Hanging boards, planters, and other construction materials are among the best investments you can make in your home, according to an article published in Recode by a trio of experts from the University of Illinois at Urbana-Champaign.
Read moreThe authors said that homeownership is one of the fastest-growing segments of the economy, with a combined population of more than 5.5 million, which could easily exceed the number of Americans who currently live in the United States.
But despite that potential, the costs of home construction have become a major barrier to the growth of the industry, the authors write.
“Housing is expensive,” says Aaron Hirschfeld, an assistant professor of finance and economics at the University at Buffalo.
“It’s also highly customizable, so it’s really hard to build the right kind of home for everyone.
So what you want to do is take the best value in the market for the current conditions, and then optimize that into a home.”
The authors point to the recent construction boom in New York City as an example of this “best value” approach.
A record 1,200,000 new homes were built in the city in 2017 alone, with nearly 2,000 of them going to families earning under $150,000.
But as the market boomed, prices skyrocketed, and prices continued to rise, the construction boom began to slow.
The authors said it’s important to note that many of the homeowners in this housing bubble are not just paying higher prices than the market would suggest, but also being forced to pay higher rents, too.
“What we’re seeing in New Yorks housing is the best possible scenario for families who can afford to pay more, but can’t afford the more expensive housing in the neighborhood,” Hirschstein told Recode.
The authors write that even though the value of a home is relatively low relative to the value it would cost to construct, it’s still important to take a look at the potential impact of the construction on the future of your family’s future home.
For example, if you have a one-bedroom home, the cost of a single-family home is $9,000, so you’d have to pay a $1,400 monthly mortgage to put that home on the market.
That means your average monthly mortgage payment would increase by $1.25 per month to $12,750.
If you have two-bedroom homes, you would have to build two one- and two two-bedrooms, meaning you’d pay a monthly mortgage of $1 and $1 per month for a two-home home, respectively.
This means that you’d also pay $4,500 a month for two homes.
If, on the other hand, you have one-and-two-bedroom houses, you’d save $2,400 per month.
This would mean that the average monthly savings would be $3,500, or an average savings of $17,000 per year.
The problem is that the savings for homeowners who can’t build the home are often not as great as the savings the rest of us can, and that’s because of the price differences between two- and three-bedroom properties.
As the authors wrote, “there are many homeowners who would not be able to afford a home in any neighborhood if the price of a two bedroom house was $200, and they would need a $300,000 mortgage to do so.
For most of the middle class, these savings would not cover the mortgage, let alone the additional costs of building a home.
In fact, some of the savings that homeowners would have are almost always smaller than the savings from a two home.”
Hirschfeld said this “costs” approach to construction can make homeownership seem “boring” and “uncomfortable,” because it forces people to “pay the price.”
“I think people tend to be a little bit hesitant about paying for a home when it’s not their first choice,” Hinshedfeld said.
“When people are worried about the price and the cost they’ll have to worry about, I think that that’s a little unfair.
It’s a bit of a self-fulfilling prophecy.”
Read moreHirschfield said the best way to solve this problem is to build a house that’s “value-for-money” instead of “value for money” and to get more people to own their homes.
“It’s important that we do it in a way that’s more palatable to them,” he said.
“There’s a very important caveat that we should always keep in mind when we’re doing it, though,” Hineshed said.
He said that when you are building a house for a family, you are “guaranteed” to have a better-than-average return on investment.
“So if it’s a three- or four-bedroom house that you’re building, then it’s guaranteed to be worth $2