Homebuilders Aren’t Overbuilding, They’re Catching Up

You may have heard that there are more brand-new homes available right now than the norm. Today, about one in three homes on the market are newly built. And if you’re wondering what that means for the housing market and for your own move, here’s what you need to know.
Why This Isn’t Like 2008
People remember what happened to the housing market back in 2008. And one of the factors that contributed to that crash was that there were too many homes for sale. While only part of the oversupply back then came from builders, the lasting impact is that some people still feel uneasy when they hear new home construction has ramped up.
Even though the supply of new homes has grown this year, the data shows there’s no need to worry. Builders aren’t overbuilding, they’re just catching up.
The graph below uses data from the Census to show the number of new houses built over the last 52 years. Following the crash in 2008, there was a long period of underbuilding (shown in red). And it wasn’t until recently that we finally met the long-term average for how many homes are built in a typical year.
This shows, that even with the increase in new builds we’ve seen lately, there won’t suddenly be an oversupply of homes for sale. There’s too much of a gap to make up after over a decade of underbuilding. And if you’re still worried builders are overdoing it, here’s something else that should be reassuring.
New Home Construction May Be at Its Peak for the Year
The latest data from the Census on housing starts (homes where builders just broke ground) and permits (homes where builders can start development soon) shows builders are slowing down their pace right now. Why is that?
They’re responding to still high mortgage rates and how those are impacting buyer demand. Basically, they’re pulling back appropriately in response to what’s happening in the market. As an article from HousingWire explains:
“Even with a massive housing shortage across the nation, homebuilders are completing their pipelines and not seeking as many permits to construct new single-family houses.”
Builders remember what happened when they overbuilt in the crash, and they’re looking to avoid a repeat of that. So, they’re being mindful and pulling back a bit.
You May Have More Options Now Versus Later
If you’re considering a newly built home, here’s how this impacts you. With builders seeking fewer permits and not breaking ground on as many new homes, we may be at the peak of new home construction for the year. This doesn’t mean new home construction is screeching to a stop – just that the pace is slowing down now, and that’ll impact what comes to market later this year. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“Given the recent declines in housing starts, home completions will steadily show declines in about six months.”
So, if you’re ready and able to buy now, you may find you’ll have more newly built options to choose from now versus later on. This may be enough reason to kick off your search.
Just be sure to work with a local real estate agent you know and trust throughout the process. An agent will have valuable insight into builder reputations and other key factors specific to your market. And if there isn’t much new construction near you, they’ll be able to point you toward a nearby area where there is.
Bottom Line
While it’s true new home construction is a bigger segment of the market than the norm, that’s not a bad thing. Builders aren’t overbuilding, and they’re responding to market signals to avoid repeating the mistakes that were made in 2008.
What’s Motivating Your Move?

Thinking about selling your house? As you make your decision, consider what’s pushing you to think about moving. A recent survey from Realtor.com looked into why people want to sell their homes this year. Here are the top two reasons (see graphic below):
Let’s take a closer look and see if they’re motivating you to make a change too.
1. To Make a Profit
If you’re thinking about selling your house, you probably have a lot of questions on your mind. Well, here’s some good news – the latest data shows most sellers get a great return on their investment when they sell. ATTOM, a property data provider, explains:
“. . . home sellers made a $121,000 profit on the typical sale in 2023, generating a 56.5 percent return on investment.”
That’s significant. And here’s one contributing factor. During the pandemic, home prices skyrocketed. There was way more buyer demand than homes available for sale and that combination pushed prices up.
Now, home prices are still rising, just not as fast. That ongoing appreciation is good news for your bottom line. Any profit you make can help offset some of today’s affordability challenges when you buy your next home.
If you want to know how much your house is worth now and what’s going on with prices in your area, talk to a local real estate agent.
2. For Family Reasons
Maybe you want to be near relatives to help take care of older family members or to have more support nearby. Or maybe you’re just eager to spend time together on special occasions like birthdays and holidays.
Selling a house and moving closer to the people who matter the most to you helps keep you connected. If the distance is making you miss out on some big milestones in their lives, it might be time to talk to a local real estate agent to find a place close by. The National Association of Realtors (NAR) says:
“A great real estate agent will guide you through the home search with an unbiased eye, helping you meet your buying objectives while staying within your budget.”
Bottom Line
If you’re thinking about selling your house, there’s probably a good reason for it. Let’s talk so you have help making the right move to reach your goals this year.
Now’s a Great Time To Sell Your House

