Bad News For The 2025 Housing Market

  • 2 min read

Interest rates have spiked upwards of 7% and home prices have gone up with it. With inflation, price increases, supply chain problems, and materials increases, buyers can’t afford the selling prices of new construction homes anymore. How are builders responding to this? They’re halting construction for new single-family homes, according to an article by the Associated Press.

Builders are in a position where they’re not sure if these houses will ever sell. They’re citing high prices, high-interest rates, and the fact that many people are already canceling their new home contracts because of cost. So why keep building houses if they won’t be sold? If you’re a homebuyer, you might think that’s a good thing, but maybe not. 

If you’re a homebuyer, building fewer houses won’t make your next home any cheaper. The costs to build the home are still the same. Even if you’re looking for a resale home, having newer new homes on the market won’t get you a better deal because there are still fewer homes on the market. If that extends further into 2023, it will have an impact on the availability of homes for the next few years.

So, fewer homes are being built, even though there’s already a shortage of homes on the market. If this shortage is set up to continue, homebuyers will continue to face pricing and availability challenges, among others. 

Over the last 10 years, there has never been a time when there are too many houses for sale. There’s always a housing shortage, even now when there are fewer buyers and sellers out there. There may be more houses for sale, but it’s still not enough. Many of the homes on the market are resale homes requiring a multitude of maintenance before they’re in living condition. Homeowners who have owned their homes for a while aren’t going anywhere either because the interest rates are too high to risk it. They’re better off staying where they’re at until the rates decrease.

What do you think about builders stopping the construction of new single-family homes? Do you think it’s a good thing or a bad thing? Let us know in the comments. 

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