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Interest Rates are on the Rise

Updated: May 15, 2023

Here's what you need to know about the interest rates impact on accessible housing and container homes.

A recent article from Fortune explains the multiple reasons why the interest rates have precipitously gone up. [Read about it here] What this means: the missing middle homes (i.e., smaller and economical homes) will still be in crisis mode but the cooling of the market will make it even more difficult for middle income individuals and families to find, rent, and buy. Because of this, developing a tiny home community today is still a very good plan. First, if you need to finance land, locking in a rate now will avoid any future increases. While rates may seem high at 6+%, historically they have been much higher as you can see here and here.

In addition, locking in a favorable rate can help you buy a home before your land increases in value and become even more expensive. INVENTORY TOOL: Determining where to buy your land is important and revolves around desired inventory. To determine if inventory has increased, you can divide the number of homes on the market [where you are considering to buy land] and by the number of homes sales in the last month. Numbers 7 or above means there are plenty of houses available (buyer’s market). If the number is 5 or below, it means housing supply is limited (seller’s market). Keeping track of home sales in your desired area will help decide if the housing supply is increasing or declining. Another idea is to buy your land and put only 2-4 units on it immediately, get your ROI rolling, and then add more as needed. You can get your ROI back in 3-5 years depending upon your location, rates, STR vs LTR, and occupancy. We can determine ROI calculations if you give us a call at (866) 629-8251.


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