Will Home Prices Go Up Soon?

In January, the cost of a lumber package for a single-family home skyrocketed to $30,000, a staggering increase of $13,000 from April 2020. This significant rise in lumber costs has profoundly affected housing affordability. A year ago, 36% of new homes were priced under $300,000, but now, this figure has dropped to just 21%. The housing starts have also seen a decline of 9.8%, further deepening affordability concerns.

While Canadian investments have spurred jobs in the Midwest and South, U.S. manufacturing revival will take time. Tariffs aim to curb inflation, but the Fed is holding rates steady. If inflation follows 2024 trends, cuts may come later this year. The housing industry warns that tariffs on lumber and other materials raise construction costs, ultimately pushing prices higher for buyers.

Bottom line:

With mortgage rates coming down to mid 6% as the spring season is just around the corner, and new construction starts are put on hold, existing home prices are expected to go up.

If you plan on buying a house in the coming months, be ready to act fast and decisively. Find an agent who answers their phone ( I am not joking), act fast and knows how to operate in a fast-changing and fast-paced environment.