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Homeownership

Demand for newly built homes soars, but so is the cost of lumber

[HOMEOWNERSHIP] Many potential buyers are looking for newly built homes, but will builders be able to meet this demand with lumber prices on the rise?

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COVID-19 has had an undeniable effect on the U.S. economy. In the housing market, increased interest in single-family, new-construction homes has given builders a bright spot in the crisis. Builder confidence in this market has now reached a 35-year high, but builders are not out of the woods yet.

Potential homebuyers are showing up in hoards (figuratively speaking, we hope) this fall with a keen interest in new-construction homes. Buyers looking to take advantage of record-low interest rates are knocking on model home doors, seeking improved living arrangements with more space and functionality. The market sentiment for single-family homes is positive, but rising lumber prices are tempering home builders’ excitement for booming business.

Many white-collar workers are staring down an indefinite stretch of remote working arrangements, with some large tech companies even considering making the change to remote work permanent. The COVID-19 pandemic has forced workers to make big shifts in their everyday life. These lifestyles changes, along with low interest rates, have prompted a new wave of homebuyers.

Unfortunately for builders, the pandemic has had a much harder impact on blue-collar workers and a negative impact on supply and demand. While office workers sit on their couches and open up their laptops to Zillow, places like lumber mills and factories had no choice but to shut down during the height (if that is even past us) of the pandemic.

Many lumber mills and factories remain closed or are dealing with severe labor shortages as these blue-collar workers are disproportionately affected by the pandemic and access to adequate health care.

Prior to shutdowns, the market was not expecting this type of boom in new-construction interest from homebuyers. Builders are now seeing lumber prices rise as a result of increased demand and dwindling supplies.

Mortgage rates hit record lows in early August, and while those have risen somewhat since then, it is unlikely that rates will skyrocket anytime soon. With no end to the pandemic in sight for the U.S., potential homebuyers will keep coming and builders will just have to deal with the premium on lumber for the foreseeable future.

Staff Writer, Natalie Gonzalez earned her B.A. in English and a Creative Writing Certificate from the University of Texas at Austin. She is a writer and social media nerd with a passion for building online communities.

Homeownership

The split realities of renters vs. homeowners

(HOMEOWNERSHIP) The housing market is telling a tale of two countries: Between renters and homeowners, wealth inequality has split the country in two.

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The pandemic has generated a tidal wave of house hunters attempting to relocate; previously ignored markets all across the country, particularly in suburban areas, are awash with new clients eagerly seeking an escape from expensive and densely populated cities. Record low mortgage interest rates in the US have only bolstered this migration scramble. The ultra-wealthy are even opting to leave the US entirely, fleeing to regions with fewer cases, such as New Zealand.

Renters, on the other hand, generally don’t have the luxury of being able to afford a house. Most are currently trapped between a rock and a hard place (proverbially speaking).

The extra unemployment assistance granted by the CARES Act, which was helping countless Americans pay rent, expired two weeks ago alongside the federal eviction moratorium. State and local moratoriums on evictions are also withering away. Young adults have holed up with their parents where they can (myself included). Meanwhile, the Senate continues to deliberate on the details of the HEROES Act, which – hopefully – will extend the $600 weekly unemployment bonus, and provide more stimulus checks to people in need.

As renters face destitution, landlords have in turn seen their incomes dry up. Twitter is rich with specific examples of threats and harassment received by tenants from their landlords for failure to pay rent, despite the unemployment crisis, and the cutthroat job competition it’s created. In all fairness, though, small landlords are themselves facing similar heat from their banks. One survey of landlords in Massachusetts, performed by MassLandlords, showed that one-fifth did not know how they would make ends meet this year – clearly a ripple effect from this preventable rental crisis.

The role of demographics here is important to note, as is often the case when housing is concerned. Of course, Millennials have been mostly relegated to renting for a long time. It’s been a meme among my generation for the better part of a decade that very few Millennials will ever end up buying homes, and Gen Z is on a fast track to join us. Not to mention that the historical impact of redlining, which extends several decades, has yet to be reconciled. It can still be seen in the national rates of homeownership which are disproportionately low among non-white, and particularly Black, Americans.

