How Housing Market Is Mirroring 2007, According to New Report

Today’s housing market is mirroring what happened in 2007, according to a new report released today.
The National Association of Realtors found the share of new homes purchased in 2024 increased slightly to 15 percent, but existing home purchases declined to 85 percent.
That reflects the same housing market that existed in 2007, when new home purchases also made up roughly 15 percent of the market share and existing homes were 85 percent.
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said this shouldn’t sound the alarm yet though for those concerned it means another Great Recession is on the horizon.
“Before anyone raises the red flag on numbers being similar to 2007, it’s important to note the process of getting a mortgage for a home—be it a new build or existing property—is far more comprehensive than prior to the Great Recession,” Beene told Newsweek. “It’s not so much this time around about the housing market experiencing the same financial conditions as prior to the last housing crash, but rather a mixture of high interest rates and higher prices.”
Most homebuyers today are priced out of the current market and are waiting it out in hopes that interest rates and prices will begin to fall, Beene said.
“The small, but noticeable uptick in new build purchases is more than likely the result of builders offering more aggressive incentives than other properties,” Beene said. “Some builders have offered lower interest rates and prices to get buyers in the doors of new properties.”
Alan Chang, a title and escrow expert, echoed this statement, saying builders have had a big push to incentivize buyers with rate buy-downs or upgrades to ensure inventory is sold as soon as possible.
“With traditional home sellers still wanting to keep their historically low interest rates, the available inventory has still remained low, propping up valuations,” Chang told Newsweek. “Some buyers have seen that new home builds have been an attractive offering due to all of the promotions that builders have put in place. This should be one of the reasons for an increase in new home sales and decrease in existing inventory sales.”
That doesn’t mean the larger housing market is in a solid place, though, Chang said. There’s still limited inventory and a larger affordability crisis.
The median home sale price in the United States today is $428,281, according to Redfin. While that’s a 3.9 percent decline year over year, it still prices out many Americans, especially first-time buyers, from participating in the housing market at all.
“The current housing market continues to be generally unhealthy due to still limited available inventory in many major markets across the nation,” Chang said. “This props up the higher valuations and reduces affordability for first-time home buyers. Less demand and/or more home inventory availability will be the only things that reduce or slow increasing property values as interest rates have stabilized in recent weeks.”