Building a home is not just about having a roof over your head but a long-term investment. Apart from offering you and your family a place to call home, the property will also serve as an investment that you could sell off to settle liabilities or acquire more assets. As such, the decision to build one requires proper thought and due diligence. Nevertheless, here’s what the industry looks like for those who intend to construct homes in 2022.
Lower Construction Costs
The COVID-19 pandemic disrupted many supply chains, impacting great panic among home developers and builders. The crisis drove production costs higher, affecting the entire manufacturing industry. That has surged the prices of building materials for homes. However, experts predict that the continued global economic growth will enable many companies to re-stock their shelves and fix the bottlenecks in the supply chain, driving down the construction costs.
Relatively Lower Demand for Mortgages
In 2020, the mortgage interest rate was 2.66%. That figure increased by 0.15% to reach 2.75% in 2021. While that rate is still lower than the previous years, financial experts predict it will increase in 2022, impacting slight damp in demand for new mortgages.
Diminishing Land Supply
The National Association of Home Builders recently established that the supply of developed lots is rapidly declining. NAHB says that is a problem many homebuilders will grapple with over the coming years.
Increasing Property Value
Many constructions and real estate property experts are optimistic that house prices will remain high in 2022 and beyond. Researchers predict the annual home value growth will increase by significant margins in 2022 if the conditions stay as they are.
While there are several considerations for building a home, the decision mainly comes down to your preparedness. Nevertheless, the expected reductions in construction costs, growth in property value, and diminishing land supply suggest 2022 is the best year to build a home.