A custom home is a home that is built to the specifications of the buyer. Basically, the buyer of the home will get to choose every detail when it comes to their new home. Many home buyers shy away from building a custom home due to several myths.

The biggest myth is that a custom home is too expensive. Although this can be true, there are tons of ways to save when building a custom home. You do not need to have a massive budget for a custom build. Another big issue is that many home buyers feel it takes too long to build a new home. Many custom homes are actually built faster than mass-produced homes.

When it comes to custom builders, there are plenty out there and they are easy to find. The best way is through recommendations and searching online. You will want to be sure to ask the builder you have chosen about their experience, process and pricing.

Remember, working with a builder who understands what you want and knows your budget is the key. A good builder will help you find ways to save money through the homebuilding process.

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If you want to own a home but haven’t decided whether to build a house or buy one, there are several things to consider. If you love a custom look with features and finishes that are in your taste, then building a custom home would be for you, but if you like historic charm and an older established neighborhood then purchasing a resale is right for you. If your budget is a factor, what is cheaper: building a home or buying an existing one? The National Association of Home Builders and the US Census Bureau reports that the median cost to purchase a home is $410,600 and is less by $28,800 than building a home.

Pros and cons: Building a house

According to the professionals in the industry a basic home can be built for around $150 per square foot. This is for a basic home, but this price can jump up to over $500 per square foot if you want the best of the best. When you build a home you get to choose what you want such as an eat-in kitchen. A new home also has less long-term expenses than an older home. A new home will be more energy-efficient and will have lower utility bills. There are also less repairs and lower maintenance costs.

On the other hand, a new construction home will take longer to get into. Especially nowadays with labor shortages and shipping difficulties. According to the US Census Bureau it takes around 6-8 months to build a new construction home. You will also have an alternative place to live while your home is being built which is an added expense. Since there is a shortage of home inventory, demand is up and the cost of building is higher. The US Census Bureau reports that new construction home costs have risen $84,700 over the same time last year.

Pros and cons: Buying a house

Most of the time, there are fewer construction costs when purchasing an existing home. The only time this will not be the case is when you purchase a fixer-upper. When you purchase a home, the transaction time is also a lot quicker. This would be the best option if you need to relocate or have a short time frame. If location is important, purchasing an existing home will be much easier than finding a lot to build on.

You do not have to build to get an all-new home. You can opt to purchase a new construction home that is completed and listed for sale. You will still have all new everything without the hassle of building a home yourself.

If you are in the market for a new home, find a local realtor who can help you with your purchase of a newly built home, custom-built home or an existing home. A realtor can help you determine which is best for you and your lifestyle. They can also help you with financing options and refer you to a lender.

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Even with the rising mortgage rates, inflation and the slowing housing market there are benefits to homeownership. The secret is how you gain equity and wealth due to home values rising over time.

“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments,” stated the National Association of Realtors (NAR).

The Federal Housing Finance Agency (FHFA) released data showing the gains over the last five years. Home prices grew around 64% on average across the country during that period.
Meaning, the home’s value can increase a lot during a short time period.

Think that is good? They also revealed that over a thirty-year span home prices went up over 290% (on average)! Even with the price increases coming in different by state and local areas, a homeowner who purchased a home thirty years ago saw their equity triple.

The cooling house market will still see home price appreciation in 2023. If you purchase a home, it will still grow in value over the next year. It will just grow over a slower pace than we have seen the last couple of years.

The cooling market should not detour you from owning a home. Rental prices have also been climbing and there are no benefits to throwing your money away to rent. Home buying is an investment that will set you up for long-term gains. Contact a local real estate agent to start your homeownership journey.

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Living in the Southeast is wonderful with its four seasons. Having all four seasons can be challenging with humidity, moisture, and storms that can wreak havoc on a home’s exterior. Six top builders throughout the Southeast agree that James Hardie® has the solution to the Southeast’s climate and geography.

1. Todd Wilson

Todd Wilson, the owner of Wilson Design & Construction, Inc. in Valdosta, Georgia, shared with Southern Living his low country cottage project. He used Hardie® plank on the home’s exterior walls, Hardie® trim on the exterior casings, column wraps and beam wraps, and Hardie® soffit for the sheets that make up the cornice and porch ceilings. Hardie® is the best material to use on the exterior of homes in the Southeast because of the moisture, humidity, pests, heat and storms. The products can resist the harsh climate over time. He loves using the product because it is architecturally flexible and ascetically pleasing to the eye.

