Editors Note: Our blog will not be published during the week between Christmas and New Year’s Day so that our staff may enjoy that time with their families. Be assured we will be keeping abreast of the housing market and will be back on January 2, 2018. Happy Holidays from all of us at LoanLogics.
The Builder’s Housing Market Index which measures builder sentiment toward the new home market has never been better. Fa la la la la…
All 3 components measured showed gains in December:
- Buyer traffic jumped 8 points
- Current sales conditions were up 4 points
- Sales expectations up 3 points.
According to NAHB Chief Economist Robert Dietz, “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”
That is all good news for builders, buyers, lenders, and the economy. The challenge for builders now is to find the land and workers to get additional homes to market more quickly. This will help to offset the present shortage of existing homes for sale.
- Are you prepared for lending to new construction buyers?
- Do you have staff trained to handle the little nuances of this type lending?
- How about the products and services needed to get these loans across the finish line?
Don’t miss this opportunity to increase business in 2018. Be prepared to handle new construction lending and to service the special needs of these buyers and builders. Many will be Millennials who want instant information, access, approvals, and closings; all done online.
Consumer education will play an important role in closing new construction loans. Due to the time involved in building the home, in many cases borrower information must be updated prior to closing. This creates more work and the potential for changes that may adversely affect an approval.
Be sure to instruct your borrowers of the importance of communicating with you prior to making any changes or upgrades that will increase the home’s price or major purchases which may adversely affect their debt ratio.
Builder sentiment is on the rise and their future is looking bright. How about yours?