Latest news with #homebuyers
Forbes
16 hours ago
- Business
- Forbes
Mortgage Rates Today: July 29, 2025
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Today's average mortgage rate on a 30-year fixed-rate mortgage is 6.72%, up 0.60% from the previous week, according to the Mortgage Research Center. Borrowers may be able to save on interest costs by going with a 15-year fixed mortgage, which will often have a lower rate than a 30-year, fixed-rate home loan. The average APR on a 15-year fixed mortgage is 5.74%. However, a 15-year mortgage means you are paying off the house in half the amount of time compared to a 30-year term, so your monthly payments will be higher. If you want to refinance your existing mortgage, check out the average refinance rate . Today's average rate on a 30-year mortgage (fixed-rate) slipped to 6.72% from 6.73% yesterday. One week ago, the 30-year fixed was 6.68%. The 30-year fixed mortgage APR moved up to 6.75%. At this time last week, it was 6.71%. Here's why APR is important. At today's interest rate of 6.72%, homebuyers will pay $647 per month in principal and interest (taxes and fees not included) for every $100,000 borrowed on their 30-year fixed-rate mortgage, the Forbes Advisor mortgage calculator shows. You'd pay around $133,567 in total interest over the life of the loan per $100,000 borrowed. Today's 15-year mortgage (fixed-rate) is 5.69%, up 0.30% from the previous week. The same time last week, the 15-year, fixed-rate mortgage was at 5.67%. The APR on a 15-year fixed is 5.74%. It was 5.72% a week earlier. A 15-year, fixed-rate mortgage with today's interest rate of 5.69% will cost $827 per month in principal and interest on a $100,000 mortgage (not including taxes and insurance). In this scenario, borrowers would pay approximately $49,368 in total interest. The current average interest rate on a 30-year, fixed-rate jumbo mortgage (a mortgage above 2025's conforming loan limit of $806,500 in most areas) is 6.93%—0.33% higher than last week. A 30-year jumbo mortgage at today's fixed interest rate of 6.93% will cost you $660 per month in principal and interest per $100,000. That adds up to roughly $138,205 in total interest over the life of the loan. Mortgage rates initially trended downward post-spring 2024. However, they surged again in October 2024—despite cuts by the Federal Reserve to the federal funds rate (its benchmark interest rate) in September, November and December 2024. Rates began to drop again in mid-January 2025, but experts don't forecast them falling by a significant amount in the near future. Mortgage rates are influenced by various economic factors, making it difficult to predict when they will drop . Mortgage rates follow U.S. Treasury bond yields. When bond yields decrease, mortgage rates generally follow suit. The Federal Reserve's decisions and global events also play a key role in shaping mortgage rates. If inflation rises or the economy slows, the Fed may lower its federal funds rate. For example, during the Covid-19 pandemic, the Fed reduced rates, which drove interest rates to record lows. A significant drop in mortgage rates seems unlikely in the near future. However, they may decline if inflation eases or the economy weakens. The Federal Reserve's restrictive monetary policy – including its interest rate hikes, which it's using to restrain inflation – is the primary factor that's pushing long-term mortgage rates higher. The state of the economy and housing market also affects mortgage rates. As for what interest rate the lender might offer you, this depends on your debt-to-income (DTI) ratio and credit score, both of which indicate your risk as a borrower. Related: Mortgage Rates Forecast And Trends Shop around and talk to various lenders to get a sense of each company's mortgage loan offerings and services. Don't go with the first lender quote you receive; instead, compare the best mortgage rate quotes to get a deal. In particular, consider what fees they charge, what fees they're willing to waive and what closing assistance they might provide. Make sure any special offers or discounts don't come at the cost of a higher mortgage rate. Be sure to apply with each lender within a 45-day window. During this window, you can have multiple lenders pull your credit history without additional impact on your credit score. Mortgage rates remain elevated, and the nation's housing supply remains limited. The low inventory is preventing house prices from dropping. Meanwhile, the combination of high mortgage rates and appreciated home values will continue to present an obstacle for many prospective homebuyers seeking affordable housing. Mortgage interest rates are determined by several factors, including some that borrowers can't control: Federal Reserve. The Fed rate hikes and decreases adjust the federal funds rate, which helps determine the benchmark interest rate that banks lend money at. As a result, mortgage rates tend to move in the same direction with the Fed's rate decision. The Fed rate hikes and decreases adjust the federal funds rate, which helps determine the benchmark interest rate that banks lend money at. As a result, mortgage rates tend to move in the same direction with the Fed's rate decision. Bond market. Mortgages are also loosely connected to long-term bond yields as investors look for income-producing assets—specifically, the 10-year U.S. Treasury Bond. Home loan rates tend to increase as bond prices decrease, and vice versa. Mortgages are also loosely connected to long-term bond yields as investors look for income-producing assets—specifically, the 10-year U.S. Treasury Bond. Home loan rates tend to increase as bond prices decrease, and