Why Are Home Prices Increasing
If you are currently in the market for a home, then it’s no surprise to you that home prices are on the rise throughout Central Ohio. Limited inventory and increasing demand are two of the main reasons for housing increases across the country. Pandemic related issues have increased the cost of construction materials for homebuilders. While this may seem daunting to today’s homebuyer, the value of your home is projected to continue to increase long after you’ve closed on your home. We’ve taken a look at some of the factors affecting home prices and what it may mean for you.
According to the National Association of Realtors, median home prices are expected to increase by 8% this year. In Franklin County, Columbus Realtors reported a 10% increase in median home prices in February 2021 compared to February 2020. The same report shows that the inventory of homes for sale in Franklin County from February 2020 to 2021 decreased by 39.3%. While the number of homes for sale has decreased and prices have increased, demand for homes certainly has not decreased. Record breaking interest rates are attractive to today’s buyers. As Central Ohio’s population continues to grow, more and more people want a home of their own.
Building a home vs. buying a pre-existing home in today’s market has its advantages. Along with the typical benefits of building a home such as custom options, brand new features, modern planned communities, and more; home buyers are also happy to not have to compete in the traditional market where competition is steep. Build a home in the area of town you want to be in and get the features you want. Also rest assured as home prices are predicted to continue to rise, the value of your newly built home will increase as well.
While it’s a great time to build, home builders are also facing challenges of rising construction costs. According to the National Association of Builders lumber prices are up 180% compared to last spring. Granite, steel, paint, drywall, and other construction materials have seen a hike in prices as well. The primary reason behind the price increases is pandemic related. Supply chains have been strained in several industries, production was put on hold or limited during lockdowns. Wildfires in the west also had a negative impact on the lumber industry. Trade was impacted. Increased oil prices affect many of the materials used in construction, including paint, roofing, and flooring. The rising cost of steel has impacted everything from appliances to steel studs. For these reasons, the actual cost of building a home has increased.
Rockford Homes works with our customers to build the best quality home that fits their needs and budget. We help customers navigate through current challenges and get families into homes they love. While this may seem overwhelming, the good news is, as housing demand remains strong and home values continue to rise, building your dream home is still a great idea!