July Market Report 2021
In the Treasure Valley during the month of July, mortgage rates and applications dropped, jobs increased, consumer credit surged, and construction spending dropped significantly.
Mortgage rates dropped to a composite 1.8%, the lowest level in five months, and mortgage applications slowed for both existing home refinances and new purchases.
Job openings increased to a new high, over 215,000 for small businesses and 692,000 for private-sector companies, and layoffs and discharges hit a low of 0.9%.
Consumer credit surged 10% back in May 2021, and pending home sales hit a high level-up 8% month-over-month. The median sales price for homes in Ada County reached $525,000 in June, although the home inventory is growing steadily to match the demand.
Construction spending dropped in the Treasure Valley during May 2021. However, construction spending is up 7.5% compared to previous years. The lumber shortage is so desperate that many homes sit unfinished for months while contractors wait for materials they can afford and will work for their projects. Wood and other available resources are highly overpriced and can be triple what they cost pre-2020.
Even pre-2020, back in 2019, contractors had a difficult time obtaining skilled workers for their projects. As a result, skilled construction workers charge more for their services, which raises the total cost for new home buyers.
Contractors have to hold off on building new homes due to both the prices and lack of skilled labor. The demand for new homes is so high that homes need to be built, but the high costs aren’t worth it to many builders as much of the extra cost is taken from their pockets. High overhead costs from skilled labor and scarce materials make it so the builders pay more without getting it back in revenue.
The market is continuing to balance equal inventory with demand, and with the increase in jobs, the economy will balance out as well. With a steady economy and workers, the material prices for building will go down again, and contractors will be able to finish their projects, helping new home prices go back down and balancing the housing market. You can buy a home with the higher inventory we have right now on the market without multiple offers involved, and the need to increase your own offer is going away for now. The perfect home is waiting out there for you, and we can help you find it.