Tag: #newhomes

Mid-Year Housing Update

Why some forecasts have changed

If the housing market feels confusing right now, you’re not the only one.

Mortgage rates have risen. Home sales haven’t picked up as much as expected. And many buyers and sellers are wondering when things are going to feel easier or be more affordable.

The truth is: a lot changed over the first half of this year.

Back at the end of 2025, economists were forecasting a much stronger housing market for 2026. They expected mortgage rates to come down, affordability to improve more dramatically, and home sales to rebound.

But inflation, economic uncertainty as evidenced by increased gas and grocery prices, and continuing conflict in the Middle East have combined to push mortgage rates higher than expected. And because rates are staying elevated for longer, some buyers are continuing to hold off.

That’s why the real experts have recently revised their forecasts for the rest of the year (see graph below):

a graph of sales and sales

So, what does this actually mean for you? Let’s break it down.

Mortgage Rates May Remain Elevated

While just about everyone wants mortgage rates to go back to the uppers 5s or low 6s we saw at the start of the year, as of right now, the experts don’t think that’s likely to happen this year.

Instead, forecasts have been updated from the low 6s as originally projected. Many industry organizations are saying rates will stay in roughly the mid 6s this year. The good news is, that’s still lower than rates were a year ago.

Of course, this is based on what we know today. If the conflict overseas comes to an end or inflation drops, this could change. But if you’re waiting for lower rates, it may not pay off in the way you expect.

Existing Home Sales Revised Lower

Back in late 2025, experts expected we’d sell an average of 4.5 million homes this year. Now? That’s dropped down a bit to 4.2 million.

That tells us something important: buyers are still hesitant because affordability remains challenging.

Higher mortgage rates have made monthly payments harder to manage, especially for first-time buyers. And that’s slowed the pace of the market compared to what was originally expected. But even though the forecast was revised down, we’re still expected to sell more homes than last year. 

Once geopolitical tensions resolve and rates begin to settle down, many experts believe that group of buyers will be ready to jump back in. As Lawrence Yun, Chief Economist at NAR, explains:

“There is sizable pent-up demand that could be released into the market.”

There already have been a few glimmers of renewed hope. In recent months, pending homes sale have been improving month over month despite higher rates.

So, if you’re able to afford a home at today’s rates, it could still make sense to buy now. Otherwise, if you wait, you’ll have more competition (and potentially fewer homes to choose from) when those other buyers jump back in.

New Home Sales Also Slowed

Builders also expected to have a stronger year. Earlier forecasts projected new home sales would top 700k in 2026. Now, economists expect we’ll be just shy of that.

Again, mortgage rates are a major reason why.

But the upside for buyers is that builders may be even more motivated to sell. That means builder incentives, negotiation opportunities, and pricing flexibility may continue.

Builders could be more ready to negotiate, and that gives you more leverage to get a better deal.

Home Prices Are Still Expected To Rise

This is one of the most important takeaways from the entire forecast. Even though sales activity is slower, on average, experts did not revise their home price forecast downward.

They still expect prices to rise nationally this year.

Why? Because while buyer demand has softened, the number of homes for sale is still relatively limited overall. That imbalance is helping support prices, even in a slower market.

On Cape Cod, prices remain steady. In many cases, what’s being interpreted as a “drop in prices,” is actually sellers accepting the fact that this is not just a few years ago when it seemed one could list their house at just about any price and find a ready buyer.

And while buyers may think they want to see a drop in prices, generally you feel better about a big purchase when it doesn’t depreciate right away.

Bottom Line

The housing market hasn’t rebounded as quickly as experts originally hoped. But that doesn’t mean it’s stalled.

So don’t see this revision in forecasts as a sign of trouble. See it as a temporary reaction to overall conditions and uncertainty.

If you have selling — or buying — on your mind, we’re happy to walk you through your options. You can always find us at 508-388-1994 (Mari and Hank) or Colleen (781-264-5517.)

Let’s talk soon…

Mari, Hank, and Colleen

Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.

Did Uncle Bob Give You Bad Advice This Weekend?

Everyone loves to talk about the real estate market.

We hope you were able to enjoy the Labor Day Weekend with family and friends.

When people get together it’s pretty common for them to talk about the issues of the day and everyone loves to talk about the real estate market.

Your Uncle Bob who “knows a little something about real estate” may have commented over the weekend that new home inventory is at its highest level since the crash. And that was a bad sign.

If you lived through the crash back in 2008, hearing that new construction is up may feel a little scary.

But here’s what you need to remember: a lot of what you see online is designed to get clicks. Of course, the more sensational the more likely the headline is to be repeated by people like your Uncle Bob. (With all due respect to everyone’s Uncle Bob!)

So, you may not be getting the full story. A closer look at the data and a little expert insight can change your perspective completely.

Why This Isn’t Like 2008

While it’s true the number of new homes on the market hit its highest level since the crash, that’s not a reason to worry. That’s because new builds are just one piece of the puzzle. They don’t tell the full story of what’s happening today.

To get the real picture of how much inventory we have and how it compares to the surplus we saw back then, you’ve got to look at both new homes and existing homes (homes that were lived in by a previous owner).

When you combine those two numbers, it’s clear overall supply  looks very different today than it did around the crash (see graph below):

So, saying we’re near 2008 levels for new construction isn’t the same as the inventory surplus we had the last time.

Builders Have Actually Underbuilt for Over a Decade

And here’s some other important perspective you’re not going to get from those headlines. After the 2008 crash, builders slammed on the brakes. For 15 years, they didn’t build enough homes to keep up with demand. That long stretch of underbuilding created a major housing shortage, which we’re still dealing with today.

The graph below uses Census data to show the overbuilding leading up to the crash (in red), and the period of underbuilding that followed (in orange):

Basically, we had more than 15 straight years of underbuilding – and we’re only recently starting to slowly climb out of that hole. But there’s still a long way to go (even with the growth we’ve seen lately). Experts at Realtor.com say it would roughly 7.5 years to build enough homes to close the gap.

Of course, like anything else in real estate, the level of supply and demand is going to vary by market. Some markets may have more homes for sale, some less. But nationally, this isn’t like the last time.

Bottom Line

Just because there are more new homes for sale right now, it doesn’t mean we’re headed for a crash. The data shows today’s overall inventory situation is different.

If you have questions or want to talk about what builders are doing on Cape Cod, let’s connect at 508-388-1994 or msennott@todayrealestate.com.

We’ll talk to Uncle Bob, too!

Mari and Hank

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.