{"id":22830,"date":"2026-04-15T13:07:17","date_gmt":"2026-04-15T13:07:17","guid":{"rendered":"https:\/\/finproshub.com\/?p=22830"},"modified":"2026-04-15T13:07:19","modified_gmt":"2026-04-15T13:07:19","slug":"im-kind-of-squeezed-out-of-buying-a-house-he-might-build-one-instead","status":"publish","type":"post","link":"https:\/\/finproshub.com\/?p=22830","title":{"rendered":"\u201cI’m kind of squeezed out of buying a house.\u201d He might build one instead |"},"content":{"rendered":"
\n
<\/div>\n

\n Illustration by Hunter Newton\/Bankrate\n <\/p>\n<\/p><\/div>\n

\n

Blake Johnson, a construction superintendent in Seattle, wants to buy land and build a house on it. After all, the 24-year-old has the chops \u2014 having worked 60 hours a week for several years on commercial and residential renovations. But loan interest rates for land in his area run from 10% to 16%, which is much higher than typical mortgage rates. And he\u2019d still have to pay for the build.<\/p>\n

Setting the scene on homebuying<\/h2>\n

Land loans are less standardized than regular mortgages and can come with higher credit score and down payment requirements, higher interest rates and shorter terms. Loans to buy land often go hand in hand with a construction loan or what\u2019s called a construction-to-permanent loan. That\u2019s when the loan turns into a regular mortgage after the home is built.<\/p>\n

The National Association of Home Builders found the volume of single-family construction loans rose toward the end of 2025 to $91.2 billion, up .5% from a year prior and the first increase in two years. Still, the volume for those loans is less than half of what it was in 2008.<\/p>\n

As is true for any home loan, it\u2019s worth comparing construction loan lenders to make sure you get the best rate and terms for you. But the real savings might come once you\u2019ve converted to a home loan.<\/p>\n

\n

\n The reason why [land loan rates are so high] is \u2014 if the lender or bank has to, for whatever reason, foreclose, there\u2019s nothing there. There\u2019s no value. It\u2019s just dirt.<\/q>
\n
\n \u2014 Diego Cardenas, real estate agent
\n <\/cite>\n <\/p><\/blockquote>\n<\/div>\n

Behind his homebuying experience<\/h2>\n

As a blue collar worker, Johnson feels priced out of the housing market where he lives. And there\u2019s data to back up his perspective. Bankrate ranked Seattle the ninth-least affordable metro area in the best and worst markets for homebuyers report, noting only 8.3% of homes were affordable. The data shows you\u2019d need to earn $206,007 to afford a median-priced home.<\/p>\n

\u201cIn Seattle, owning a house for anybody who is not in tech feels like a cruel joke,\u201d Johnson says. He feels squeezed out of buying within the city and has resorted to looking farther out for land to build on, even with at least a one-hour commute.<\/p>\n

Ideally, he\u2019d buy the land with cash or borrow from his dad to avoid high interest rates. Then, he\u2019d need a loan to pay for labor, materials and permits. He thinks he could handle the siding, framing, roofing and interior finishes and tap into his network of subcontractors for the rest.<\/p>\n

\n <\/p>\n

\n An expert’s take
\n <\/h3>\n

<\/p>\n

\n If you set out to build a home or renovate an existing one, be savvy about the contractors you choose. Diego Cardenas, Denver real estate agent who specializes in investment properties and fixer uppers, suggests looking beyond the first page of online search results. Those are the contractors who are good at marketing but will subcontract the work to another company. \u201cFind the guy that\u2019s actually doing the job himself,\u201d Cardenas says. You can also ask your real estate agent for recommendations and get multiple bids.<\/p>\n<\/p><\/div>\n

His homeownership dream<\/h2>\n

Johnson has wanted to own a house since he was a teenager and admits he\u2019s class conscious. \u201cThere are those who own and there are those who don\u2019t,\u201d he says. \u201cI would like to be one of those that owns.\u201d<\/p>\n

He says he even chose his career path in construction to help him someday buy or build a home.<\/p>\n

Johnson dreams of running his own construction business one day, and owning land would give him room to store equipment and run operations. But right now, he only has time to work a few side gigs outside of his full time job. \u201cI\u2019m working more than I think I ever wanted to,\u201d he says. \u201cMostly because I\u2019m betting on the [housing] market dropping pretty soon.\u201d<\/p>\n

\n
\n
\n Did you find this page helpful?<\/p>\n
\n
\n

\n Why we ask for feedback<\/strong>
\n Your feedback helps us improve our content and services. It takes less than a minute to
\n complete.\n <\/p>\n

Your responses are anonymous and will only be used for improving our website.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n

Help us improve our content<\/p>\n

\n