small issues before they turn into significant expenses.  The image shows a charming two-story house with a classic design, featuring light-colored siding and a gray shingle roof. The front elevation has a welcoming covered porch supported by wooden columns, with a metal awning and brick steps leading up to a double wooden front door flanked by glass panels.

2. Tend to Your Yard and Trees

A beautiful yard enhances your home’s value and curb appeal, but it requires regular upkeep. Large trees add charm and privacy, yet overgrown branches or unhealthy roots can lead to damage. Hire a landscape professional to prune branches away from your house and consult an arborist to assess the health of your trees. Dead or weakened trees can pose risks during storms, and their roots might interfere with plumbing or pavement. Pruning services typically cost between $500 and $2,000 depending on tree size.

3. Upgrade Home Security for More Than Safety

Modern home security systems offer much more than theft protection. With advanced features like water and smoke detectors, these systems can alert you to hidden risks, such as leaks or fire hazards, before they escalate. Upgrading your home security is a worthwhile investment that provides peace of mind and helps prevent expensive repairs.

4. Protect Your Basement from Water Damage

If your home has a basement, ensure it’s properly sealed to keep water out. Foundation cracks, particularly horizontal ones, may signal groundwater pressure and require professional attention. Regularly inspect basement windows, floors, and walls for any signs of leaks. For homes with sump pumps, check them quarterly to ensure they activate when needed. Don’t forget to monitor drains for debris, which could indicate sewer line backups—an issue that’s best addressed early.

5. Maintain Your Water System

Your home’s plumbing system is vital but often overlooked. Familiarize yourself with the locations of the water shutoff valve and meter for emergencies. Periodically check under sinks and around toilets for leaks, and ensure all seals are intact. Have your water heater inspected annually to flush out sediment buildup, which can extend its lifespan. This preventative maintenance typically costs around $200 and can save you from the hefty expense of replacing the unit prematurely.

6. Upgrade and Care for Your Windows

Windows do more than offer a view—they’re integral to energy efficiency. The U.S. Department of Energy reports that inefficient windows can account for 25%–30% of your home’s heating and cooling energy use. Replacing older windows with energy-efficient models featuring thicker panes can significantly reduce energy bills while improving indoor comfort.

7. Invest in HVAC Maintenance

Your HVAC system works year-round to keep your home comfortable. While changing air filters and bleeding radiators are tasks you can handle, leave in-depth maintenance to professionals. Many HVAC providers offer annual service plans, ensuring your furnace is prepped for winter and your AC is ready for summer. This service generally costs between $200 and $400 annually but can extend the life of your system and prevent costly breakdowns.

By staying proactive and addressing these key areas, you’ll not only protect your investment but also create a home that’s safe, efficient, and a joy to live in. Showing your house some love today means fewer headaches and more peace of mind tomorrow.

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A Step-by-Step Guide to Financing a Home Purchase

Buying a house is one of the most significant investments you’ll make, and understanding the financing process can make your homebuying journey smoother and more enjoyable. Here’s a guide to help you navigate the steps, from organizing your finances to closing the deal.

1. Organize Your Finances

Save for a Down Payment

Conventional loans typically require a down payment of 5% to 20% of the home’s purchase price. If you put down less than 20%, you’ll need to pay for private mortgage insurance (PMI), which adds to your monthly payments until you build up 20% equity in your home. If you’re buying a second home, you may be able to use equity from your current home to fund the down payment.

Offering a larger down payment can also help you secure a lower interest rate, potentially saving you money over time. Additionally, be prepared for closing costs, which average about 3% of the home’s purchase price and cover fees like loan processing and underwriting.

Review Your Credit Score

Check your credit score regularly to ensure you’re in good financial shape before applying for a mortgage. You can access your credit report through a “soft inquiry,” which won’t impact your score. Later, when you formally apply for a mortgage, lenders will perform a “hard inquiry,” which is a necessary part of the approval process. Multiple inquiries from mortgage lenders within a short time frame are treated as a single inquiry, minimizing any impact on your credit score.

If you’re applying for a loan on a second or vacation home, banks often require a higher credit score and a larger down payment compared to a primary residence loan.

2. Determine How Much Home You Can Afford

How is Your Mortgage Payment Calculated?

