The Houston construction loan forecast for 2021 is very difficult to predict, given the set of circumstances currently underway. These include, but are not limited to rising construction material prices, inflationary fears beginning to materialize, near historically low-interest rates, and an influx of new residents into the Lone Star State. However, there are some things that do provide a bit of an explanation as to what’s currently going on. Read further to learn more about the Houston construction loan Market in 2021.
The Houston construction loan industry is in a wild state of play, due to the above-mentioned elements. For example, the shutdowns that occurred last spring through the summer in lumber harvesting and production brought on a supply shortage, which is now materializing and causing prices to spike steeply. That has many builders adding contingencies or stipulations to their estimates since they are unable to lock down the cost of the material.
Then, there’s the matter of near-historic interest rates, which are causing an interesting dynamic in the Houston Metro area and beyond. Homeowners, who would otherwise enter into new construction are either refinancing or pausing their remodeling plans. Meanwhile, new people relocating to the state are more apt to enter the rental market or into the resale market.
Yet another factor coming into play is the slow, incremental price creep, caused by inflationary pressure. As day-to-day living costs go up, people are either sitting out of the new construction market or looking for less expensive, existing housing. This uncertainty is likely to continue through the next few months, even well into next year.