This is causing home prices to go up again in 2024
Boston Condos for Sale and Apartments for Rent
This is causing home prices to go up again in 2024
September also marked the third consecutive month where the growth pace has risen, while mortgage affordability also improved, with rates dropping to 6.08 percent from August’s rate from the 6.5 percent.
Home prices rose 6 percent on a year over year basis, marking the lowest annual increase since December 2023, according to the Redfin’s Home Price Index, which uses the repeat sales method to calculate how real estate valuations change over time.
The increase in prices can be traced to high demand and a lack of housing supply. There are 20 percent fewer homes on the market today than there were a half decade ago, when people took advantage of historically low mortgage rates.
New York’s Nassau County recorded a 1.7 percent rise in home pricing, the largest increase recorded in September. Philadelphia followed with a price increase of 1.6 percent, while Virginia Beach prices increased by 1.4 percent.
New home prices (including Boston condo for sale) are likely to rise again as the cost of lumber is accelerating once more.
Real estate and rising lumber costs
The rising price of lumber will likely add thousands of dollars to the price of new homes as it’s the single most important building material used in the development of most properties.
Lumber prices are said to be around triple their average pre-pandemic cost, according to lumber industry news site Random Lengths.
Lumber is causing Boston condo prices to rise
That cost increase has added an average of $18,600 to the price of a new home, the National Association of Home Builders confirmed.
It’s certainly no joke. Meanwhile the average cost a new multifamily home is likely to rise by around $7,300, the NAHB said. That would translate to a cost of around $67 a month more for anyone looking to rent a new apartment.
The price of lumber reached record levels early last year. However, builders thought the worst was over as the price of lumber declined dramatically from the middle of the year until December 2021. However, that month saw prices rebound sharply.
Boston condos for sale and high demand
The increased costs are due to sawmills being unable to keep up with the high demand of the construction industry, Random Lengths said. Sawmill output significantly trails the increase in housing starts, builders confirm. Also, ongoing supply chain disruptions, such as tariffs on Canadian lumber imports and a strong wildfire season, have also contributed to recent price rises.
Boston condos for sale and the bottom line
Overall, building material prices have climbed 20.3% annually and have risen 28.7% since January 2020, according to NAHB data. The jump in building material prices has been led by rising costs for lumber and paint.
