Why Are Houses So Expensive?

January 9, 2024

You might be at the point where you would love to buy a home or even build one with the help of a home builder. Perhaps you have confirmed that you can afford a home today, but you wonder what the cost breakdown is. Why are houses so expensive, and why are they so expensive today?

Reasons Houses Are Expensive

Land is Valuable

When buying a house, you are also buying land, which has great value. Land is limited and in great demand. Land ownership also has great significance, giving the owner wealth and authority. Land prices depend on how desirable the area is as well.

Construction Costs Are High

Construction costs, such as design, labor, and materials, all have costs, and those costs add up. The whole house also has value outside of the construction costs, which is why there are construction-to-permanent loans in home building. Since 2020, construction costs have soared and settled.

General Inflation

Due to many economic influences, prices have risen everywhere for almost everything over the last few years, including homes. Part of what causes prices to rise is a high demand and low supply. The reasons that the housing supply is low are manifold, one being that homeowners are reluctant to exchange a low interest rate for a higher one.

Increased Mortgage Rates

Speaking of mortgage rates, the increased mortgage rates are certainly not helping, although they have thankfully started to settle in the past few months. Although not included in the house listing price, the mortgage rate can significantly alter how much you are paying per month. Inflation and the government’s response to it are connected to increasing rates.

Ameri-Star Homes Can Save You Money

Ameri-Star Homes has many tips on how to be financially shrewd no matter how high or low the rates are. We also have strategies to help you save on your mortgage, all while building a sturdy, customized new home for you. Learn more on our blog about how you can save and how you can customize your home to your heart’s content.

Let Ameri-Star Homes Build Your New Custom Home!

Ameri-Star Homes was built on the idea that a home is not complete until the homeowner is 100% satisfied. That’s right, completely satisfied homeowners. Whether you want a home built on one of our home sites or on your own land, count on the same high quality from Ameri-Star. We have set out to exceed all your expectations of integrity, affordability, and customer satisfaction. Build lasting memories for years to come with Ameri-Star Homes. 

For more information, contact us today at 410-590-1000 or through our contact page. For more helpful custom home tips, keep in touch with us through Facebook, Twitter, LinkedIn, and Pinterest!