When purchasing a new home—and we mean new—most people enter the process optimistic and excited. Not only are you getting a house that is tailored to you and your needs, but you’re also getting something that is problem free since it hasn’t been lived in and used before. Obviously, not all new construction homes are perfect, and buyers do run the risk of uncovering structural problems as they live in the house. Nonetheless, COVID-19 has affected the new construction buying process in more ways than one. Considering moving forward with this type of purchase? We have some advice on roadblocks that you may encounter:.
Construction Delays
One of the biggest instances in how new construction buyers could be impacted by COVID-19 is that in many parts of the country, contractors and construction workers were either unable to work at all or had a limit to what projects can be performed. Thus, many housing projects were put on hold until further notice. Every area in the country is different, so how this will affect you varies by where you’re purchasing a home. If you’re in the area surrounding New York, chances are, construction probably came to a complete halt. If you’re located somewhere like Michigan, it probably just slowed down.
Supply Shortage
Due to the pandemic, many manufacturing companies had to either completely shut down or slow their rate of production. Additionally, a good portion of the supplies that builders use is from other countries, which could also be of issue due to restrictions abroad, especially from countries like China. This can also make supplies more expensive due to the pure nature of them being harder to acquire. Talk to your contracting company about this issue to see if it is going to affect the price of the house.
Health and Safety Procedures
In the past, a big part of buying a home, especially a new construction one, is being present during the process. Usually, one will be able to go to the design center to start the process, come to follow up appointments, and end the new build with a lengthy walkthrough of the house to check for defects. Some of these steps are either paused or shortened. What was once a personal experience is now much more rushed in order to keep those involved safe.
Stricter Loan Requirements
Because of the pandemic, and in order to help keep the economy stable, lenders have put a tighter restriction on who can take out a loan. In the past, you were likely able to get by with an average credit score and moderate downpayment. Nowadays, you need a credit score closer to 700 and a sizeable down payment in order to be considered. Due to these restrictions, many people who might have been considering a new home are having to put their plans on hold until they are qualified. While this is expected to loosen up, it is something to keep in mind for now.
The Rundown
Stop and ask yourselves these questions when buying new home construction during a pandemic: am I in good standing for a mortgage loan? Do I have the time to wait for any delays? And is this a good idea for my current situation? Everyone is different, and it’s up to you to decide what is going to work best for you and your family.