June 29, 2021
Let’s start with the fact that interest rates are at an all-time low. As of May 2021, the average 30-year fixed mortgage has an interest rate of around 3.00%. Compare that to May 2018 when rates were around 4.75% and May 2020 when rates were still around 4.00%.
This is the lowest interest rates have ever been. It’s a great time to take advantage of those low rates and keep your interest payments low over the course of your mortgage. And the lower cost of interest off-sets the increased prices of some building materials!
There’s also a shortage of houses on the market. With the market trending the way it has, it’s also been a great time to sell your home for top dollar. People are buying and selling existing homes, and there are now only around 300 homes available in the Des Moines area. With such limited options, it’s a great time to build new to get exactly what you want in the neighborhood you want. There’s no competition to buy it, and no back-and-forth offers. You find your builder, find your lot, and lock it down.
The value of homes is also increasing each year. It is expected that home equities will rise 10.00% in 2021! That’s huge. Building a new custom home, then, means you’ll be earning equity as soon as your home is built! And if this trend continues, an increase in material costs (like lumber) won’t even compare to the equity you will be gaining. Even if rates decrease to 5.00-6.00% equity, which is more of a typical increase in home value, you will get more money out of your home than the increased cost of building materials in just a few years!
I touched on all of this with our friend Sam Yoder, a local Des Moines real estate agent and lender, recently. Check it out to learn more and start taking advantage of these rates! And if you have any questions, don’t hesitate to reach out to our team at 515-800-2148!
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