For some buyers, there’s a misconception that newly built homes aren’t made to last or fall short of the quality you can find in older homes. Unfortunately, this is turning some buyers away from what may be one of their best options in today’s housing market. As Builder Online says:

“As resale inventory remains limited and the price spread between new and resale homes narrows, new homes are increasingly an attractive value proposition for buyers, with incentives such as rate buydowns a way to help address ongoing affordability challenges.”

So, is there any merit to the myth? Let’s break down the best way to make sure you feel good about looking into new home construction. That way, you’re not missing out on such a great option today.

Choosing the Right Builder

The key to making sure you get a quality newly built home is to choose a good builder. Reputable builders adhere to strict building codes and standards, use advanced construction techniques, and often offer warranties that cover structural issues for several years. That’s why the Mortgage Reports offers this advice:

“When embarking on the journey of buying a new construction home, one of the most important steps is selecting the right builder. This decision can significantly impact the quality and satisfaction you derive from your new home.”

And while you could dig into research about all the builders in your area, there’s an easier option to get the job done: lean on a pro. When you work with a local real estate agent, they already know about the builders and the new home communities under construction in your area.

Beyond that, maybe they’ve even worked with other buyers who opted for a home in one of those neighborhoods. Here are just a few of the things your agent will help you with:

1. The Builder’s Reputation: Your agent will help point you toward builders with strong reputations and positive reviews from previous buyers. Additionally, your agent will make sure the builder is licensed and insured. Membership in professional organizations, such as the National Association of Home Builders (NAHB), is also a good sign of a builder’s commitment to industry standards.

2. Their Model Homes: Your agent will also be able to tell you if the builders have model homes you can tour. And when your agent walks through the model with you, they’ll draw your attention to the little details that matter most. Things like the quality of finishes, layout, and overall feel of the home.

3. Builder Warranties: Your agent will also be able to help you navigate any builder offers or incentives. Reputable builders often provide warranties to cover major structural elements of the home for a significant period of time. This is a testament to their confidence in the quality of their construction.

4. Getting Inspections: Even with new homes, inspections are crucial. Your agent will coordinate the inspections with licensed professionals to ensure the home meets safety and quality standards before you move in.

Agents Are the MVP When You’re Buying a Brand-New Home

Maybe that’s why data shows homebuyers unanimously scored their agents higher than their builders when looking back on their recent purchase:

So, you don’t need to worry that they just don’t make them like they used to. By working with a knowledgeable real estate agent to choose a reputable builder, you can feel confident when buying a newly built home today. As Realtor.com says:

“If you are interested in buying a new construction . . . You need your own real estate agent from the get-go. Even if it seems like plug and play to sign up with the builder’s on-site agent, you’re going to want someone representing your side of the deal.”

Bottom Line

If you’re considering buying a brand-new home, don’t let misconceptions hold you back. Work with a local real estate agent to find a home you’ll love and be proud to call your own.

Some Highlights

• Based on a recent study, in 22 of the top 50 metros, the monthly mortgage payment is lower than the rent payment.
• Make sure you work with a pro who can help you crunch the numbers and see how your city stacks up. 
• This may be your opportunity to forget renting for good. If you want to see which option makes the most sense in your area, connect with a local agent.

You may have heard chatter recently about the economy and talk about a possible recession. It's no surprise that kind of noise gets some people worried about a housing market crash. Maybe you’re one of them. But here’s the good news – there’s no need to panic. The housing market is not set up for a crash right now.

Real estate journalist Michele Lerner says:

“A housing market crash happens when home values plummet due to a lack of demand for homes or an oversupply.”

With that definition in mind, here are two reasons why this just isn’t on the horizon.

1. Demand for Homes Is Higher than Supply

One of the biggest reasons the housing market crashed back in 2008 was an oversupply of homes. Today, though, it’s a very different story.

It’s a general rule of thumb that a market where supply and demand are balanced has a six-month supply of homes. A higher number means supply outpaces demand, and a lower number means demand outpaces supply. The graph below uses data from NAR to put today’s situation into context:

The graph compares housing supply during three different periods of time. The red bar shows there were 13 months of supply before the 2008 crisis, which was far too much. The gray bar shows a balanced market with six months of supply, for context. And the blue bar shows there are only 4.2 months of supply today.

Put simply, there are more people who want to buy homes than there are homes available to buy right now. So, demand is greater than supply. When that happens, home prices stay steady or rise – the opposite of a housing market crash.

It’s important to note that inventory levels differ from market to market. Some areas may be more balanced, while a few could have a slight oversupply, which can impact prices locally. However, most markets continue to experience a shortage of homes.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”

2. Unemployment Is Still Low

When people are unemployed, they’re more likely to have trouble making their mortgage payments and may be forced to sell or face foreclosure. That was a big problem during the 2008 financial crisis. Today, the employment situation is much more stable (see graph below):

Again, this graph shows three different periods of time, but this one is the unemployment rate. The red bar represents the 2008 financial crisis when unemployment was very high at 8.3%. The gray bar shows the 75-year average of 5.7%. And the blue bar shows the unemployment rate today, and it’s much lower at just 4.1%.

