Click To See Today's Rates

Posted March 27, 2013
in Real Estate News

Buying From A Homebuilder? Expect To Pay More For That Home In 2013.

Homebuilder confidence slips to 44 in March 2013.

Homebuilder confidence slips to 44 in March 2013.The new construction housing market is building strength, which may lead home prices higher through 2013.

According to the National Association of Home Builders (NAHB), U.S. homebuilder confidence remains elevated as compared to recent years. It's a turnabout which reflects an improving domestic economy plus a growing pool of buyers whom are buying homes faster than builders can build them.

The best "deals" in new construction may be the ones you get today. By 2014, the market may be less friendly.

Click to see today's rates (Feb 11th, 2016).

Homebuilder Optimism : Rising In 2013

In March, for the seventh straight month, the NAHB reports its Housing Market Index (HMI) over 40. The builder confidence metric, which is scored on a scale of 1-100, slipped two points in March to 44.

The dip marks the second consecutive easing for the homebuilder confidence metric. Previously, the HMI had been on an 8-month win streak, stretching through most of last year.

Builders cite rising materials and labor costs as one reason for the recent drop. The improving U.S. economy has rendered homebuilding more costly, which can affect a builder's bottom line.

However, it's a scenario which has also fueled expectations for a strong 2013. By region, confidence is strong as compared to March 2012 :

  • Builder confidence in the Northeast is up 14 points to 39
  • Builder confidence in the Midwest is up 19 points to 50
  • Builder confidence in the South is up 15 points to 42
  • Builder confidence in the West is up 25 points in 57

Furthermore, the nation's homebuilders continue to experience strong foot traffic through model units, and are seeing a certain buyer "urgency"; the result of rising mortgage rates and a growing realization that the housing market is in recovery.

There are fewer homes for sale today than during any point in the last decade. It's no surprise, therefore, that homebuilders expect more sales over the next six months than during any six-month period since 2006.

For home buyers, this can be bad news. With tighter supply comes higher home prices.

Click to see today's rates (Feb 11th, 2016).

Home Buyers Paying More In 2013

After several years of slow growth, the U.S. economy is finally beginning to expand. Job growth has reached 29 consecutive month, business investment remains strong, and the housing market, which has long been a laggard, is more than one year off of its bottom.

For buyers of new construction, economic growth will contribute to higher home prices through 2013. But that's not the only whammy. Rising mortgage rates will weigh on buyers' wallets. Mortgage rates are already off to their worst annual start since 1996, and rates are projected to reach 4.4% later this year.

Every 1 percentage point increase in mortgage rates robs 11% of your home purchasing power. Therefore, if you're among the many U.S. home buyers considering new construction, the "best deals" may be the ones you get today.

See how much home you can afford. Get started with a rate quote today.

Click to see today's rates (Feb 11th, 2016).

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

3 Testimonials

Lorraine L. Medical Compliance

Thank you for The Mortgage Reports. I find your reports to be both helpful and informative.

Stefan J.

The Mortgage Reports is invaluable. It's our primary source for information on housing finance.

Elizabeth C. Librarian

Thanks to The Mortgage Reports, I have a new, very low rate for my home. I owe you so much.

2016 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)