If youth, people of color, and impoverished renters are about to face mass nationwide evictions, the HEROES Act is their best shot at a miracle. But if it fails… then, I guess, Congress will ask that they eat cake.

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Homeownership

Hilarious things that are left behind when people move out of their house

(HOMEOWNERSHIP) People often forget what changes and additions they’ve made to a house until it is too late. This Twitter thread is a hilarious reminder to take everything with you when you leave.

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There are moments when social media brings people together and gives us comedy gold. Have you ever left something behind when you moved, something that while maybe not so crucially important to you, will definitely offer an interesting insight into your life? Such as a message written behind a wall, or a note hidden in an air duct? Well a twitter thread posted earlier this week opened up Pandora’s box for amusements on this topic and some of these are just getting stranger and stranger.

The original poster, @KaylaKumari, brought it up originally when she asked her mother, who had just recently moved out of her last home, if she’d uninstalled the special fire alarms that she recorded in her voice yelling, “GET OUT OF THE HOUSE BECAUSE MOM’S CANDLES CAUGHT THE HOUSE ON FIRE”. A perfect line, short and succinct. Now some poor family is going to have a fire and some woman’s voice will be ushering them out instead of an alarm. Hopefully there won’t be too much confusion there.

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My parents sold their house like a month ago but my mother JUST realized she did not uninstall the special fire alarms she had put in that are a recording of her own voice screaming at me and my sister to “GET OUT OF THE HOUSE BECAUSE MOM’S CANDLES CAUGHT THE HOUSE ON FIRE”

After that, the tweets and retweets just kept coming. Some of them mostly relating to habits or forgotten moments. In four days, the post has gotten over 17K retweets and/or comments and some of these are gems.

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A lot of people seem to enjoy feeding wildlife as well. Lots of fun shocks to go around. I would recommend however, to disclose that upon sale of the house so you don’t get sued. But this just goes to show that social media can be nice sometimes. A nice uplifting moment in our days.

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Homeownership

Start up creates online platform to make building homes easier

(HOMEOWNERSHIP) Atmos wants to help simplify the dream home building process by moving it online. Their platform will help you find builders, designers, and financing options.

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A start-up plans to bring together people, processes, and tools into one digital place for buyers to design and build their homes from start to finish. Co-founder and CEO of Atmos, Nicholas Donahue, grew up in a homebuilding family and always wondered what it would look like to use technology to rebuild the industry.

“Nearly everyone used to want to build a home; it was the American dream, but most people choose not to do it because of the complexity,” Donahue said, “While everything else has moved fully online, homebuilding is still the same in-person process. We are making the process simple enough that anyone can build the home of their dreams, modernizing and revitalizing the American dream.”

The way Atmos works is that they partner with local home builders that they claim to vet based on accreditation, reputation, proof (insurance + funds for construction loans), and pricing. Customers input their desired location and floor plan for the site on the platform. Atmos finds builders that best match the plan and coordinate the rest of the tasks to get the home built, including design, fixture packages, and financing. The company partners with local real estate agents to help sell a client’s existing home, or allows customers to use their own real estate agents if they prefer.

Atmos is participating in the California-based Y-Combinator accelerator, most known for launching companies like Airbnb, DoorDash and Instacart. The company has raised more than $2 million in VC seed round funding from Sam Altman of YC/ OpenAI, Adam Nash of Wealthfront, JLL Spark, and others.

According to Donahue, the rise in demand for housing in emerging cities coupled with low inventory makes building a more attractive option for buyers. He said “homeowners are converting from buying to building and when doing so are being forced to go online because of in-person restrictions. This has provided a huge opportunity for an online alternative to come into the space.”

Additionally, an increasing number of remote workers have come to envision their homes as combined office, schooling, and family spaces. In response, real estate agents report more requests for larger homes with outdoor space and dedicated offices, particularly for homes in the under $400k price range.

Atmos is currently focusing on Raleigh-Durham and Charlotte markets as they continue to refine their business model. Long-term, Donahue says the goal is to “redefine the way people live by enabling the next generation of homes and neighborhoods to exist.”

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