Tri-State housing prices continue to rise along with interest rates
EVANSVILLE, Ind. (WFIE) - Interest rates raised 75 basis points Wednesday as the Fed keeps trying to fight inflation without dropping into a recession.
That’s going to continue putting a strain on the housing market.
Homes are going to continue rising in price and become harder to finance.
With that being said, it may take a toll on first-time home buyers trying to break into the market.
It’s a reality that Contractor Mike Zehner is very familiar with.
“Everyone is still busy. Prices are going up unfortunately, and interest rates are going up unfortunately, but historically, interest rates are still good,” says Zehner.
According to the U.S. Census Bureau, the portion of new homes under $300,000 sold was 38% in 2020, 23% in 2021, and only 11% through July 2022.
Supply isn’t catching up to demand.
Partly, because homebuilders aren’t making as much from these homes with material costs rising.
“It’s hard for us to get a starter home under $300,000. Especially in this subdivision where the lots are $40,000 to $50,000,” says Zehner, “so, we’re more in the mid-300′s, which I understand, that’s a horribly high price for a starter home.”
For now, Zehner says they’re booked up for the time being, but he says the phone has been slowing down.
While he says he’s secure, the future is still a little uncertain.
“We have enough in the hopper that we’re not concerned because historically recessions last 18 to 24 months,” says Zehner, “I think that we’re good through half of that. Beyond that, we don’t know what to anticipate.”
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