“Building” the future

As you’ll see below, homeownership has hit its lowest rate since 2019. 

There is so much we need to do to turn this situation around, but while many of those reforms might take time, there are some short-term solutions.

Specifically, if you have first-time buyers who are looking to get deals, the answer might lie in new home constructions.

As you’ll see in our first story, home builders are not only cutting prices, but they’re offering massive incentives at a rate that is nearly triple historical levels. 

We dig into that, and more, in today’s Blueprint!

– James and David

Inventory rises, but new home sales lag behind last year

While new single-family home sales rose 0.6% from May to June to a seasonally-adjusted annual rate of 627,000, they are still down 6.6% year-over-year. That’s according to the latest update from the Census Bureau via Zillow. Here are the other key takeaways from June:

• Falling prices: The median sale price fell to $401,800, down 2.9% from a year ago, marking the lowest median price so far this year. 

• High inventory: 511,000 new homes on market, a 9.8-month supply, which is the highest total in recent years and up from 8.4 months last June.

• Regional shift: Only the Midwest saw a year-over-year increase in new home sales, while all others saw drops.

• Builders cutting prices: 37% of builders cut prices, up from 29% last June.

• Home builder PulteGroup spent an average of 8.7% of the final gross sales price on incentives in Q2. That’s up from 8.0% in Q1 2025 and 6.3% in Q2 2024, according to ResiClub. Historically, its typical incentive level ranges from 3.0% to 3.5%.

Our take

Even as demand cools in many markets, major homebuilders are keeping sales alive by ramping up incentives and accepting tighter margins. Look at what PulteGroup is doing. Their spending rose to 8.7% of the final sales price, and D.R. Horton expects to offer slightly bigger incentives in Q4. The goal is clear: keep volume flowing even if it means sacrificing profit per home. With resale inventory rising and affordability still stretched, expect the pressure on builders to keep sweetening the deal. This is why buyers struggling with affordability should look closely at new constructions. That’s where the best deals, especially for first-time buyers, are going to be.

Homeownership rate dips to lowest level since 2019

The U.S. homeownership rate edged down to 65% in Q2 as affordability challenges continue to weigh on buyers. According to realtor.com, that’s the lowest rate since Q3 2019. After peaking in 2020, the rate has hovered between 65% and 66%, held back by high prices and limited affordable supply. Here are the key data points:

• The Midwest leads all regions in homeownership at 69.5%.

• Homeowner vacancy held steady at 1.1%, still tight by historical standards.

• Rental vacancy fell to 7%, with principal cities highest at 7.6%.

• The South had the highest rental vacancy (9%), while the Northeast had the lowest (5.2%).

• Among all demographic groups, only Hispanics saw a year-over-year increase; all other groups declined.

• Homeownership among buyers under 35 dropped to 36.4%, the lowest rate since before the pandemic.

Our take

The low homeownership rate is a clear sign that affordability challenges are still sidelining buyers, especially younger buyers. While inventory is rising, it hasn’t improved affordability enough. Until that changes, many would-be homeowners will remain renters — especially in urban markets where vacancies are climbing. For the long-term health of our industry, agents should be watching this trend closely. They should also be supporting efforts to ease zoning and expand the construction of all types of housing. This is a situation that demands everyone’s attention.

Markets forecast to see highest price appreciation

Zillow just released its updated 12-month home price forecast, and the outlook has turned more bearish. The firm now projects that home prices will decline 1.0% between June 2025 and June 2026, with a steeper 2.0% drop expected for the full calendar year 2025. This shift follows several downward revisions throughout the year, driven by rising inventory levels and persistent affordability challenges.

Among the 300 largest U.S. metros, here are the top five markets Zillow expects to see the strongest and weakest price appreciation over the next 12 months, via ResiClub:

Our take

Zillow’s latest forecast shows just how uneven the market has become. While prices are slipping in overheated or oversupplied markets like Louisiana and parts of Texas, smaller Northeastern and Midwestern metros are still inching up. The pace of change varies widely—some markets are cooling rapidly, while others are holding steady or even posting modest gains. For agents, the key is to focus hyper-locally. Inventory levels, affordability, days on market, and buyer sentiment vary sharply by region, and so should your strategy. Don’t just track national trends. Watch what’s happening in your own MLS. That’s where your edge is.

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Foundation Plans

Advice from James and David to win the day

Over the past few weeks, we’ve focused on the positive steps you can take to set yourself up for success. But avoiding the wrong moves is just as important. That’s why, today and Friday, we’re flipping the script. We’re breaking down the most common reasons why agents fail. In today’s issue, we tackle the first four. We’ll cover the remaining four on Friday. Let’s dive in. 

1. Lack of commitment – There’s no way around it–this business requires hard work. If you’re not willing to put in the work, you will simply get outworked by someone else. There is no halfway. You have to commit. Live and breathe real estate. Go all in. Remember, if you’re halfway in, that also means you’re halfway out.

2. Lack of strategic thinking –  Be a wealth of information, but be strategic in how you communicate it. Listen to your clients and answer the questions they are asking. Your goal is not to be Google, your goal is to customize information for your clients. Know everything you can about real estate – all the key terms, trends, price fluctuations, comps, etc. – but tailor it to their specific needs and wants. The more you can give them info they can use, the more they will feel like you’re the person to help them.

3. Fear of failure – For us, success is failure turned inside out. We’re not telling you to intentionally make mistakes; instead, don’t let the fear of making mistakes debilitate you from taking action. For example, we often have agents ask us many questions about door-knocking. After a few weeks have passed, they’ll ask us more questions about door-knocking. In the meantime, they’ve not door-knocked even one door! Their fear of rejection and making mistakes completely prevents them from taking action. In this business, not everyone will like you or want your services. Many will reject you. But many will also appreciate your efforts, and you’ll become a success because of it. Don’t let the fear and pain of rejection prevent you from achieving your dreams. The rejections and the mistakes are part of the process.  

4. Having no good role models –  Surround yourself with successful and inspiring people. Success breeds success. You don’t have to be like everybody. Some people’s style won’t be true to who you are. Find mentors that you align with and that speak to you. Learn from them and adapt their strategies to your business. Without being self-doubtful and unconfident, remain humble and teachable. That’s the example from Kobe, who constantly worked to improve his craft even though he was already great. Know your limitations, but don’t be defined by them. Learn what you have to do to overcome those limitations to achieve the goals you want. 

As you can tell, we’ve got a lot to say on this topic. We’ll be back Friday with the final four reasons agents fail. In the meantime, what’s holding you back? What questions do you have? Drop us a line – we want to be a resource for you.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“The distance between dreams and reality is called discipline.” — Paulo Coelho

Strive to make your dreams a reality, friends. Discipline—more than motivation—is what will carry you forward. Show up, and take action, even on the days you don’t feel like it. You don’t need to be perfect; just focus on getting a little better every day.

– James and David