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The U.S. housing market is splitting into two very different stories right now. While starter homes are piling up unsold, luxury properties are flying off the market. And, according to Zillow, the gap between the two is only getting wider.
Here are the key points to know:
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Starter homes are stacking up — Inventory is up 4.5% year-over-year as of June, but sales still fell 5.4% in May; buyers aren't showing up even as their options grow.
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Luxury is moving the opposite direction — Inventory dropped 5.2% year-over-year while sales climbed 6.2%, meaning fewer homes are chasing more demand.
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Price cuts tell the same story — 25% of starter listings saw a price cut in June, compared to just 20.6% of luxury listings.
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Prices are still rising at both ends — Starter-home values rose 2.3% year over year to about $202,000, while luxury homes climbed 3.1% to roughly $1.9 million.
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San Francisco shows the extreme version — Luxury sales there jumped 21.6% year-over-year while starter sales slipped 1.2%.
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The root cause is financial, not housing — Stock market gains are propping up high-end buyers, while inflation and a softer job market are squeezing the people who'd normally be buying their first home.
MY TAKE
The real story here isn't housing supply; it's purchasing power. Starter-home buyers have more inventory to choose from, more price cuts, and less competition than they've had in years, yet many still can't afford today's monthly payments. That tells you affordability isn't just about how many homes are available; it's about whether buyers have the income, savings, or financing to act. Meanwhile, wealthier buyers are benefiting from stronger balance sheets and are keeping the luxury market moving. Supply still matters, but this report is a reminder that building more homes alone won't solve affordability if households remain priced out of ownership.
Until Next Week,
Ken
P.S. If you're looking to sell your home in the next few months, my book, 'SELLING SECRETS YOU CAN'T AFFORD TO MISS' needs to be in your hands. I can promise you it will add thousands of dollars to your bank account when selling your home if you follow the advice in the book. You can check it out here ... www.KensSellingSecrets.com.
P.P.S. This is my personal cell phone number and you can reach me personally at any time between 7 AM and 8 PM six days a week ... 951-760-3833.
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