Even before this year's hurricane season started, Americans were already feeling the effects of diminishing home affordability. Last year's devastating hurricanes, Harvey, Irma, and Maria added an estimated 282 billion dollars of added material and labor demands to an already stretched thin housing sector. With Hurricane Florence, and perhaps other storms yet to run their course this hurricane season, the U.S housing market will once again become burdened with additional supply and labor demands resulting from disasters, all working against affordable housing. Housing and Hurricane Florence.
The questions to ask is, has affordable housing, compounded by rising taxes, interest rates, and expensive natural disasters become increasingly part of history's "Rear View" mirror?
I believe the answer, in short, is yes and here's why.
1. Immigration is at record-breaking levels. This favors growing housing demand.
2. Land costs, depending upon proximity to major metropolitan areas are rising, and in some cases sharply.
3. Rents are expensive, and offers only a short-term housing solution and may delay eventual home ownership well into retirement years.
4. The potential imposition of Import tariffs on foreign-made goods will increase material costs but with the extended future benefit of increasing domestic manufacturing, keeping more of our spendable dollars inside the U.S. economy.
5. Record-breaking natural disasters continue to strain supply chains for both building materials and labor, driving up construction costs.
Today's home buyer has to quickly reconcile trend factors which all point to higher future housing costs and decide how to either create a savings plan to compensate for their loss in lifetime home equity savings or embrace the housing market to lock-in today's housing cost. Homeownership creates savings by both paying off the fixed loan balance and in the future home equity appreciation gains realized over the life of your home mortgage.
Mike Askins, Realtor, Owner ARG
Got questions for Realtor Mike? Call me at 214-727-3686 (mobile)