Home Prices Are FALLING, Mortgage Rates Are RISING
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Why are home prices falling while mortgage rates are rising?
Mortgage rates are up, home prices are down.
What
do you need
to know? And Brian, I am so excited about this because I think, I think this is gonna be a little glimmer of hope for a lot of fee people uh that have been overwhelmed and disheartened and frustrated with how difficult it has been to get on the home ownership side of the housing equation.
Before we get into this important stuff, I do think it's important that we make sure we remind everybody, guys, we're doing our millionaire survey right now. Make sure you get in there. We only have what another week left on this. So go check it out and what's what's the website on that, Reebs?
That's a money guy.
Now let's jump Now let's
jump into what what I think is really worth talking about. Bo, there is a slide that just blows my mind. If we could pull that up. Look at this, guys. You know, forever it has seemed like, and this makes common sense to me, is that new homes typically cost more than existing homes because you know, when you buy a new home, you know, hey, nobody's poured grease down this sink. You know, it's it's it's one of the seriously. Yeah, you know, nobody's dog has gone over here and peed on this carpet or in this corner right here. Yeah. Yeah. There is definitely. There are definitely things about that we're in the in historically we're willing to pay a premium for that new house. But I want you to see something here.
Look on this chart, and you'll see here in the last few months, now because of how bad the real estate market is, and we'll get into why this market is so bad. Home builders have realized, hey, we either need to we need to start giving incentives not only on the interest rates, but we need to start dropping prices so we can move inventory. And you have this weird dynamic now where new home prices are actually less than existing home prices. So you're trying to figure out what does this mean?
Yeah, if if you're curious, the median sales for existing homes has dropped now to $429,000. And the median sales price for new homes is down just under about $411,000. So if you look at the numbers, new home prices have dropped about 15% over the past four years. So we've seen sort of a steady, albeit not incredibly fast, but somewhat steady decline. And according to Realtor, the national Median asking price fell for the 10th consecutive month in August. So we've seen a month after month after month after month of houses beginning to fall, of houses begin to go down. Now, I don't want to over overstate this because housing is still expensive and it's still difficult. It's not like we're in a moment where all of a sudden housing affordability is way, way, way, way up.
But I do think these are glimmering. I do think that these are are things that if you are in the market or you are someone who's thinking about buying, thinking about doing this, that your ears should perhaps be perking up because maybe there are some things that you should begin paying attention to.
Well, and also a lot of you might be looking at this chart in just as much awe as me, and you go, Does this just mean that we're in this new d you know, paradigm where existing home prices are gonna be more than new? No. We no, we're just in a place where I think that there is a and we're gonna get into this in a minute. There's a lot of reluctance for your ex your p your sellers to adjust to the new norm. Of what's going on, the reality of the world, and we're gonna give you all the answers so you know what to do to m to to really take advantage of this marketplace as much as you can.
So let's talk about what's actually driving home prices right now. What's the thing that's causing them to move? And number one, we think is that there's actually a growing inventory of homes available in the market across the country. We're starting to now see that inventory begin to catch up with demand that existed as a lot of people were beginning to relocate after COVID, after the pandemic. And it's been this game of catch up that's now finally starting to get
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Chapters
8 chapters
1
Why are home prices falling while mortgage rates are rising?
0:06–11:02
2
How is growing housing inventory affecting home prices?
11:02–18:52
3
What does it mean when new‑construction prices drop below existing‑home prices?
18:52–28:03
4
Is today’s market a buyer’s market or just a buyer’s market with an asterisk?
28:03–34:54
5
How can first‑time buyers assess affordability amid high interest rates?
34:54–41:31
6
What is the 3/5/25 home‑buying rule and how does it protect your finances?
41:31–48:01
7
Should I value my home at purchase price or market value on my net‑worth statement?
48:01–55:43
8
When should I prioritize debt repayment versus saving for a down payment?
55:43–1:04:13