Right now, people are working, earning an income, and making their mortgage payments. That’s one reason why the wave of foreclosures that happened in 2008 isn’t going to happen again this time. Plus, since so many people are employed right now, many are actually in a position to buy a home, and this demand keeps upward pressure on prices.

Today’s Housing Market Is Stronger than in 2008

While it’s understandable to be concerned when you hear talk of a recession and economic uncertainty, but know this: the housing market is in a much better place than it was in 2008. According to Rick Sharga, Founder and CEO at CJ Patrick Company:

“Literally everything is different about today’s housing market dynamics than the conditions that led to the housing crisis.”

Demand for homes still outpaces supply, and unemployment remains low. And these are two key factors that will help prevent the housing market from crashing any time soon.

Bottom Line

The housing market is in a much better place than it was in 2008, but it’s important to remember that real estate is very local.

So, it’s always a good idea to stay informed about your specific market. If you have any questions or want to discuss how these factors are playing out in your area, reach out to a local real estate agent.

If you’ve been wanting to sell your house and move up to a bigger or nicer home, you’re not alone. A recent Inman survey reveals the top motivator for today’s homebuyers is the desire for more space or an upgraded home (see graph below):

But there’s also a good chance you, like many other people, have been holding off on that goal because of recent market challenges. It makes sense – when you’re planning an upgrade that could increase your monthly housing costs, affordability has a huge impact on when you make your move. But there’s good news: now’s actually a great time to make that move happen. Here’s why.

You Have a Lot of Equity To Leverage

One of the key benefits in today’s market is the amount of equity you’ve likely built up in your current house over the years. Even with recent shifts in the housing market, national home prices have steadily grown, adding to the equity homeowners have today. Selma Hepp, Chief Economist at CoreLogic, explains it well:

“Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.”

What does that mean for you? If you’ve been in your home for a few years, you’re probably sitting on a significant amount of equity. You can put that toward the down payment on your next home, helping keep the amount you borrow within a comfortable range.

This can make upgrading more achievable than you might think. If you’re curious how much you’ve built up over the years, ask your real estate agent for a professional equity assessment.

Mortgage Rates Have Fallen, Boosting Your Purchasing Power

And there’s another big reason why now’s a great time to make your move: mortgage rates are trending down. Lower rates can help make your future monthly payments more manageable, and they also increase your purchasing power. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), points out:

“When mortgage rates fall, the interest portion of monthly payments decreases, which lowers the total payment. This makes it easier for more borrowers to . . . qualify for mortgages that may have been unaffordable at higher rates.”

That gives you more flexibility when shopping for homes and may allow you to afford a house at a price point that was previously out of reach. A trusted lender can work with you to figure out the best plan for your budget.

Bottom Line

If you’re ready to sell your current home and find the bigger, nicer home you’ve been dreaming of, don’t wait. Your equity, paired with lower mortgage rates, puts you in a great position to make that move today.

To make the best decisions and get the most out of your current market advantage, work with a trusted real estate professional who can guide you through every step of the homebuying process.

Recent headlines have been buzzing about the median asking price of homes dropping compared to last year, and that’s sparked plenty of confusion. And as a buyer or seller, it’s easy to assume that means prices are coming down. But here’s the catch: those numbers don’t tell the full story.

Nationally, home values are actually rising, even if the median price is down a bit. Let’s break down what’s really happening so you can make sense of the market without getting caught up in the fear the headlines create.

Homes on the Market Right Now Are Smaller

The biggest reason for the dip in median price is the size of homes being sold. The median price reflects the middle point of all the homes for sale at any given time. And that’ll be affected by the mix of homes on the market.

To show you how this works, here’s a simple explanation of a median (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median (the middle one) is 10 cents. If you have two nickels and one dime, the median is now five cents.

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change. The same is true for housing.

Right now, there’s a greater number of smaller, less expensive homes on the market, and that’s bringing the overall median price down. But that doesn’t mean home values are declining.

As Danielle Hale, Chief Economist at Realtor.com, explains:

“The share of inventory of smaller and more affordable homes has grown, which helps hold down the median price even as per-square-foot prices grow further.”

And here’s the data to prove it. 

Price Per Square Foot Is Still Rising

One of the best ways to measure home values is by looking at the price per square foot. That’s because it shows how much you're paying for the space inside the home.

The median asking price doesn't take into account the size of different homes, so it may not always reflect the true value. And the latest national price per square foot data shows home values are still increasing, even though the median asking price has dropped (see graph below).

As Ralph McLaughlin, Senior Economist at Realtor.com, explains:

“When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.”

This means that while smaller homes are affecting the median price, the average home’s value is still rising. According to the Federal Housing Finance Agency (FHFA):

“Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.”

So, while headlines may make it sound like prices are crashing, you don’t have to worry. With a closer look and more reliable data, you can see that prices are still climbing nationally.

But it’s important to remember that home prices can vary by region. While national trends provide a big-picture view, local markets may be experiencing different conditions. A trusted agent is the best resource to explain what’s happening in your area.

Bottom Line

The decrease in median price is not the same as a decrease in home values. The median asking price is down mostly due to the mix of smaller, less expensive homes on the market.

The important thing to focus on is the price per square foot, which is a better indicator of overall market value—and those prices are still going up. If you have questions about what home prices are doing in your area, reach out to a local real estate agent who can provide insights on your specific market.