May’s Industry News Update

What is going on lately in the Real Estate Industry?

Check out this month’s update from the desk of Laura Piatt, Ticor Title Mid-Valley Sales Manager

Homebuyers canceling contracts as lumber costs CONTINUE soar…..Increasing of mortgage rates are not helping either.
Let’s talk about it!

  • Rising costs for lumber and other materials are causing new home contracts to be canceled, according to the National Association of Homebuilders.
  • Lumber costs have surged more than 170% over the past year, adding around $24,000 to the cost of a new home.
  • And that’s not the ONLY material increasing….
  • Concrete, metal products, appliances, and other expenses are also increasing due to supply chain disruptions caused by COVID-19 shutdowns.
  • The problem of higher materials costs is being compounded by a rise in mortgage rates. The rate on a 30-year fixed mortgage has risen by 30 basis points over the past month to a seven-month high of 3.24%. Rates hit a record low of 2.85% in November.
  • Pushing the first-time home buyer out of the an already competitive and EXPENSIVE market, with every increasing prices.

Biden’s $15K first-time homebuyer tax credit now a bill

  • Originally, Maxine Waters sponsored a discussion draft bill to give first-time homebuyers who were also first-generation homeowners up to $25,000 in a grant they could use for down payment assistance.
  • NOW…..IT is almost a mirror image of the 2008-2009 tax credit:
    • The Obama administration enacted the federal first-time homebuyer tax credit in 2008. Created as a response to the 2008 financial crisis, the Housing and Economic Recovery Act (HERA) allowed new homebuyers to get a tax credit of up t0 $7,500 during the first year of the initiative.
  • Biden’s $15K first-time homebuyer tax credit now a bill:
    • The First-Time Homebuyer Act would provide a tax credit of up to 10% of the purchase price, or $15,000. And it is a refundable tax credit — not cash at the closing table.
    • My opinion, this is NOT the answer.
    • Literally, throwing GAS on a LIT FIRE!
    • We need supply, not MORE demand – more buyers flooding the market.
  • That combined with the RISE in building costs:
    • Increase of aprx. $25,000 per new build
  • MY opinion, this will continue to INCREASE prices
  • Speaking of a inventory issues…..

A little WVMLS reporting:

We have more AGENTS than ACTIVE listings (excluding all leases):

  • 1,803 active RESIDENTIAL listings
  • 2,952 Agents (aprx)
  • 2010 – aprx. 1,600 Agent with 13 months of inventory
    • Remember when seller’s paid closing costs?

10 Year WVMLS Comparison –

Total ListedNum SoldAvg.
List Price
Sale Price Sold
Avg DOM SoldAvg List Price UnsoldPct ExpiredSale Price or List Price Ratio

Laura’s predictions……

SUPPLY vs. Demand:

  • We still need supply – A LOT MORE to catch up with the demand
  • Market will continue to be strong until we see a balance
  • Rate are low; therefore, BUYING POWER remains strong!!
  • They hit BELOW 3 today for the first in 3 months!
  • And the Proposed New homeowner tax credit WILL NOT help an already buyer-saturated market. You’re creating more of an issue.
  • Great time to be a SELLER!
  • Yesterday, David Ramsey said, this is not a bubble. It is a great time to buy and a great time to sell.

Wrap Up:

  • Agents and lenders; keep an eye out on buyers in contacts on new builds – things change, that is part of the risk of a new build. Cost will be a factor
  • While rates are rising; they are still low BUT we need to keep the consumer confidence UP!

In the end…

  • Affordable housing and multifamily units will suffer greatly, due to this increase. 
  • And that is your middle America folks, lower income, first time home buyers, etc.
  • Essentially squashing affording single family homes
  • Support your National Home Builders Association – get involved on a local level or local association
  • Watch our administration, write your local officials:
  • Hopefully, the NAHB can put enough pressure and EXPOSURE to this issue, in hopes we can make some QUICK adjustments in our market.


Ticor Title Mid-Valley

315 SE Commercial St.
STE 150
Salem, OR 97301

Phone: 503-585-1881

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