The COVID-19 pandemic has brought unprecedented confusion into 2020, affecting everyone’s lives as well as the economy in general.
You might think that new home construction in Oklahoma has ground to a standstill… and you would be wrong. While many businesses are suffering because of COVID, and unemployment is incredibly high, many other industries are experiencing a boost in sales and activity.
Let’s talk a little about the legal and economic panorama surrounding the construction of homes in Oklahoma during COVID-19.
The Legal Aspects
One of the first major measures taken by the State was dividing businesses in essential vs non-essential categories, and ordering everything non-essential to shut down, to slow the spread of COVID-19.
According to Pillsbury Law, on April 1, Governor Kevin Stitt issued an Executive Order mandating the closure of all non-essential business. That said, the Oklahoma Essential Industries List includes, “Construction, Contractors and Heavy and Civil Engineering Construction” in the essential business list, so we were able to continue working, albeit with all necessary sanitary measures.
There have been more Executive orders issued and amended in April, May and June, all of which have confirmed and reinforced the construction business as essential.
The Financial news
Since the economy has slowed down, unemployment is high and everyone is cautious with their money, the Federal reserve has lowered mortgage interest rates to encourage some more spending.
The National Association of Home Builders (NAHB) reported recently: “The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.”
3% mortgages are the lowest in modern history, and they have definitely helped to activate the construction industry.
Post-COVID Floor Plans
Now that everyone is working from home, socialization has been reinvented, and even many children are taking their lessons online, the ideal home looks very different from what it did last year.
Since remote work is now a viable option for many, people are considering buying and building further away from their workplace, hoping they will not have to commute as often as they did before the pandemic took the world by storm.
Besides the increase in options due to a wider geographical area of interest, the design and floor plans of homes has changed deeply.
Ideal homes now have two home offices instead of just one, and outdoor living areas are even more popular than they were already, since they allow for safe, distanced socializing and entertaining.
A few drawbacks
While buyers are buying, mortgages are encouraging construction, and homes are changing and adapting to the times, there are some drawbacks also brought on by the COVID-19 pandemic, especially how it has disrupted supply chains.
Building materials and supplies are scarce, imported materials are complicated to source, and even basic supplies like framing lumber are in such high demand - and low availability - that house prices are expected to go up 3-6% in the next few months, and maybe more in 2021.
If you have been thinking of building, you will never get a mortgage at a rate as low as this one for decades. Home builders in Oklahoma are starting to fill their calendars, so call us and let’s go over your options - your dream home may be much closer than you think.