Last week in our Blog Room we posted a very informative article on some factors that were causing the extremely high home prices (in addition to high interest rates). This week we discuss several measures that should greatly improve home price conditions in the next few years.

By and large the biggest measure is the ROAD to Housing Act that Congress just passed. While it is complicated and contains many provisions and is taking a while to sort through the act, the over-riding goals are to reduce regulatory and environmental costs, reduce building costs, and to greatly improve home production – as the lack of available housing is the biggest factor driving up home prices.

Some of the Key Provisions were:

  • A slew of financing, permitting, zoning and environmental reforms aimed at lowering costs and speeding up home construction.
  • A ban on large, institutional investors from buying single homes. Some of these investors were buying up entire blocks of homes and then renting them out.
  • Long overdue zoning changes that will make land much more available to build on, and quicken the process to get approval.
  • The bill changed the federal building code to allow manufactured homes to be assembled without a permanent chassis, and relaxed zoning regulations on where they can be sited. By allowing for removable chassis, manufactured home builders can be more innovative in creating many more designs. This will greatly increase the inventory of lower priced housing options.
  • Loosened rules around building Accessory Dwelling Units (ADU’s) – such as granny flats, in-law suites and backyard cottages, along existing structures. This will create more opportunities for manufactured homes and modular homes. ADU’s are very popular and this makes them easier to build.
  • Increased Federal loan limits.
  • Whole-Homes Repairs Act. To attack the aging housing stock issue, the bill created a HUD program that provides grants to state and local governments to help eligible low and moderate – income homeowners and landlords to make needed modifications, repairs and upgrades that improve accessibility, habitability and energy efficiency.

Also, builders are building smaller homes (1,200-2,000 square feet), and putting them on smaller lots. This is meant to compete with existing home prices. In the past, new homes were about 20 % higher than existing homes.

Builders are increasingly paying for permanent mortgage rate buydowns, which lowers the mortgage rates by about 1%.

Finally, builders are offering more and more incentives (the best in over 20 years), such as cutting prices, offering higher end fixtures and finishes at reduced costs, and offering closing costs assistance.  

The state of the housing market is poised to see noticeable improvement in the next few years.

Planning a Move?

As the housing market continues to evolve, more opportunities for buyers and sellers could mean more moves in the years ahead. Whether you’re moving across town or across the country, our residential moving team is here to make the process easier from start to finish. Contact us today for a moving quote and let us help you get moving!