Competing With Rising Home Interest Rates

Competing With Rising Home Interest Rates

Competing With Rising Home Interest Rates

Michigan is booming with opportunities for contractors to build; despite interest rates soaring for homebuyers. The average rate for a 30-year mortgage is currently above 6% and buyers are getting picky with what they want and how quickly they want to move in. Many Michigan residents seeking a new home are opting to build from scratch, and they are quite selective when it comes to who they trust to build.

The reality to face in Michigan is that many contractors are booked fairly solid through the end of the year yet. As winter quickly approaches, contractors are scrambling to finalize builds and begin on houses they’ve had backlogged. Despite their packed schedules, many contractors have reduced prices to build or have increased limits on cancellations in order to compete with the demand and rising interest rates for homebuyers.

Michigan contractors should take advantage of a more booming building market. Now is a prime time to create a log of  home build projects for the upcoming year– even with interest rates increasing. 

Here are a couple of tips for builders to keep in their back pocket as they bid new jobs:

1. Find the niche homebuyers you want to build for. This can eliminate or add opportunities to your plate for the ideal homes to build.

2. If bids are up for grabs in an area of growing subdivisions, remember that it can be a prime opportunity for your business to gain preferred status for others who wish to build.

3. Know your limits. Have a hard line on where you can no longer accept a project due to time, extensiveness, or revisional requests of the homebuyer.

4. Have a project timeline standardized for different project sizes and stick to it.

5. Make the homebuyer's decisions feel more streamlined by having “packaged” options of material choices you know you can get your hands on in the timeframe that fits to meet project deadlines. 

6. Don’t overpromise and underdeliver. You can take on too much work and leave a bad taste in people’s mouths if you are not delivering. Stick to your plan and communicate often with the homebuyer.