Why New Construction is a Good Investment Now
By Nikki Giordano, CEO of AHBA
Despite the news headlines, individuals continue to buy and sell homes. According to an National Association of Home Builders analysis, in May 2022, 88% of homes sold were on the market for less than a month. In Anchorage homes are still selling fast. In May, the average Days on Market for new listings was 10.
After enjoying historically-low mortgage rates, 2022 saw some fluctuation. The Federal Reserve doesn’t set mortgage rates, but it does impact them along with inflation, employment numbers, economic growth and more. Following its July 2022 meeting, the Federal Reserve announced an increase of 0.75% to its federal funds rate. However, that same week long-term mortgage rates came down 0.25%. This means that homeowners looking to buy right now will have a lower rate.
With new construction you don’t have to make your life fit into a home, you build a home to fit your lifestyle. For many Alaskans, owning a new construction home is worth the time and investment. The benefits of buying a new construction home are numerous. When purchasing new, depending on your budget and timeline, you are working with the builder to either design a floor plan to fit your lifestyle, or working within an existing footprint to customize a design to accommodate your needs or choosing the finishes to make it a home. This gives you much more flexibility and increases the likelihood that your new home will work for your family in the ways that are important to you.
From wide open layouts to finishes you love, the options are nearly limitless. Homes today are designed to accommodate a variety of lifestyles, from busy on-the-go families to flexible spaces ideal for spending more time at home. In addition, many new homes feature a variety of floor plans and amenities to complement everyday family activities, like a tech room, office, workout space, third-car garage, theater room, play area and more.
Energy efficiency is even more important to Alaskans than ever before. With warmer summers and the cold winters we are used to, having a home that is built with innovative materials and construction techniques to keep your home warm in the winter and cool in the summer is essential. Aging homes weren’t built to these standards and simply can’t compete. As a result, not only can they be more affordable to operate, but new homes also are significantly more resource-efficient and environmentally friendly.
Building standards have changed a great deal over the decades, almost as fast as technology has evolved. Due to this evolution, new homes can accommodate today’s advanced technology and be customized to meet the individual home owner’s needs. Buying new construction and working with an AHBA Member, gives you peace of mind that the house was built by a qualified professional to adhere to the latest safety codes.
There are many other benefits that are not tangible but still very valuable. For example, one of the built-in benefits of many new homes is the forming of a new neighborhood. When families move into a new community at the same time, lasting bonds of friendship and neighborliness often form right away. And when you are the first one in a new neighborhood you have the ability to set the tone, creating block parties and community traditions.
For many people, a home is the single best long-term investment and a primary source of wealth and financial security. The contrast of wealth-building opportunities between homeowners and renters is striking. On average, someone who owns their home has a household wealth of $255,000 compared to a renter with an average household wealth of $6,300. Alaskans count on their homes for their children’s education, retirement and overall personal sense of well-being.
For more information on the benefits of a new home and home builders in our community, contact the Anchorage Home Builders Association at www.ahba.net or call 907-522-3605.
