In 2020, we spent more time in our homes than ever before. This provided plenty of opportunities for us to become well-acquainted with every inch of our current abodes and aware of every flaw. Now, a new home might seem all the more enticing. But after a year of uncertainty, some hopeful new homeowners aren’t confident that 2021 will be the time to make a move. In reality, there’s actually no better time than the present to build a custom home, even if you aren’t fed up with your current place.
We enter the new year in the midst of a hot seller’s market, thanks to a combination of high demand and low inventory. At first, a “seller’s market” may not sound like the best environment for moving into a new home. After all, the term makes it sounds like you could end up paying more yourself. But it’s this exact situation that makes building a custom home so ideal. If you own a home, you are more likely to sell it quicker and receive a higher asking price this year.
Countless homeowners nationwide have already taken advantage of this ideal environment. Just last month, home sales hit a 14-year high. With these reported trends, we’re not the only ones that believe 2021 is the year of the move. In fact, Zillow is predicting that nearly 7 million existing homes will be sold this year alone. If their forecast becomes a reality, 2021 would have the most home sales in one year since 2005. And, that would lead to the largest one-year increase since the early 1980s.
We know it takes more than a crystal ball or a handful of statistical predictions to make a market this hot. One of the more obvious contributing factors? Mortgage rates remain at an all-time low. Meeting the high demand for new homes, mortgage rates continue to hold and hover between 2 – 3%. According to Freddie Mac’s Primary Mortgage Market Survey, these numbers are the lowest since it began conducting the survey in 1971.
With more sales at higher prices, current homeowners are well positioned for taking on a custom home building project of their own. But where is the increasingly high demand for housing coming from? Those thinking about selling today are likely to see their homes on the market 14 days less than a year ago. Realtor.com notes that with Gen-Zers and Millennials looking to purchase their first home or trade-up into their second, there are plenty of potential motivated buyers ready to make a competitive offer. Based on these facts, it’s likely that there are more people in the market for your existing home right now.
This high demand, even from other generations, is growing nationwide. Not only are more homes selling, they’re selling faster. And, when they did sell, sellers received a higher-than-asking-price offer. But just because the average home price might be higher, your current home might not be too pricey for a large pool of potential buyers. In fact, thanks to historically low mortgage rates, homes have never been more affordable. This trend is expected to continue throughout 2021. Together, experts predict that new single-family home construction will increase 9% this year and home sales will be up 7% from last year. Knowing you can sell your home fast and at a higher price point, gives sellers of existing homes willing to capture this momentum a unique advantage with more buying power to build their forever home.
With the increase in interested potential buyers equipped with low mortgage rates, it’s no wonder that there is a low inventory of homes, which only adds to the competition. This is why we encourage you to act now. Not only should you aim to sell your home while the housing market is so hot, you should get started soon to avoid added costs in the home building process. If you get your home on the market now, you can get the most out of your existing home investment before the cost of materials rises much further for your new to be built house. According to NAHB Chief Economist Robert Dietz, “Lumber prices are now up more than 170% since mid-April, adding more than $16,000 to the price of a typical new single-family home.”
If you’re considering selling your home to capitalize on the current seller’s market, you’re naturally also thinking about buying a new home as well. But you’re probably not thinking about it the same way you would have a year ago. That’s why anyone selling in 2021 may want to think differently about their next home purchase. Is a traditional open floor plan right for you? Does your once in a while temporary office need to find a more permanent place? Are you willing to trade a grand entry way for more places to store and organize?
To be one of the lucky sellers-turned-builders, check out our recent post on how to impress potential homebuyers here. Then contact us to get your custom home building project started.
Schumacher Homes, based in Canton, Ohio, is America’s largest custom homebuilder, with operations in 32 markets in 12 states across the country. The National Housing Quality award winning company has built over 19,000 homes, customized to fit each family’s lifestyle, since its founding by Paul Schumacher in 1992. Schumacher Homes takes each customer’s inspiration and gives it a home. Each Schumacher Homes location includes a one-stop shopping design studio and showcase homes displaying the latest in architectural and product trends. Stop in today, be inspired and receive your no obligation price quote.