Slow economies might not strike most people as the best time to build a new home, however if you look past the doom and gloom portrayed on the news, you might be in for a surprise! With a bit of thought and consideration, it may actually be more advantageous to invest in your new home during a slow economy. Take a look at the following reasons why building a home in a slow economy might benefit you:
Lower Interest Rates
If you keep an eye on loan interest rates, you’ll notice that banks often offer lower their rates on borrowing during slow economies. In slow economies, federal governments will typically lower the rate of federal funds – meaning banks can borrow for less. Banks will then pass these lower interest rates on to the general public, in an effort to entice people to take out loans. The reasoning behind this is that more loans means more spending, and spending more helps the economy grow and recover. While a slow economy certainly isn’t ideal, it’s still possible to take advantage of some of the circumstances that follow, such as low interest rates, and build that dream home you’ve been longing for.
Labor is Cheaper and More Available
During slow economies work tends to slow slow for many, including construction companies and contractors. Larger construction projects tend to slow to a crawl during economic downswings, and with less projects to work on, construction companies and contractors will be more eager to take on your project. This lack of work means that they’ll also potentially more flexible in their pricing, and also have more time to work on building your home and making sure everything is done just right. This results in a cheaper, quicker and higher quality construction project that would otherwise be marred by budget restrictions, time constraints, and labor shortages.
Construction Materials are Cheaper
People tend to spend more carefully during slow economies, which lowers the demand for certain products. As a result of this drop in demand, it’s common for retailers and manufacturers in certain industries to lower their prices in an attempt to attract more sales, and the construction industry is no exception. Commodities and raw materials, such as oil and cement, also become cheaper meaning that construction companies and contractors are paying less for their materials and are able to pass on the savings to you.
Better Build Quality
As we mentioned above, labor is cheaper and more available during slow economies. During periods of high demand, skilled contractors and construction companies would typically adjust their prices to meet the high demand and might be out of many people’s budgets. However, when the demand for their services is low, they tend to price their services more affordable, just like construction materials retailers and wholesalers adjust their product prices during slow economies. The affordability of these high-quality services means that you’ll be receiving a better build quality, for less.
If you’re thinking of taking advantage of a slow economy to start building your new home, feel free to get in touch. At Eric’s homes we have over 25 years of combined homebuilding experience, specializing in custom homes and acreage homes. Contact us today to find out how we can help you build the home of your dreams.