The increase in housing demands has created numerous opportunities for homebuilders, but at the same time, the labor shortage and global supply chain shutdowns due to the pandemic has made these opportunities hard to come by.
LendingTree analyzed the changes of homebuilding-related variables from 2019 to 2021 by region and discovered an increase of 47% in stalled construction projects, despite the growing demands for new homes.
These stalled projects are largely due to an increase in raw materials (cement, steel and lumber) and labor costs as most factories were shut down due to the pandemic. Also, with unemployment under 4%, construction companies are having a hard time finding enough employees to meet their demand.
However, it’s essential to note that these delays will not go on for long as the housing demand continues to increase, and homebuilders will have plenty of opportunities to sell their finished properties after they secure the necessary materials and labor.
Homebuying Tips to Share with Your Clients
The market is, without a doubt, a pricy one for homebuyers. First-time buyers will have a lot of questions and concerns before purchasing their dream homes. One way to prove yourself as a credible real estate agent and win their business is to provide guidance on the best ways to secure the loans they need to get their home. Here are some tips to consider:
- Shop around for mortgage rates: Mortgage rates are not one-size-fits-all, so you shouldn’t settle with the first “good” mortgage rates available. Encourage your clients to do their research, shop around, and apply to various lenders for more options. Better yet, do the research for them and present the many options during your pitch meeting.
- Consider different types of mortgages: Borrowers who struggle to find the funds or secure the credit score needed for a traditional mortgage may find a few other options for loans. For example, some may be able to turn to the Federal Housing Administration (FHA). Depending on where the borrower wants to buy a home, the U.S. Department of Agriculture loan may also be an option.
- Change the location: Most people tend to focus on one specific area when they are on the hunt for a new home. As a real estate agent, you can advise your clients to explore different areas and markets that they might not have considered. For example, homes listed on the U.S. Department of Housing and Urban Development’s websites are often cheaper than specific properties in the area. Those who can work remotely may also explore potential areas further from their metropolitan area.
Enhance Your Training with McKissock
Armed with this information about what causes the delay in new homes and strategies buyers can use to find their dream homes, you can help your clients succeed in their real estate goals.
If you want to take your business even further, McKissock has the classes and training opportunities you need to thrive as a professional. Get started today.