The rising home values and construction costs in 2023 have been significant topics in the real estate and construction industries. Here's a summary of key insights from various sources:
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Rising Construction Costs: The construction industry faced a substantial increase in costs due to various factors, including labor shortages, inflation, supply chain disruptions, and the impacts of the pandemic and global events like the war in Ukraine. CBRE forecasted a 14.1% year-over-year increase in U.S. construction costs by the end of the year, exceeding the historical average gain of 2% to 4% per year. Despite these challenges, the construction industry has shown resilience through innovation in cost-effective construction methods and materials and the leveraging of technology like Building Information Modeling (BIM) and Virtual Design and Construction (VDC) to improve productivity and reduce costs. I liked this article: https://www.constructionplacements.com/impact-of-rising-construction-costs-2023/
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Home Value Increases and Affordability: The National Association of Home Builders/Wells Fargo Housing Opportunity Index indicated a decline in housing affordability. Only 40.5% of new and existing homes sold between April and June were affordable to families earning the U.S. median income, down from 45.6% in the first quarter. The national median home price rose to $388,000 in the second quarter, up from $365,000 in the previous quarter, with average mortgage rates also increasing. This combination of rising mortgage rates and home prices has put additional pressure on housing affordability. This article was very informative: https://eyeonhousing.org/2023/08/rising-mortgage-rates-and-home-prices-put-a-damper-on-housing-affordability/
These trends reflect the dynamic and challenging nature of the real estate and construction markets in 2023, with impacts on affordability, industry practices, and technological adoption. For more detailed information and analysis, you may want to refer to the full articles from Construction Placements, CBRE, and Eye On Housing.