Housing Market Collapse Just Hit Its Worst Level Since 2019

This is a flashing warning sign for society and the eroding away of the American dream. Home ownership just hit its lowest level since 2019. Look, and I think we've first all seen charts like this before. The red line is American's income level and the green line is the income that you would need to qualify for a home, which blew up and got out of reach ever since 2022 from both higher mortgage rates and higher home prices. We all know that. And it takes 120K to qualify today, but I'd like to share some jaw-dropping charts you've never seen that'll make you say, I absolutely cannot believe the housing market that we're living in today. This is wild. Hi, I'm Keith Weinhold, Get Rich Education founder, Forbes Real Estate Council member, and longtime real estate investor. When CBS News said first-time homebuyers are an endangered species in the US, that was actually before anyone even learned from the Census Bureau that the American home ownership rate has now plummeted to its lowest level since 2019. It's 65%, and that's fallen a full 1% just since 2023. This is huge. 1% might not sound like much, but since there are 130 million American households, this translates to about 1.3 million additional renters that weren't there just a couple years ago. So with a home ownership rate down by one percentage point, 66 down to 65%, that's about 1.3 million fewer homeowner households, and those 1.3 million likely become renters, a new horde of renters that's good for landlords, supporting rents and occupancy rates. But since people can't afford to buy homes, who else does that create a problem for? Homebuilders. They are panicking. In fact, and this is wild, homebuilders have made new build homes now cheaper than old existing resale homes today. Yes, you heard that right. Up is down, gravity is broken, and pigs aren't just flying, they have formed an airline. Purple are new homes, green are existing. This marks a big inflection point for the market, reversing the historic trend where new build always command a premium as much as 20% more than existing properties. This shift began during the pandemic and it has really widened the past three months. A new build's median price today is fully $33,500 less than an existing home. Wild. Well, how did this happen? Those very same affordability constraints keep builders from raising their prices. They just simply can't or else buyers cannot afford them. First, builders construct smaller home sizes and put the home on a smaller lot to keep the price down. Second, new build locations can be less central, which lowers land costs. And then third, builders, they have more urgency to sell than mom and pop who aren't running up against corporate sales quotas. Look, every single day that a new build home sits empty on the market, builders have to pay all the carrying costs, taxes and insurance and utilities, and they pay mortgage interest as well. Yet builders, they don't get the benefit of living inside it. So a builder's goal is to move that inventory, no emotion. Conversely, resale sellers, they run on emotion. They'll say things like, oh, we put so much into the kitchen that we can't cut the price. Yeah, resale mom and pop sellers, they might overprice compared to volume-driven builders. And resale sellers, mom and pops, they also won't easily sell their homes tied to a three or 4% mortgage rate that they secured years ago. Now, resale homes actually do have a few advantages over new builds, like you'll get a neighborhood with mature landscaping, but new builds have almost every other advantage that there is. And before I show you a real property address from a builder today to show you how desperate they are and how they've priced it, go ahead and put a like on the video if you like how I'm breaking it down. Really appreciate the thumbs up. Though most times I would not recommend new build for real estate investors that wanna own more rental property for income, today I would. With there being 1.3 million more renters now compared to just a couple years ago, 2023, and that number is only poised to go higher, this marketplace inflection point, I mean, this provides quite an opportunity for those that wanna own new construction property. Compared to existing homes, they offer mortgage rate buy downs. This is what desperate panicked home builders are doing for you today. You've gotta make sure though that the builder is the one buying it down for you. I'm very familiar with a builder that's buying down the rate for you today to five and one quarter percent. Now it was just four and three quarter last week, this does change frequently. Also you get a lower insurance premium on new construction property due to it being built to modern building codes and using today's materials. I have a friend that just bought a new build Florida duplex with an annual insurance premium of $694 like I was talking about with you in another video. You get supercharged energy efficiency in new builds. You also tend to get higher appreciation rates on them than you do with existing property, something that's often overlooked. And of course you get reduced maintenance and repair costs with new build. And then you often see your tenants staying in the property three to four years or even longer because it's hard for them to find anything better. They're the first human to ever live there in that shiny new place. And again, affordability is so soured that they really can't afford to buy, they stay put. This market inflection point, it is a rare window where buying brand new makes more sense than buying someone else's fixer upper dream. And it won't always be this way. Builders will stop offering these incentives and they will raise prices again. But for now, the opportunity is wide open. Here at GRE, we constantly shop the nation for the best deals. Builders are sitting on some golden goose eggs. They'd rather turn that into sold signs and the negotiating is already done. So I'll show you exactly what our GRE investment coaches are helping you with for free. Like I said, some builders have you pay for mortgage rate buy downs. Others only buy down the rate for you for the first year or two of your mortgage payments. But we work with builders where they pay 100% to buy it down and they do that essentially forever. A fixed rate of 5 1⁄4% interest only for the first 10 years, then the rate stays fixed at 5 1⁄4% for the next 30 years as the loan amortizes. Also, two years of free property management, a rental protection program and a builder's warranty, something that you won't get with an existing resale home for sure. Let's take a look. Here's one of their properties, a single family rental. The address is 6022 East Seneca Street in Inverness, Florida. The purchase price is just $279,900 an amazing example of what a builder is willing to do now. Under 300K new build in high growth Florida, projected monthly rent at 1785. It's an inland location in Central Florida with an elevation well above sea level. That's one reason the insurance cost is so low. Inverness is 50 feet above sea level. They do have other properties like this one and you can see why a tenant would want to live here for years. It's a three bed, two bath with 1,402 square feet and a projected cash on cash return of 7.8%. Plus expect long-term returns from appreciation, loan amortization and tax benefits. Expect to put 25% down and then your tenant will pay down your loan like it's their full-time job. This motivated builder also offers duplexes at 399.99 with a combined rent, both sides of the duplex of 2,690. I've been an active real estate investor for over 20 years. I have seen the housing bubble, the crash, the rebound and the Zillow will buy your house over text era. And even I haven't seen incentives like this. And more investors have become keen on the opportunity. In fact, the share of single family home purchases by investors is up. With the affordability crunch, a high growth market and motivated builders like this selling, this is the Goldilocks zone for new construction. Many GRE followers have already locked up multiple properties with this builder. So if you're potentially interested, contact a GRE investment coach for a free strategy session. Book a time on their calendar now at GREinvestmentcoach.com. You can meet over the phone or on Zoom. Take advantage of this unusual time in the market, this anomaly where new build prices are strangely lower than that of existing homes and the hordes of renters are growing. More on the collapse in the home ownership rate here and how the real estate market just changed forever here.