2. Mary-Dolph Simpson

Mary-Dolph Simpson of Simpson Builders, Inc. talks to Southern Living about Simpson’s Coastal Cottage build in Bay Creek, Virginia. Simpson’s custom builds are all located close to the Atlantic Ocean and the Chesapeake Bay. James Hardie® excels in making exterior siding and products that can replicate natural materials used to build here in the past, such as wood. Their products withstand our coastal Virginia environment and ensure that we can warranty the exterior envelope of a custom home.”

3. Chris Hoffman

Chris Hoffman with Southern Cottage Corporation in Davidson, North Carolina has a perfect example Hardie® siding on their Modern Cottage. The custom-build features Hardie® Plank Select Cedarmills siding along with Hardie’s Artisan Shiplap. “We also showcased classic mitered outside corners using a unique install method from James Hardie®. Busy families appreciate these high-quality, low-maintenance exteriors,” says Hoffman.

4. Chris Brooks

“We chose this product for its durability, ease of installation, overall curb appeal, and to carry out the architect’s vision in keeping with the historic nature of the surrounding area. The size and finish options available work well in the hot, humid climates where we build,” Brooks explains. Chris Brooks owns Structures by Chris Brooks in Moultrie, Georgia.

5. Mike Stevens

Mike Stevens Homes in Knoxville, Tennessee shares his Hardie® example with Southern Living. ” Our client for this build was a busy neurosurgeon who wanted a log maintenance home. We wanted to make a bold statement with the exterior color and this siding was perfect-it stands out against the natural backdrop yet blends in with the existing streetscape. We had lots of rain and red clay mud during the build; the protective film on James Hardie’s ColorPlus Technology finishes helped us overcome this challenge,” reveals Stevens.

6. Jamison Howard

Howard shares about a home in Awendaw, South Carolina that his company Max Crosby Construction built. The coastal environment is harsh on everything with the salty air and extreme weather patterns. It is critical to choose the right exterior building materials that will withstand hurricanes. Hardie® siding and materials are perfect for this environment. Hardie® is known for their durability in coastal areas as their products can endure extreme temperature swings.

If you are planning to have a home built, then choose Hardie® products to ensure your dream home is built with the top product.

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The overall building material prices are down from summer prices except for the prices of ready-mix concrete.  In fact, the price for ready-mix concrete is rapidly rising.  The largest decline seen was in softwood lumber and steel mill prices.  Gypsum prices are still high over 20% from the same time last year.
Prices of building materials saw a 0.3% decrease in September according to the Producer Price Index (PPI). There was also a decline in the PPI for goods input to residential construction (including energy) for the third consecutive month in September.
Gypsum, which is used in drywall, is also an ingredient used in ready-mix concrete.  High demand for cement combined with lower imports of aggregate due to a large quarry shutdown in Mexico have spread thin the supply of domestically produced ready-mix concrete as well as gypsum.   Even though single-family house building is has slowed a little, the concrete prices are still rising because it is used for many other applications outside of residential construction. Ready-mix saw a PPI increase of 1.4% this fall which marks the sixth consecutive increase.  This is the largest year-to-date increase in the index’s 34 year history.
Softwood lumber’s  PPI declined 2.9% this fall but the prices are still 14.5% higher than a year ago.  Steel Mill products saw a decrease of 6.7% this fall and have dropped 16.1% over the past four months.  In fact, the index is the lowest it has been since June 2021 which is still double the price that the steel mill was before COVID-19.

Home prices have decreased since last June 2021 2.3% which was reported to be the largest three-month drop since April 2020.  The small decline has happened during high prices on material though.  In the South there is a 2.6% increase, a 0.7% decrease in the Northeast, a 0.3% increase in the West and prices stayed the same in the Midwest.

According to the Federal Reserve Bank of Kansas City single-family home construction is in store for a bright future.  A new study found that the years of underbuilding will come to an end.  This has left us in a deficit estimated at more than one million homes according to the National Association of Home Builders.The ceiling of this covered front porch is made of beam boards. The front porch swing is a perfect place to rock the evening away.
Jordan Rappaport, a senior economist at the Federal Reserve Bank of Kansas City, points out several points that align with the NAHB’s Home Building Geography Index data.  The key findings are on commute times, telework and home construction.  Those that work in a large metropolitan area, say that the largest concern about the suburbs is the commute.  The benefit is hybrid working which reduces commute time and expense.
The reduction in commuting  will encourage more single-family permits but it will be a slow increase.  There are many headwinds that the National Association of Home Builders have reported that will prevent a quick boost in permits.  For example, when single-family construction begins to rebound, supply constraints are likely to slow its climb to its predicted long-term rate.  Moreover, shortages of workers, construction materials, and ready-to-build lots are all likely to constrain the growth of single-family construction in the short term.
Even with push back, the jump in construction of single-family homes will provide a long-term growth period for home building.  Once the single-family home construction begins to ramp up, it is predicted to remain high for years to come.

