According to a recent post from CNBC, mortgage applications to purchase a new home fell 3% for the week. Unfortunately, they are still 16% higher than a year ago and refinance applications are still on the rise with a 67% year on year increase. (https://www.cnbc.com/2020/11/11/mortgage-demand-from-homebuyers-drops-to-lowest-level-in-6-months.html) All of this makes our adventure of purchasing the Parrett Street historic bungalow long, drawn out, and frustrating.
As a supply chain professional, I am intimately familiar with the impacts when demand outpaces supply – shortages, extended lead times, need to flex capacity or bring on new supply, out of stocks, etc… In terms of the mortgage industry, extremely low interests continue to drive overall demand beyond their ability to manage, delaying communication and extending closing dates.
For us, day 45 is today….we had expected to close but currently have no line of sight. We’ve received only sporadic updates from our lender with requests for updates and/or clarification falling to the “no reply” abyss. I don’t blame anyone personally but it is super frustrating and is driving me crazy. Our realtor, bless her heart, has been wonderfully understanding and patient. She has gone above and beyond to get us the information we lack and has been making continual calls to get progress updates. But, alas, there is simply no excess capacity and we are simply in wait until they give the green light mode.
Since it looks like everything is in order, we are moving forward with bringing in the architect/engineer and working on construction and renovation drawings, project plans and other low risk items like reserving a dumpster —- big need for this, especially on the 2nd floor. Realistically, I’m telling myself it will be after the first of the year before we can really start construction given winter is quickly approaching along with Thanksgiving and Christmas holidays.
Beyond this, the demand for construction materials and contractors is very high – see first paragraph around refinances due to low interest rates. And, supply even without increased demand is off due to COVID. It’s a bit of a mess and an awful time to start a large, complicated and top-to-bottom renovation. Sigh…. Just need to keep reminding myself that patience is my friend here. We aren’t in a huge hurry to vacate our current home even though two mortgages will be a little painful over the next year but definitely manageable.
I guess in the short term, we’ll just plan, plan and re-plan – something I’m good out actually — strategize how to cut costs where it makes sense without sacrificing our vision and look to our friends and family to provide suggestions, guidance, feedback and volunteer hours! Where is you hammer???