Incentives, Inventory and the Tale of Two Housing Markets
The U.S. housing market is currently split between two speeds: the existing-home market remains stalled due to homeowners locked into low mortgage rates, while the new-home market has outperformed thanks to builders’ flexibility in offering incentives and adjusting prices. For the first time in years, the median price of a new home is now lower than that of an existing home, helping drive demand despite high mortgage rates. However, both markets face growing headwinds from construction costs, tariffs and rising existing-home inventory in markets like Florida and Texas, which may narrow the gap between the two sectors.
According to Kushi, “The housing market is moving at two speeds: one stalled by the mortgage rate lock-in effect, the other fueled by flexibility.”
