Keep reading to learn more about the impact of low mortgage rates on homebuyers.
This year, mortgage rates have finally begun to drop. This is exciting news for prospective homebuyers as rates go down. Lower mortgage rates give people more purchasing power. This allows more homebuyers the opportunity to buy their dream home. These lower rates, combined with an increase in homebuilder confidence and a surge in new residential construction activity, are setting the stage for 2024 to be a positive year for homebuying.
If you want a new home, now is the time to lock in your rates. At Accessible Home Builders, our mortgage lenders have a float-down option to let customers take advantage of lower rates if they go down further. Keep reading to learn more about the impact of low mortgage rates on homebuyers.
How Do Lower Rates Affect Demand?
As interest rates continue to drop, we can anticipate a boost in demand for new and existing homes as the affordability of mortgage payments improves. While lower mortgage rates will make monthly payments more accessible, this influx of new homebuyers may result in a competitive market, ultimately driving up prices for homes and building materials. More and more people will re-enter the real estate market, and competition for existing homes will increase home prices. As the prices of existing homes increase, more people are looking to build a new home as an alternative.
With more affordable financing options, builders may experience heightened demand for their services, encouraging them to accommodate buyers and expand their offerings. However, this trend can contribute to a surge in demand for builders and newly built homes, which can also affect the availability and cost of new construction.
Low Mortgage Rates Mean More Affordable Builds for Homebuyers
One immediate effect of lower mortgage rates is increased affordability for new home builds.
With lower borrowing costs, homebuyers can qualify for larger construction loans, making upgrading to a brand-new home possible. Lower borrowing costs also make construction loans more accessible for contractors, allowing them to build new homes for lower prices and pass the cost savings to buyers. This expanded purchasing power can also help homebuyers get the special upgrades they want in a new construction home, such as granite countertops, hardwood floors, or custom tile.
Mortgage Rates Vs. Construction Costs
Timing becomes a critical factor for those considering constructing a new home. The perfect scenario would be initiating the home-building process just as mortgage rates begin to decline but before the prices of building materials get too high.
Construction costs tend to rise over time, making today the more affordable option for building a new home. The increased demand for new homes will only exacerbate this upward cost trend.
New Home Construction from Accessible Home Builders
If you are ready to start home-building, you need a reliable contractor like Accessible Home Builders. During this confusing mortgage rate fluctuation time, having someone in your corner is important. As new home costs continue to rise, although not as fast as they have been, now is the time to take advantage of lower rates and beat higher prices. Our mortgage lenders have a float-down option to let customers take advantage of lower rates if they go down further. Ask us for our list of lenders, and we will let you know who does well in our area.
Contact Accessible Home Builders Today
Here at Accessible Home Builders, we’re proud to say we’ve been building and remodeling homes since 1994. We’ve serviced Rehoboth Beach, Lewes, Selbyville, Millsboro, Georgetown, Laurel, and more communities within Delaware in that time. We work to guarantee a high level of professionalism, dedication, and the use of quality materials to ensure our customers have the homes they deserve.
To get in touch with us, give us a call at our office at 302-663-0464, send us an email at info@accessiblehomebuilders.com or visit us in person at 28412 DuPont Blvd, #103 Millsboro, DE 19966. Follow us on Facebook, Twitter, Linked In, and YouTube to stay updated on what we’re up to next!