According to the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) we are seeing a change in the locations of single-family home builds. The building activity in the last 30 months shows a decrease in building in metro areas, largely due to COVID, housing affordability and highly regulated markets.

“The geography of home building has shifted over the last two and a half years, with more single-family and multifamily construction occurring in lower-density markets.  This shift was first caused by the initial impact of COVID shift continued in recent months due to housing affordability conditions that are causing both prospective renters and buyers to expand their geographic search for housing, aided by hybrid work patterns that allow for a combination of remote office work,” said NAHB Chief Economist Robert Dietz.

Another wrench in the system is the problem with getting building materials, construction labor shortages and and the Federal Reserve’s stingent monetary policy.  “Looking at the last 12 months, single-family production has slowed in all regional submarkets, both large and small, due to ongoing building material production bottlenecks, construction labor shortages, and the Federal Reserve’s tigtening monetary policy,” said NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Georgia.

The National Association of Home Builders Home Buidling Geography Index (HGBI)  is a quartley measurement of building conditions across the country and uses county-level information about single-and-multifamily permits to gauge housing construction growth in various urban and rural geographies.  The National Association of Home Builders tracks single-family and multifamily grow rates and market shares in all seven regions of the U.S. The HGBI takes the place of the of the Leading Market Index (LMI).  The LMI would base their findings off single-family housing permits, employment, and home prices.

Currently it is report that the market share for single-family home builiding in large metro core and inner suburbs too a dive from 44.5% to 41.6% from the fourth quarter of 2019 to the second quarter of 2022.  This shows the precovid vs postcovid figures, accounting for the results due to COVID. In the outer suburbs of large and medium metro areas has jumped up from 17.4% to 19% during the same time period as the decrease in the larger areas. The share also increased from 28.8% to 29% in the small metro core counties and in rural areas it rose from 9.4% to 10.4% This is mainly due to homebuyers wanting to move away from the dense areas during COVID.

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Preapproval for a home mortgage can be confusing, especially if you are a first-time homebuyer.  Many homebuyers want to know if they are preapproval ready.  In order to know, here are some things that lenders look for when preapproving someone for a home loan.

Mortgage pre-approval is not a mortgage pre-qualification.  A preapproval is more in-depth than just answering a few questions from your lender.  There is a lot of paperwork involved which includes employment verification, checking records, savings records and investment records.  Lenders nationwide will like for the same elements when pre-approving for a loan. These include a minimum of two-year employment history in the same job or field, a credit score of 620 or higher, a savings track record, financial asses records, proof of down payment  (3% to 20% of home price), and an all-in debt to income ratio fo 43% or less.  The majority of lenders nationwide will not charge for a pre-approval, however, there are some out there that will ask for reimbursement to pull your credit report.

Your job and credit history play a big part in the pre-approval process.  The two year employment rule is very strict.  If you are a current graduate and can prove future income from your employer this will suffice, but if you change from W-2 pay stubs to self-employment this is a no go.

A credit score of at least 620 is also the rule of thumb.  Before you go to a lender to get pre-approved, you can check your credit score for free through the credit unions.  In today’s market, the loan approval for credit scores is every strict.  For a mortgage, the middle score is what counts and is derived from all three of the provideers, TransUnion, Equifax, and Experian.  If you and your partner are purchasing the home together, the worst middle score of the two will be used to determine preapproval.

Another important factor is your assests and downpayments.  “The ability to budget and save shows financial discipline,” says Staci Titsworth, a regional manager for PNC Mortgage in Pittsburgh.  If you received a big bonus, or an intertance, the lender will also have to show the underwriter where the money came from and that it is not borrowed.  Lenders know that life is not perfect and there will be bumps in the road.  Examples include job loss, job changes, and unexpected expenses.  For many of these reasons, people have to dip into their savings to cover these unexpected expenses. In a nutshell you want to be able to have enough info for the lender to explain to the underwriter your financial ability to repay a loan.

Your debt and income ratio is also very important aspect of the process. Lenders desire to see a debt-to-income rati of 43% or less.  If you make $10,000 a month gross before takes, and $4,300 of it goes towards your debt you are okay. This needs to include you future house payment, monthly property taxes and homeowners’ insurance. There is some room to negotiate when it comes to this. Let’s say your DTI is 46% but you have a great credit score and 5% in the bank for a downpayment.  More than likely most lenders would approve you.

