Starter Homes Not Being Built?

It does seem that builders are going with more mid- to upper-price ranged homes.  This article is a national snapshot, but there’s no doubt that the increase in material and labor costs and the shortage of skilled tradesmen is having an effect.  And vacant land prices are rebounding, too.

I’ve seen build jobs routinely go over the estimate and small, local builders can find it challenging to get construction loans for their clients, although that is getting better, too.  How much is one reason and how much another?  I’m not sure it really matters. 

I believe that a lot of folks are still not confident in the economy even though the major indicators are looking good, interest rates are staying low (for now), and the stock market is doing very well.  What are your thoughts?

Average Down Payments Reported; Rents Are Increasing

The National Association of Realtors (NAR) recently released a number of economic reports. One summarized the average down payments provided by home buyers for different parts of the country. (We’re in the East South Central, along with WI, IL, IN and OH.) Our area works out to be in the 5% zone (lowest in the country), but the figures vary greatly and the national average is 8% down payment. Middle Atlantic States (NY, PA, NJ) led the crowd with an average 12% down payment amount.

I know from working with local lenders that even the ‘affordable’ housing purchase programs are now requiring some form of down payment or increasing the percentage needed to purchase. 100% financing may be on the way out, and that is probably a good thing.

Another recent report highlights the fact that nationwide rents are increasing. The report does not specify amounts, but merely indicates that monthly rentals are getting more expensive. With the foreclosures that are still occurring, this is not a surprise. Those folks will have a short term reality of renting for the most part.