Today’s Biggest Housing Market Myths

Today’s Biggest Housing Market Myths

Have you ever heard the phrase, "don’t believe everything you hear"? That’s especially true if you’re thinking about buying or selling a home in today’s housing market. There’s a lot of misinformation out there, making it more important than ever to have someone you can trust for accurate information.

If you partner with a real estate agent, they can clear up common misconceptions and provide reassurance by backing up their insights with research-driven facts. Here are just a few misconceptions they can help disprove.

1. I’ll Get a Better Deal Once Prices Crash

If you’ve heard that home prices are going to come crashing down, it’s time to take a closer look at what’s actually happening. While prices can vary by local market, data from numerous sources shows that a crash is unlikely. Unlike in 2008, when there was a dramatic oversupply of homes leading to a price crash, today we face an undersupply of homes for sale. This creates a very different market scenario (see chart below):

So, if you’re thinking that waiting will score you a deal, be aware that data shows there’s no crash on the horizon. Waiting isn’t likely to pay off the way you’d hoped.

2. I Won’t Be Able To Find Anything To Buy

If the fear of finding the right home if you move is still holding you back, it’s likely you haven’t spoken with an expert real estate agent lately. Throughout the year, the supply of homes for sale has increased. Data from Realtor.com puts this into context: while there are still fewer homes on the market compared to a more typical year like 2019, inventory is still higher than it was at this time last year (see graph below):

So, if you’re recalling all the media coverage about record-low supply during the pandemic, you can rest a bit easier. While the market hasn’t fully returned to normal, inventory is moving in a healthier direction. As your options improve, you can let go of this outdated myth—finding a home to buy won’t feel as impossible anymore.

3. I Have To Wait Until I Have Enough for a 20% Down Payment

Many people still believe you need a 20% down payment to buy a home. To illustrate just how widespread this myth is, Fannie Mae says:

“Approximately 90% of consumers overstate or don’t know the minimum required down payment for a typical mortgage.”

And if you look at the data from the National Association of Realtors (NAR), you’ll see that the typical homeowner isn’t putting down as much as you might expect (see graph below):

First-time homebuyers are typically only putting down 6%, which is far less than the 20% many people believe they need. If you’re looking at the graph and noticing that repeat buyers tend to put down closer to 20%, it’s important to understand that this is often because they have built up significant equity in their current home, allowing them to make a larger down payment on their next property.

This highlights that a 20% down payment isn’t necessary unless specified by your loan type or lender. Many people put down much less. Depending on the type of home loan you choose, you may only need to put down 3.5% or even 0%. So, if you’re buying your first home, you likely don’t need nearly as much for a down payment as you might think.

An Agent’s Role in Fighting Misconceptions

If you've put your move on hold because you’ve heard one or more of these myths, it’s time to talk to a trusted agent. An expert agent can provide you with the data and facts, like those shared here, to reassure you and help dispel any misconceptions that may be holding you back.

Bottom Line

If you have questions about what you’re hearing or reading, let’s connect. You deserve someone you can trust to provide the facts.