Today’s Biggest Housing Market Myths

<article class="post-1166284 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-1166284"><span class="entry-date">August 22, 2024</span><div class="entry-header center-block text-center"><h1 class="entry-title">Today’s Biggest Housing Market Myths</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Today%E2%80%99s+Biggest+Housing+Market+Myths&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Ftodays-biggest-housing-market-myths%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Today’s Biggest Housing Market Myths Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20240822-Today-s-Biggest-Housing-Market-Myths-original.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width=""/>
<p>Have you ever heard the phrase: don’t believe everything you hear? That’s especially true if you’re thinking about <a href="https://www.simplifyingthemarket.com/2024/07/19/the-biggest-mistakes-homebuyers-are-making-right-now/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buying</a> or <a href="https://www.simplifyingthemarket.com/2024/07/30/the-biggest-mistakes-sellers-are-making-right-now/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">selling</a> a home in today’s <a href="https://www.simplifyingthemarket.com/2024/08/02/3-reasons-why-were-not-headed-for-a-housing-crash/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">housing market</a>. There’s a lot of <a href="https://www.simplifyingthemarket.com/2024/07/12/how-do-presidential-elections-impact-the-housing-market-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">misinformation</a> out there. And right now, making sure you have someone you can go to for trustworthy information is extra important.</p>
<p>If you partner with a <a href="https://www.simplifyingthemarket.com/2024/08/20/how-to-choose-a-great-local-real-estate-agent/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">real estate agent</a>, they can clear up some common misconceptions and reassure you by backing them up with research-driven facts. Here are just a few misconceptions they can help disprove.</p>
<h4><strong>1. I’ll Get a Better Deal Once Prices Crash</strong></h4>
<p>If you’ve heard <a href="https://www.simplifyingthemarket.com/2024/07/29/are-home-prices-going-to-come-down/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a> are going to come <a href="https://www.simplifyingthemarket.com/2024/08/02/3-reasons-why-were-not-headed-for-a-housing-crash/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">crashing down</a>, it’s time to look at what’s actually happening. While prices vary by local market, there’s a lot of data out there from numerous sources that shows a crash is not going to happen. Back in 2008, there was a dramatic oversupply of homes that led to <a href="https://www.simplifyingthemarket.com/2024/06/12/home-prices-arent-declining-but-headlines-might-make-you-think-they-are/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">prices</a> crashing. Across the board, there’s an <a href="https://www.simplifyingthemarket.com/2024/07/08/not-a-crash-3-graphs-that-show-how-todays-inventory-differs-from-2008/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">undersupply</a> of homes <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" rel="noopener noreferrer" target="_blank">for sale</a> today. That makes this market a whole different scenario (<em>see chart below</em>):</p>
<p><a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240820/20240822-Why-Today-s-Inventory-Won-t-Make-Home-Prices-Crash-original.png" rel="noopener noreferrer" target="_blank"><img alt="No Caption Received" decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240820/20240822-Why-Today-s-Inventory-Won-t-Make-Home-Prices-Crash-original.png"/></a>So, if you think waiting will score you a deal, know that <a href="https://www.census.gov/construction/nrc/current/index.html" rel="noopener noreferrer" target="_blank">data</a> shows there’s <a href="https://www.attomdata.com/news/most-recent/u-s-foreclosure-activity-increases-quarterly-in-q1-2024/" rel="noopener noreferrer" target="_blank">not a crash</a> on the horizon, and waiting isn’t going to pay off the way you’d hoped.</p>
<h4><strong>2. I Won’t Be Able To Find Anything To Buy</strong></h4>
<p>If this nagging fear about finding the right home if you move is still holding you back, you probably haven’t talked with an expert <a href="https://www.simplifyingthemarket.com/2024/07/15/why-working-with-a-real-estate-professional-is-crucial-right-now/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">real estate agent</a> lately. Throughout the year, the supply of <a href="https://www.simplifyingthemarket.com/2024/08/12/are-there-more-homes-for-sale-where-you-live/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">homes for sale</a> has grown. <a href="https://www.realtor.com/research/july-2024-data/" rel="noopener noreferrer" target="_blank">Data</a> from <em>Realtor.com </em>helps put this into context. While there are still fewer homes on the market than in a more normal year like 2019, inventory is still above where it was at this time last year (<em>see graph below</em>):</p>
