The Net Result of this is HORRIBLE for First Time Homebuyers.. Add me on insta @ThisisJohnWilliams
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Home builders and real estate developers profited immensely from this low interest rate environment that we have been in over the last few years. This has allowed home builders to buy sites, buy materials and sell their tract homes for record prices and new home buyers were also happy as many of these home buyers were leaving expensive communities in cities such as Los Angeles and New York City where they were spending a fortune on rent and were not on the path towards homeownership.
However now we are seeing many home builders getting screwed with many cancelled contracts and the housing crash looks like it will happen very soon. When this housing market crashes one thing we can bet on is that there will be many housing tracts all over the country that are left unfinished and most likely large investors will buy these unfinished tracts and turn them into rent to own communities or for rent only communities.
As this happens it will be very unfortunate for first time home buyers who hope to buy their first home. I see many more developers building directly to rent going forward. Companies such as Lennar Builders who builds over 50,0000 homes per year and is now switching to this model in their newest $4,000,000,000 real estate fund.