Your mortgage payment usually consists of three main components:

  • Principal: The amount borrowed.
  • Interest: The cost of borrowing.
  • Escrow Contributions: Covers property taxes, homeowners insurance, and possibly PMI. Your lender pays these costs on your behalf throughout the year.

If you plan to rent out a second home, factor in additional costs like property management fees, which typically range from 8% to 12% of rental income.

An online mortgage calculator can help you estimate your monthly payment based on different loan amounts, interest rates, and loan terms.

Debt-to-Income Ratio

Lenders evaluate your debt-to-income (DTI) ratio, which compares your monthly debt payments to your monthly income. To qualify for a mortgage, your DTI generally should be below 43%. However, for your own financial stability, aim to keep your DTI below 36%. If you’re purchasing a second home, lenders may require a DTI of 36% or lower.

3. Understand Your Mortgage Options

How is Your Interest Rate Determined?

Several factors influence your mortgage interest rate:

  • Credit Score: Higher credit scores typically qualify for lower interest rates, while lower scores often result in higher rates.
  • Loan Term: Shorter loan terms, like 15 years, usually offer lower rates than longer terms, like 30 years.
  • Federal Funds Rate: When this rate is low, banks borrow money more cheaply and pass those savings on to you through lower mortgage rates.
  • Lender Variability: Different lenders offer different rates, so shopping around can help you secure the best deal.
  • Residence Classification: Loans for primary residences usually have better rates than those for investment properties or second homes.

FHA Loans vs. Conventional Loans

If you don’t meet the requirements for a conventional loan or prefer a smaller down payment, an FHA loan might be an option. These government-insured loans have more flexible criteria but are designed specifically for primary residences—not rental or vacation properties.

Mortgage Insurance

Avoiding PMI requires a 20% down payment. With conventional loans, you can drop PMI once you reach 20% equity. FHA loans, however, often require you to pay mortgage insurance for at least 11 years, depending on your loan details. They also require Up Front Mortgage Insurance (UFMI), which equals 1.75% of the loan amount and can be paid at closing or rolled into the loan.

4. Get Pre-Qualified or Pre-Approved

Pre-Qualification vs. Pre-Approval

  • Pre-Qualification: A preliminary estimate of how much you can afford, based on self-reported financial information.
  • Pre-Approval: Requires detailed documentation of your finances and results in a more accurate loan amount. It’s generally required when submitting an offer on a home.

While both are helpful, pre-approval carries more weight with sellers since it shows you’re a serious buyer.

5. Find a Property and Make an Offer

Once you’re ready to buy, working with a real estate agent can be beneficial. Agents can help you find homes, understand neighborhoods, and guide you through the purchasing process.

A Real Estate Agent Can:

  • Assess your housing needs.
  • Show you properties in your price range.
  • Suggest financing options.
  • Prepare and negotiate purchase offers.
  • Recommend resources like mortgage brokers and inspectors.
  • Manage closing details once your offer is accepted.

Making an Offer

After finding the right home, your agent will help you make a competitive offer based on market conditions and comparable sales. Sellers may respond with a counteroffer, which your agent can help you review and negotiate.

Once your offer is accepted, you’ll sign a purchase contract that’s contingent on conditions like inspections. At this point, you’ll provide earnest money, typically 1% to 2% of the purchase price, which is held in escrow and goes toward your down payment at closing.

Final Steps: Inspections and Closing

Schedule an inspection to identify any necessary repairs. If significant issues are found, your agent can help negotiate repairs or a price adjustment. After all conditions are met, you’ll proceed to closing, where you’ll finalize the purchase and receive the keys to your new home.

Buying a home involves careful planning, but with the right preparation and support, you can make a confident investment.

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New Homes with Patios Reach Record High in 2023

The trend of adding patios to new single-family homes continued its upward trajectory in 2023, setting yet another record. According to data from the National Association of Home Builders (NAHB), sourced from the Survey of Construction (SOC) conducted by the U.S. Census Bureau, 63.7% of approximately 950,000 new single-family homes started in 2023 included patios. This represents a slight increase from 63.3% in 2022 and marks the eighth consecutive year of record growth.

Steady Growth Over the Past Decade

Patios were relatively rare in the aftermath of the 2008 housing crisis, with fewer than half of new homes featuring them between 2008 and 2011. However, by 2012, the share of new homes with patios had jumped to 52.4%, initiating a long-term trend that has continued for 13 of the past 14 years. The only exception was in 2015, when the percentage remained unchanged.

