Here’s Why Now May Not Be the Best Time to Buy New Construction

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Looking to own a new-construction home? Read on to see why you might encounter some issues if you sign a contract today. 

If you’ve been struggling to buy a home, you’re no doubt in good company. Housing inventory has been sluggish this entire year. And as of late September, there was only a 3.4-month supply of homes on the U.S. real estate market, according to the National Association of Realtors. That’s well below the four- to six-month supply that’s generally needed to meet buyer demand.

As such, you may be at the point where you’re willing to pay to have a home built from the ground up rather than wait for the right existing home to hit the market. Doing so will likely mean taking on a larger mortgage. And at a time when mortgage lenders are charging higher borrowing rates, that may not be ideal.

But if you can afford to purchase and finance a new construction home, you may decide to just go for it. Embarking on that project now, however, is a move you might regret for one big reason.

Will weather get in the way of your home-buying plans?

Any time you sign up to purchase new construction, you run the risk of delays. And those delays can stem from different places.

Homes being built from the ground up need to go through different stages of inspections. Sometimes, there can be a delay on the part of a township or municipality that holds up the construction process.

Similarly, home construction can be delayed if supplies aren’t available when they’re needed. There can also be delays if builders experience staffing issues, such as if their subcontractors cancel on them or fall ill.

There’s basically no time of the year that’s immune to delays when it comes to construction. But if you’re starting a new construction project in winter, you may be more likely to fall victim to weather-related holdups. And that could end up being problematic.

If your home build is delayed extensively, it might put you in a situation where you have to move out of your existing home before your new one is ready. From there, you might have to bear the expense of temporary housing and storage. You could also run into problems if your mortgage rate lock expires and the cost of borrowing rises.

Talk things through with your builder before signing on

Homes get built during the winter months all the time. But if you’re starting a new construction project going into winter, it pays to sit down with your builder and ask some questions first. Those might include:

What weather-related delays are most common?Are there steps you can take to mitigate them?What’s the longest delay you’ve experienced in the course of building a single home?

You may decide to move forward with new construction regardless of the season. But it’s important to know what you’re getting into so you can adjust your plans accordingly. That could mean extending your current lease by a few months so you don’t risk ending up without a place to live, in case your new home takes a lot longer than planned to become move-in ready.

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