<p><a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240820/20240822-The-Supply-of-Homes-for-Sale-Is-Improving-original.png" rel="noopener noreferrer" target="_blank"><img alt="No Caption Received" decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240820/20240822-The-Supply-of-Homes-for-Sale-Is-Improving-original.png"/></a>So, if you’re remembering all that media coverage about record-low supply during the pandemic, you can rest a bit easier. While the market isn’t back to normal just yet, inventory is moving in a healthier direction. And that means as your <a href="https://www.simplifyingthemarket.com/2024/08/08/where-will-you-go-after-you-sell/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">options improve</a>, you can let go of this now outdated myth because finding a home to buy won’t feel quite so impossible anymore.</p>
<h4><strong>3. I Have To Wait Until I Have Enough for a 20% Down Payment</strong></h4>
<p>Many people still believe you need a 20% down payment to buy a home. To show just how widespread this myth is, <a href="https://www.fanniemae.com/media/52106/display" rel="noopener noreferrer" target="_blank"><em>Fannie Mae</em></a><em> </em>says:</p>
<blockquote><p><em>“Approximately 90% of consumers overstate or don’t know the minimum required down payment for a typical mortgage.”</em></p></blockquote>
<p>And if you look at <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" target="_blank">the data</a> from the <em>National Association of Realtors </em>(NAR), you can see the typical homeowner isn’t putting down as much as you might expect (<em>see graph below</em>):</p>
<p><a href="https://www.simplifyingthemarket.com/2024/07/16/how-to-determine-if-youre-ready-to-buy-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240820/20240822-Today-s-Median-Down-Payment-Is-Less-Than-20percent-original.png"/></a></p>
<p><a href="https://www.simplifyingthemarket.com/2024/07/16/how-to-determine-if-youre-ready-to-buy-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">First-time homebuyers</a> are typically only putting down 6%. That’s far less than the 20% so many people think they need. And if you’re looking at that graph and you’re more focused on how the number for repeat <a href="https://www.simplifyingthemarket.com/2024/07/18/unlocking-homebuyer-opportunities-in-2024/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buyers</a> is closer to 20%, here’s what you need to realize. That’s only because they have so much <a href="https://www.simplifyingthemarket.com/2024/08/05/what-every-homeowner-should-know-about-their-equity/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">equity</a> built up in their current house that can be used to make a larger down payment for their next move.</p>
<p>This goes to show you don’t have to put 20% down, unless it’s specified by your loan type or lender. Many people put down a lot less. Not to mention, depending on the type of home loan you get, you may only need to put <a href="https://www.benefits.gov/benefit/504" rel="noopener noreferrer" target="_blank">3.5%</a> or even <a href="https://www.benefits.gov/benefit/504" rel="noopener noreferrer" target="_blank">0%</a> <a href="https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program" rel="noopener noreferrer" target="_blank">down</a>. So, if you’re buying your <a href="https://www.simplifyingthemarket.com/2024/07/22/how-affordability-and-remote-work-are-changing-where-people-live/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">first home</a>, you likely don’t need nearly as much for your down payment as you may think.</p>
<h4><strong>An Agent’s Role in Fighting Misconceptions</strong></h4>
<p>If you put your move on pause because you heard one or more of these <a href="https://www.simplifyingthemarket.com/2024/06/17/do-elections-impact-the-housing-market/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">myths</a> yourself, it’s time to talk to a trusted agent. An expert agent has more data and the facts, just like this, to reassure you and help break through any misconceptions that may be holding you back.</p>
<h3>Bottom Line</h3>
<p>If you have questions about what you’re hearing or reading, connect with a real estate agent. You deserve to have someone you can trust to get the facts.</p>
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