{"id":10453,"date":"2024-01-07T07:25:13","date_gmt":"2024-01-07T07:25:13","guid":{"rendered":"https:\/\/imsfund.com\/?p=10453"},"modified":"2024-01-07T07:25:13","modified_gmt":"2024-01-07T07:25:13","slug":"a-real-estate-golden-age-is-coming-for-homebuilders-heres-what-that-means","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2024\/01\/07\/a-real-estate-golden-age-is-coming-for-homebuilders-heres-what-that-means\/","title":{"rendered":"A Real Estate \u201cGolden Age\u201d Is Coming for Homebuilders\u2014Here\u2019s What That Means"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n<button x-on:click=\"open = !open\" class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<p class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/p>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">Things are shaping up for homebuilders. In fact, one big name in the industry is projecting that 2024 will mark the \u201cgolden age\u201d for homebuilding, thanks to falling\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-mortgage\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">mortgage<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0rates and frozen existing home supply, among other factors.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">David O\u2019Reilly, CEO of megalith developer Howard Hughes Corp.,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.youtube.com\/watch?v=xQbbQ7UfrWE&amp;ab_channel=CNBCTelevision\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">told CNBC last week<\/span><\/a><span data-preserver-spaces=\"true\">, \u201cWe\u2019re going to have the golden age of new home construction\u201d in 2024, even calling the new home market \u201cextraordinary\u201d in its current form.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">He\u2019s not wrong: Homebuilding activity has surged in recent months. In November,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/construction\/nrc\/pdf\/newresconst.pdf\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">single-family starts jumped 18%<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0over October.<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1318\" height=\"450\" src=\"https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/fredgraph-66.png?twic=v1\/cover=1318:450\/max=1000\" alt=\"New single-family housing starts\" class=\"wp-image-164133\" srcset=\"https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/fredgraph-66.png?twic=v1\/cover=1318:450\/resize=1318\/max=1000 1318w, https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/fredgraph-66.png?twic=v1\/cover=1318:450\/resize=300\/max=1000 300w, https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/fredgraph-66.png?twic=v1\/cover=1318:450\/resize=1024\/max=1000 1024w, https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/fredgraph-66.png?twic=v1\/cover=1318:450\/resize=768\/max=1000 768w, \" sizes=\"auto, (max-width: 1318px) 100vw, 1318px\" title=\"A Real Estate \u201cGolden Age\u201d Is Coming for Homebuilders\u2014Here\u2019s What That Means 2\"\/><figcaption class=\"wp-element-caption\"><em>New Single-Family Housing Unit Starts (2014-2024) \u2013 <a href=\"https:\/\/fred.stlouisfed.org\/\" data-type=\"link\" data-id=\"https:\/\/fred.stlouisfed.org\/\" target=\"_blank\" rel=\"nofollow noopener\">St. Louis Federal Reserve<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">Starts have now increased steadily for four consecutive months, and experts are predicting further increases in new home construction in the new year.\u00a0<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why Homebuilding Will Surge in 2024<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The National Association of Home Builders projects a\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nahb.org\/news-and-economics\/press-releases\/2023\/12\/single-family-starts-surge-on-falling-interest-rates\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">4% increase in starts<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0across 2024, while Lawrence Yun, chief economist for the National Association of Realtors, is calling for a\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/newsroom\/nar-chief-economist-lawrence-yun-forecasts-existing-home-sales-will-rise-by-15-percent-next-year\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">13.5% increase<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0in new home sales in the new year.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The bump largely boils down to\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/do-transitory-mortgage-rates-exist\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">mortgage rates<\/span><\/a><span data-preserver-spaces=\"true\">, which have fallen quite a bit from their near-8% peak in October. Now at just 6.61%, average rates on 30-year mortgages are at their most affordable point in over six months.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The problem? It\u2019s still not enough to spur existing homeowners to put their homes on the market. According to Zillow, as of July,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/rate-lock-selling-32907\/\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">about 80% of homeowners<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0have an interest rate of 5% or less\u2014so most property owners are not looking to trade in those low rates for today\u2019s much higher ones (unless they absolutely have to). This constrains the supply of existing housing and pushes more buyers toward new construction instead.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">There\u2019s another perk buyers get with new homes, too: builder-offered buydowns. According to NAHB, 29% of homebuilders offered mortgage rate buydowns to buyers in October, and another 21% absorbed financing points for buyers, allowing them to essentially get lower rates completely free of charge.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">O\u2019Reilly told CNBC: \u201cNot only can you pick size, location, but national homebuilders have been able to buy down mortgage rates and offer a lower mortgage rate for buyers.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to O\u2019Reilly, builder buydowns range anywhere from 150 to 200 basis points, essentially letting buyers drop their rates from today\u2019s 6.61% to a rate closer to 5% or below. On a $400,000 loan, that would mean a difference of about $500 in monthly payments.<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">A Continued Upper Hand<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">These aren\u2019t flash-in-the-pan conditions, either. In fact, builders are likely to keep the upper hand as we move through 2024.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">While the\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/federal-reserve-to-lower-rates-six-times-says-ing-economics\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Federal Reserve is largely expected to cut rates next year<\/span><\/a><span data-preserver-spaces=\"true\">\u2014meaning mortgage rates will likely follow suit\u2014most experts don\u2019t expect rates to drop by any drastic amount. The Mortgage Bankers Association (MBA) currently predicts an average 30-year rate of 6.1% by year\u2019s end, while Fannie Mae sees a 6.5% average at the close of 2024.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Even at the MBA\u2019s more optimistic number, most existing homeowners would remain locked into their current low mortgage rates, squeezing existing housing supply and pushing buyers toward new construction\u2014and the potentially lower rates they can offer.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">As O\u2018Reilly puts it: \u201cThat supply-demand imbalance [in the existing home market] should get worse into 2024, driving demand for new home construction.\u201d<\/span><\/p>\n<div id=\"visibility-group-block_64dd56548a48e\" class=\"visibility-group  hidden\">\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Funding<\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Quickly find and compare investor-friendly lenders who specialize in your unique investing strategy. It\u2019s fast, free, and easier than ever!<\/p>\n<p><\/main>\n<\/div>\n<div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n<img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md hidden lg:block\" src=\"https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Lender-Match.png\" alt=\"find a lender with lender match\" title=\"A Real Estate \u201cGolden Age\u201d Is Coming for Homebuilders\u2014Here\u2019s What That Means 3\"\/>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"wp-block-group is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group__inner-container\">\n<div class=\"wp-block-group__inner-container\">\n<div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n<p><\/main>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/homebuilders-will-enter-a-golden-age-in-2024\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article Things are shaping up for homebuilders. In fact, one big name in the industry is projecting that 2024 will mark the \u201cgolden age\u201d for homebuilding, thanks to falling\u00a0mortgage\u00a0rates and frozen existing home supply, among other factors. David O\u2019Reilly, CEO of megalith developer Howard Hughes Corp.,\u00a0told CNBC last week, \u201cWe\u2019re going to have [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":10454,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/08\/home-construction-1024x517.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-10453","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=10453"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10453\/revisions"}],"predecessor-version":[{"id":10455,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10453\/revisions\/10455"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/10454"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=10453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=10453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=10453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}