If you’re looking to make a real estate deal, you’ve certainly noticed the high home prices and mortgage rates. The combination is making it hard for a lot of Americans to afford a home, but builders are working to make that dream a reality.
Jim Tobin is the CEO of the National Association of Home Builders. He tells us the real estate climate is making things tough across the board. “Builders are trying to be as creative as they can to help people get into a home.”
Those aren’t the only obstacles. “Just capital in general for a buyer or a developer right now, it's all very constricted because it just costs so much,” says Tobin. “Home prices are high, number one, but then the interest rates have really been the real killer for people.”
In September, Tobin says some builders started slashing prices and offering perks and incentives to encourage sales. The average discount: 6%.
“There's product out there and builders want to move it.”
Still, even with mortgage rates higher than we’ve seen in decades, Tobin believes buyers can find what they’re looking for. “We never encourage people to put off home ownership. We think it's the gateway to the middle class. It's just something that's important to the fabric of American society.”
As for the costs, there are solutions to the high cost of housing.
“We're going to solve our affordability problem by building our way out of it.”
The hope is that prices and mortgage rates will level off in the coming months, especially as builders keep providing new inventory for house hunters. “We think the second half of this decade, so 2025 through 2030, are going to be a real boon for home building in this country,” Tobin says. “And more importantly, for Americans to get into home ownership.”
If you’re discouraged by the process of finding a house you can afford, Tobin says don’t give up. He advises you to keep looking through all your options until you find your dream home.