Geographic Patterns in Patio Installation

Despite the increasing prevalence of patios nationwide, the regional trends have remained consistent. In 2023, only 17% of new homes in New England and 20% in the Middle Atlantic featured patios—the lowest percentages in the country. In contrast, patios were most common in the West South Central region, where over 80% of new homes included them. High percentages were also reported in the South Atlantic and Mountain regions, where roughly 70% of new homes came with patios. These geographic patterns align closely with those observed in previous years.

Characteristics and Size of New-Home Patios

The 2024 Annual Builder Practices Survey (BPS), conducted by Home Innovation Research Labs, offers additional insights into patio characteristics for homes built in 2023. Nationally, the average size of a new-home patio is around 290 square feet, though this varies significantly by region. Patios are largest in the East South Central (over 400 square feet) and New England (about 380 square feet), while they are smaller in the West South Central (under 200 square feet) and the West North Central (a little over 200 square feet).

Patio Building Materials: Regional Preferences

In most parts of the U.S., poured concrete remains the dominant material for new-home patios. For instance, over 90% of patios in the East South Central region are built with poured concrete. However, some regional variations do exist. In the South Atlantic, poured concrete and brick pavers each hold roughly a quarter of the market, while New England’s patio market is split among poured concrete, concrete pavers, and natural stone. Meanwhile, brick pavers are the most popular choice in the Mid-Atlantic region, surpassing other materials.

The Outlook for Patios in New Homes

As new home construction continues to prioritize outdoor living spaces, the presence of patios is likely to remain strong. This trend reflects not only consumer demand for outdoor amenities but also a shift in homebuilding practices toward creating more versatile living environments. With patio sizes and materials varying widely by region, it’s clear that new-home design will continue to adapt to local preferences and lifestyles.

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July 2024 Sees Surge in New Home Sales Amid Market Recovery

July 2024 brought an unexpected boost to the new home market, with the U.S. Census Bureau reporting a seasonally adjusted annual rate of 739,000 new homes sold. This was the highest figure seen in fourteen months, significantly surpassing forecasts of 624,000 units. Although sales declined by 10.6% compared to a revised June figure, they were still 5.6% higher than the previous year. This spike follows a pattern of steady recovery since the start of 2023, after a two-year period of retraction following the pandemic-driven peak in late 2020.The room is bathed in natural light from the large window near the freestanding tub, which offers a serene view of the surrounding nature.

Historically, new home sales have seen notable fluctuations, often mirroring broader economic trends. For instance, after the 1990 recession, sales accelerated, peaking during the housing bubble of 2005. A similar trend was observed starting in 2011, with steady growth until the 2020 peak. However, when population growth is factored in, today’s new home sales are 30.2% below the level seen in 1963, despite being 25.0% higher in absolute terms. As of July 2024, the 30-year mortgage rate stood at 6.46%, which continues to challenge affordability for many prospective buyers.

The median price of a new home in July was $429,800, marking a 3.1% increase from the previous month. However, prices were 1.4% lower than in July 2023. When adjusted for inflation, the month-over-month increase stood at 3.0%, while the year-over-year drop extended to 4.2%. This underscores the persistent volatility in home pricing, as demand fluctuates in response to economic conditions and mortgage rate trends.

Despite the positive sales numbers, experts urge caution. The National Association of Home Builders (NAHB) pointed out discrepancies between the Census Bureau’s optimistic sales figures and the NAHB/Wells Fargo Housing Market Index, which showed weakness in builder sentiment. The NAHB also highlighted that while mortgage rates dipped slightly in July, ongoing affordability issues and higher construction costs remain obstacles. There is optimism, however, that easing monetary policies and falling interest rates could drive further improvements in the homebuilding sector.

New home inventory in July decreased by 1.1% from the previous month, with 462,000 units available, translating to a 7.5-month supply at the current sales pace. This inventory level is above the typical balance point of six months but still reflects tight availability when considering both new and existing homes. Regionally, the Midwest experienced the largest year-to-date sales growth at 22.1%, followed by the West at 6.1% and the Northeast at 5.4%, while the South saw a 2.4% decline.

In summary, July 2024 marked a key turning point for new home sales, offering hope for continued recovery in the housing market despite persistent affordability challenges and volatility in builder sentiment.

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