While most industries have been hit hard by the Coronavirus-caused chaos, the home builder industry, has steadily remained on the rise. Together with a stable economy and record low market interest rates, the industry is showing no signs of slowing down. In fact, leading this growth is the decrease in mortgage rates, low unemployment and the increase in wages.
The latest reports by the Department of Commerce, shows spending on private construction has increased 1.5% to $1.023 trillion in December. Spending on home construction climbed 2.1%, which was motivated by a 2.7% rise in single-family home construction.
Now with three consecutive cuts on interest rates as of early March, mortgage rates remain low permitting consumers to borrow more easily. The Federal Reserve is expected to reduce the benchmark lending rate in the coming weeks in order to combat the negative impact of the Coronavirus threat on the economy.
Mortgage rates continue to show a decrease in the last few weeks with the 30-year-fixed-rate mortgage dropping to 3.56 percent from 3.71 percent in Bankrate’s weekly survey, as of early March. This reflects the lowest level since October 2016. Many in the industry are saying we will continue to see decreases forthcoming.
If you have been looking for a new home to build, now is the time to act. With the low supply of existing homes for sale, and demand among buyers, building will likely see an increase. Also, with rates this low you are basically guaranteeing a low payment for the whole life of the loan, with a fixed-rate mortgage.
As experienced and knowledgeable builders in the Southwest Florida area, we are happy to discuss your individual needs and work with you to build your dream home. Below you can find articles for additional information and mortgage rate information. Stay safe and stay healthy!