Key Points from Danielle's Lecture on New Construction Homes

Introduction

• Danielle is a realtor in Houston, providing insights on current real estate issues.
• Focus on fallout from the 2023-2025 era when interest rates spiked.
• Builders offered creative financing like the "21 buy down".

Issues with Mortgage Buy Downs

• 21 Buy Down: Popular incentive where the initial interest rate was lower, but increased over time.
  • Year 1: 5% interest.
  • Year 2: 6% interest.
  • Year 3: Adjusts to current market rate (e.g., 7%).
• Many buyers were unprepared for higher payments as rates did not decrease as expected.
• Lenders qualified buyers at higher rates, which prevented a major crisis, but did not account for changes in individual circumstances.
• Advice: Do not rely on potential rate decreases or job promotions to afford higher payments.

Property Tax Increases

• Often initially based on land value, not the full property.
• Leads to unexpected increases in taxes and monthly payments after 2 years.
• Common for homeowners to face significant increases and be unprepared for these costs.

Hidden Costs: Insurance

• Texas is prone to weather-related events, increasing insurance costs.
• Insurance premiums have been rising significantly over recent years.

Issues with New Construction Quality

• High quantity of homes built quickly and affordably leads to lower quality.
• Common problems include HVAC issues, mold, and weak foundations.
• Recommendation: Hire a third-party inspector to ensure quality.

Conclusion

• While there are benefits to new constructions, it's important to be aware of the potential pitfalls.
• Understand that initial costs may rise significantly over time.
• Be cautious and make informed decisions.

Call to Action

• Encouraged viewers to like and subscribe for more information.