Nearly twice as many people applied for homeownership through Habitat for Humanity between Hampton and New Kent County compared to last year, according to the group’s CEO.
The group received 250 applications this year, said Janet Green of Habitat for Humanity Peninsula and Greater Williamsburg.
“I think it’s because of the housing industry itself,” she said. “There is so much more demand for housing, whether rental or home ownership, that interest rates have caused people to consider other options.”
Habitat for Humanity builds homes for eligible buyers who enjoy 0% interest for 30 years, with the funds used to build more homes. Interest rates for the average 30-year fixed-rate loan have risen dramatically in recent months, from near all-time lows of less than 3% in the fall to an average of 5.7% on Friday. , according to the Federal Reserve Bank of St. Louis.
Rents have also increased. The cost of renting a one-bedroom house in Norfolk rose 20.6% between May and June – the fastest pace in the country, according to a report by Zumper, an online rental property search engine.
“Their rents are going up, the places may not be healthy or in a good neighborhood and they’re looking for other housing options and Habitat is just one of them,” Green said.
People who apply for housing through Habitat for Humanity have stable jobs but not enough money for a conventional mortgage and often have bad credit, according to Green.
She said difficulty paying medical bills is the reason nearly all Peninsula Habitat applicants have bad credit.
Despite the large number of applications, the group can only build about 10 houses a year – a limitation created by the difficulty in finding suitable plots, according to Green.
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Across the James River, Habitat for Humanity of South Hampton Roads received 190 applicants for homes next year during its application period in May, according to Frank Hruska, executive director.
Habitat in South Hampton Roads faces the same challenges and will only be able to build about five homes next year, he said.
“What drives this equation is really the opportunity to find land,” Hruska said.
Three years ago, Habitat for Humanity of South Hampton Roads ended its waiting list because it was unfair to keep families waiting as long as the group tried to keep pace with demand, according to Hruska.
The ideal land for Habitat for Humanity families should be near work opportunities and community organizations, he said. Although Habitat could buy land near the North Carolina border, it would create more trouble for new homeowners than the house is worth if residents had to pay exponentially more for gas or public transit. to work in cities and find childcare, according to Hruska. .
“You solve one problem by asking them another,” he said.
Ian Munro, 757-861-336, [email protected]