Thinking about selling your house? If you are, you might be weighing factors like today’s mortgage rates and your own changing needs to figure out your next move.
Here’s something else to consider. According to the latest Home Purchase Sentiment Index (HPSI) from Fannie Mae, the percent of respondents who say it’s a good time to sell is on the rise (see graph below):
Why Are Sellers Feeling so Optimistic?
One reason why is because right now is traditionally the best time of year to sell a house. A recent article from Bankrate says:
“Late spring and early summer are generally considered the best times to sell a house. . . . While today’s rates are relatively high, low inventory is still keeping sellers in the driver’s seat in most markets.”
These are the seasons when most people move. That means buyer demand grows. And because there still aren’t enough homes for sale to meet that demand, sellers see some serious perks. According to Rocket Mortgage:
“Homes that are listed at the end of spring and the beginning of summer typically sell faster at a higher sales price.”
What Does This Mean for You?
More sellers are coming to realize conditions are ripe for a move. And that’s one reason why we’re seeing more homeowners put their homes up for sale. If you think you might want to get in on the action, it’s a good idea to start preparing.
A local real estate agent can help you get your house ready by offering advice on how best to fix it up and make it appealing to buyers in your area.
They also know if you list during the peak buying seasons of spring and early summer, you might sell quickly and for a higher price.
Bottom Line
If you list during the spring and early summer, you might sell your house quickly and for a higher price. When you’re ready to make the most of today’s seller’s market, let’s get in touch.
Is It Getting More Affordable To Buy a Home?

Over the past year or so, a lot of people have been talking about how tough it is to buy a home. And while there’s no arguing affordability is still tight, there are signs it’s starting to get a bit better and may improve even more throughout the year. Elijah de la Campa, Senior Economist at Redfin, says:
“We’re slowly climbing our way out of an affordability hole, but we have a long way to go. Rates have come down from their peak and are expected to fall again by the end of the year, which should make homebuying a little more affordable and incentivize buyers to come off the sidelines.”
Here’s a look at the latest data for the three biggest factors that affect home affordability: mortgage rates, home prices, and wages.
1. Mortgage Rates
Mortgage rates have been volatile this year – bouncing around in the upper 6% to low 7% range. That’s still quite a bit higher than where they were a couple of years ago. But there is a sliver of good news.
Despite the recent volatility, rates are still lower than they were last fall when they reached nearly 8%. On top of that, most experts still think they’ll come down some over the course of the year. A recent article from Bright MLS explains:
“Expect rates to come down in the second half of 2024 but remain above 6% this year. Even a modest drop in rates will bring both more buyers and more sellers into the market.”
Any drop in rates can make a difference for you. When rates go down, you can afford the home you really want more easily because your monthly payment would be lower.
2. Home Prices
The second big factor to think about is home prices. Most experts project they’ll keep going up this year, but at a more normal pace. That’s because there are more homes on the market this year, but still not enough for everyone who wants to buy one. The graph below shows the latest 2024 home price forecasts from seven different organizations:
These forecasts are actually good news for you because it means the prices aren’t likely to shoot up sky high like they did during the pandemic. That doesn’t mean they’re going to fall – they’ll just rise at a slower pace.
3. Wages
One factor helping affordability right now is the fact that wages are rising. The graph below uses data from the Federal Reserve to show how wages have been growing over time:
Check out the blue dotted line. That shows how wages typically rise. If you look at the right side of the graph, you’ll see wages are climbing even faster than normal right now.
Here’s how this helps you. If your income has increased, it’s easier to afford a home because you don’t have to spend as big of a percentage of your paycheck on your monthly mortgage payment.
Bottom Line
If you stack these factors up, you’ll see mortgage rates are still projected to come down a bit later this year, home prices are going up at a more moderate pace, and wages are growing quicker than normal. Those trends are a good sign for your ability to afford a home.
Ways To Use Your Tax Refund If You Want To Buy a Home

Have you been saving up to buy a home this year? If so, you know there are a number of expenses involved – from your down payment to closing costs. But did you also know your tax refund can help you pay for some of these expenses? As Credit Karma explains:
“If one of your goals is to stop renting and buy a home, you’ll need to save up for closing costs and a down payment on the mortgage. A tax refund can give you a start on the road to homeownership. If you’ve already started to save, your tax refund could move you down the road faster.”
While how much money you may get in a tax refund is going to vary, it can be encouraging to have a general idea of what’s possible. Here’s what CNET has to say about the average increase people are seeing this year:
“The average refund size is up by 6.1%, from $2,903 for 2023’s tax season through March 24, to $3,081 for this season through March 22.”
Sounds great, right? Remember, your number is going to be different. But if you do get a refund, here are a few examples of how you can use it when buying a home. According to Freddie Mac:
- Saving for a down payment – One of the biggest barriers to homeownership is setting aside enough money for a down payment. You could reach your savings goal even faster by using your tax refund to help.
- Paying for closing costs – Closing costs cover some of the payments you’ll make at closing. They’re generally between 2% and 5% of the total purchase price of the home. You could direct your tax refund toward these closing costs.
- Lowering your mortgage rate – Your lender might give you the option to buy down your mortgage rate. If affordability is tight for you at today’s rates and home prices, this option may be worth exploring. If you qualify for this option, you could pay upfront to have a lower rate on your mortgage.
The best way to get ready to buy a home is to work with a team of trusted real estate professionals who understand the process and what you’ll need to do to be ready to buy.
Bottom Line
Your tax refund can help you reach your savings goal for buying a home. Let’s talk about what you’re looking for, because your home may be more within reach than you think.