Starting the process early is a good idea in case you need to work on some areas to help with your credit, this will give you time to do so.  If you are going to purchase within the next year, then you will want to start looking at getting preapproved now. Note that preapprovals usually are only valid for 60 to 90 days but can be extended if you keep updating with your current financial situation.

If you are in the market to purchase a home, remember to use both a real estate agent and a lender who can help you with all your homebuying needs.  Going to see a home with a preapproval in hand will show that you are a serious buyer.

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What caused the slow down in mortgage rates in August 2022?

The drop in mortgage rates during the period ending on August 18, 2022 was due to the ease in inflation concerns.

According to Freddie Mac the mortgage rates have dropped due to the ease in inflation conerns. For the weekly period that ended August 18th, the 30-year fixed-rate mortgage came it at 5.13% which was a decline of 9 basis points.

Good news as this stops the 23 basis points jump that occured just one week prior. This year has seen rates have change rapidly and unpredictably. Since April, the 30-year rates have gone between 4399% and 5.81%. This is up from just a year ago when the 30-year average was 2.86%.

The rate drop also was seen through the average 15-year fixed rate. Currently it dropped to 4.55% from 4.59%. A year ago, the average for the 15-year fixed-rate was 2.16%. In fact, the average of the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell 4 basis points to 4.39% from 4.43% week over week. At the same time last year, the 5-year ARM sat at 2.43%.  The catalyst to the decrease was due to the inflation not rising so much in July as economist predicted according to the Consumer Price Index.

“While both consumer and producer prices showed increases in July, the rate of increase slowed substantially,” said Paul Thomas, vice president of capital markets at Zillow, in a research statement.

“Inflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates that the housing market was experiencing earlier this year,” Freddie Mac Chief Economist Sam Khater said in a press release.

“The market continues to absorb the cumulative impact of the large price and rate increases that led to a plunge in affordability,” Khater said, noting current levels are unlikely to change substantially.

“As a result, over the rest of the year purchase demand likely will continue to drag, supply will modestly increase and home price growth will decelerate,” he said.

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What is a Property Setback?

A property setback is the distance required between your house and your property line.

It is very important to understand what a property setback and how it can affect the home building process. This article will establish all you need to know about property setbacks.

What is a property setback?

A property setback is the distance required between your house and your property line. There are many things that will define the setbacks on your property such as the type of building, the property’s shape, the reason you are using the lot, its height and its size.

“Property setbacks are the building and land use restrictions placed on parcels of property long before you bought it,” says Mike Powell, an engineer and certified home inspector in Tampa, FL. “These setbacks are put in place by city engineers when designing the parcels and common elements needed to subdivide the larger piece of land into smaller, more divisible units.”

Why setbacks are important

Setbacks are great for a homeowner and their neighbors allowing all parties to live comfortably. Setbacks can give ample space to replace or repair utilities and allow for first responders to have enough acess for emergencies. Other advantages are natural lighting, venilation, noise pollution and improved aesthetics.

“Setbacks ensure the functionality of the residence,” says Greg Covell, a Realtor with Re/Max Select Realty in Vancouver, British Columbia.

How to find out your home’s setbacks

This is crucial when it comes to purchasing a piece of property to build on. Before you put in an offer, find out what the governing setbacks are for the property. Do your due diligence by contacting your town orr municipality or your local planning department.

“I had a sale pending the zoning approval of placing a barn outside the setback lines,” Denise Supplee, a real estate agent and founder of SparkRental.com says. “The zoning board gave a big no, and the property deal ended without a sale.”

Can a homeowner challenge setbacks?

Setbacks are not supposed to be a burden but rather a benefit for the community. These rules and regulations allow everyone to live comfortably with privacy. There are exepctions to the rules when it comes to setbacks. A homeowner can request an exception but it will more than likely involve a public hearing where neighbors can support it or oppose it.

“Obviously, engineers are incapable of fully anticipating future use, so setbacks may change over time,” says Powell. “For instance, a railroad line that has been abandoned for over 40 years may have been given a setback. The municipality may allow a variance to allow construction of your shed in the former setback location.”

What happens if you build on a property setback?

Just like any other law or ordinance it is against the law to ingore them. A homeowner that builds a structure on a setback will result in removing the structure at the homeowner’s expense.

“If it happens to be a fence or a light structure, it may not be a huge problem,” Powell says. “If that building happens to be a reinforced concrete structure, the owner will have to swallow the expense of demolition and likely face additional fees or fines.”

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