First-time homebuyers have been in desperate need of homes, and it looks like homebuilders are finally answering the call.
In the second half of 2018, builders were feeling the strain when mortgage rates went up from 3% to almost 5% – but now that mortgage rates have been low again, first-time homebuyers are feeling like they can enter back into the market.
Builders are looking to add homes that are smaller with lower square footage in order to help curb costs. This shift in home offers is being referred to as the “pivot” – while it can take some time for things to shift in the housing industry, the pivot toward more affordable offerings is happening quickly by home building industry standards.
While builder affordability varies from builder to builder, a majority of these companies have their eyes on first-time homebuyers. Builders are also looking at pushing the construction of townhouses – Chief Economist at the National Association of Home Builders, Robert Dietz, explains, “If we can find a way to zone greater density in communities, townhouses could be a good way to bridge renters into homeownership.
With Generation Z coming of age to enter the housing market, builders will have first-time buyers from two generations – and they’re looking to get into the business.