Nearly twice the number of people applied to become homeowners through Habitat for Humanity between Hampton and New Kent County compared with 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 because the housing industry itself,” she said. “There’s so much more demand for housing, whether it’s rental or home ownership, interest rates have made people look at other options.”
Habitat for Humanity builds homes for eligible buyers who are given a 0% interest rate for 30 years, with the funds going to build more homes. Interest rates for the average 30-year fixed rate loan have increased dramatically over recent months from near historic lows of under 3% in the fall to an average of 5.7% as of Friday, according to the Federal Reserve Bank of St. Louis.
Rents also have been rising. The cost to lease a one-bedroom home in Norfolk increased by 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 options for housing and Habitat is just one of those,” Green said.
The people who apply for housing through Habitat for Humanity have steady employment 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 of the Peninsula Habitat’s applicants have bad credit.
Despite the large number of applications, the group can only build 10 or so houses a year — a limitation created by difficulty in finding suitable parcels, according to Green.
On the other side of 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 can only build about five homes next year, he said.
“What drives that equation is really the opportunity to find land,” Hruska said.
Three years ago, Habitat for Humanity of South Hampton Roads ended its waitlist because it was unfair to keep families waiting for so long as the group tried to keep pace with demand, according to Hruska.
Land ideal for Habitat for Humanity families needs to be near work opportunities and community organizations, he said. Though Habitat could buy land near the North Carolina border, it would create more problems for the new homeowners than the home is worth if residents have to pay exponentially more for gas or transit to work back in the cities and finding child care, according to Hruska.
“You’re solving one problem by putting another problem on them,” he said.
Ian Munro, 757-861-336, ian.munro@virginiamedia.com
