Often when students are asked what their plans are, the response is something along the lines of “go to college, find someone, buy a house, and have some kids.”
However, people are realizing that finding homes, let alone buying them, is becoming exceedingly difficult.
According to the Southern Illinoisan, “Home sales may have their worst year in 30 years. Sales slumped in October and prices continued to climb, as mortgage rates surged last month and inventory remained extraordinarily low.”
Millennials are entering the home-buying age but are often finding themselves without options and income for a down payment.
A local realtor gave her insight into the crisis.
“With inflation being high, and prices for goods and services. There isn’t much extra money for saving for a down payment on a house,” she said.
This volatile market, along with the 30-year fixed-rate mortgage rate climbing to eight percent, and a lack of available homes has created the worst market in several decades according to multiple analysts.
“A lot of people want a three-bedroom and two-bathroom house on three to five acres that are close to town. Those are hard to find and current owners are very reluctant to sell for fear of a lack of replacement,” said the realtor.
Even those who are considering remodeling an existing property or building a house are finding obstacles. The price of materials has risen as well. According to Forbes, the average cost to build a house in Illinois is $265,440 not including land.
However, there are ways to save money when building to create exactly what the consumer wants.
“When determining how much it would cost to build a house, consider the number of bedrooms you want to include. Every additional room in your floor plan will add to the home’s square footage, increasing the total price, “ Forbes said.
Those who are looking to build are finding the cost of materials too high at the moment. So many are looking for other options. English Teacher Stephanie Winkler and her husband recently purchased a modular home after finding out how expensive it would be to build.
“We initially wanted to build a house on our property, but the cost of building materials really skyrocketed during COVID and hasn’t dropped enough yet for us to be able to afford materials and the high-interest rate a mortgage would come with,” Winkler said. “For example, my brother just bought a reasonably priced home, but he is worried that they will have a hard time affording the interest rate on the mortgage.”
Instead, the couple decided to take a different approach and bought a pre-owned home.
“I bought it straight from the individual with cash. It’s a 2007 modular that needs a lot of updates, so the initial price was very low. We will have to spend quite a bit of money fixing it up and updating the fixtures,” said Winkler.
Whether or not the market will come down is up to a lot of factors. Some analysts predict that the economy will dive much like in 2008; others predict that the economy will slowly level out again, but the interest rate is currently discouraging homebuyers of all demographics.