vice versa. Economic health. Rates can increase during a strong economy when consumer demand is higher and unemployment levels are lower. Anticipate lower rates as the economy weakens and there is less demand for mortgages. Rates can increase during a strong economy when consumer demand is higher and unemployment levels are lower. Anticipate lower rates as the economy weakens and there is less demand for mortgages. Inflation. Banks and lenders may increase rates during inflationary periods to slow the rate of inflation. Additionally, inflation makes goods and services more expensive, reducing the dollar's purchasing power. While the above factors set the base interest rate for new mortgages, there are several areas that borrowers can focus on to get a lower rate: Credit score. Applicants with a credit score of 670 or above tend to have an easier time qualifying for a better interest rate. Typically, most lenders require a minimum score of 620 to qualify for a conventional mortgage. Applicants with a credit score of 670 or above tend to have an easier time qualifying for a better interest rate. Typically, most lenders require a minimum score of 620 to qualify for a conventional mortgage. Debt-to-income (DTI) ratio. Lenders may issue mortgages to borrowers with a DTI of 50% or less. However, applying with a DTI below 43% is recommended. Lenders may issue mortgages to borrowers with a DTI of 50% or less. However, applying with a DTI below 43% is recommended. Loan-to-value (LTV) ratio. Conventional home loans charge private mortgage insurance when your LTV exceeds 80% of the appraisal value, meaning you need to put at least 20% down to avoid higher rates. Additionally, FHA mortgage insurance premiums expire after the first 11 years when you put at least 10% down. Conventional home loans charge private mortgage insurance when your LTV exceeds 80% of the appraisal value, meaning you need to put at least 20% down to avoid higher rates. Additionally, FHA mortgage insurance premiums expire after the first 11 years when you put at least 10% down. Loan term. Longer-term loans such as a 30-year or 20-year mortgage tend to charge higher rates than a 15-year loan term. However, your monthly payment can be more affordable over a longer term. Longer-term loans such as a 30-year or 20-year mortgage tend to charge higher rates than a 15-year loan term. However, your monthly payment can be more affordable over a longer term. Residence type. Interest rates for a primary residence can be lower than a second home or an investment property. This is because the lender of your primary mortgage receives compensation first in the event of foreclosure. As you compare lenders, consider getting rate quotes for several loan programs. In addition to comparing rates and fees, these programs can have flexible down payment and credit requirements that make qualifying easier. Conventional mortgages are likely to offer competitive rates when you have a credit score between 670 and 850, although it's possible to qualify with a minimum score of 620. This home loan type also doesn't require annual fees when you have at least 20% equity and waive PMI. Several government-backed programs are better when you want to make little or no down payment: FHA loans. Borrowers with a credit score above 580 only need to put 3.5% down and applicants with credit scores ranging from 500 to 579 are only required to make a 10% down payment with FHA loans. Borrowers with a credit score above 580 only need to put 3.5% down and applicants with credit scores ranging from 500 to 579 are only required to make a 10% down payment with VA loans. Servicemembers, veterans and qualifying spouses don't need to make a down payment when the sales price is less than the home's appraisal value. VA loan credit requirements vary by lender. Servicemembers, veterans and qualifying spouses don't need to make a down payment when the sales price is less than the home's appraisal value. credit requirements vary by lender. USDA loans. Applicants in eligible rural areas can buy or build a home with no money down using a USDA loan . Moderate-income borrowers can qualify for a 30-year fixed-rate term through the Guaranteed Loan Program. Further, buyers with a very low or low income can receive a 33-year term and payment assistance is available through the agency's Direct Loans program. Credit requirements differ by lender. Frequently Asked Questions (FAQs) Comparing lenders and loan programs is an excellent start. Borrowers should also strive for a good or excellent credit score between 670 and 850 and a debt-to-income ratio of 43% or less. Further, making a minimum down payment of 20% on conventional mortgages can help you automatically waive private mortgage insurance premiums, which increases your borrowing costs. Buying discount points or lender credits can also reduce your interest rate. The Federal Reserve's efforts to stabilize the economy during the Covid-19 pandemic drove the historically low rates. As the economy recovers, the unemployment rate decreases and inflation is controlled, rates may dip below current levels, but they're unlikely to fall as low as 3% again anytime soon. A mortgage interest rate reflects what a lender is charging you on top of your loan amount in return for allowing you to borrow money. Annual percentage rate (APR) , on the other hand, is a calculation that includes both a loan's interest rate and finance charges, expressed as an annual cost over the life of the loan. In other words, it's the total cost of credit. APR accounts for interest, fees and time. Since APRs include both the interest rate and certain fees associated with a home loan, the APR can help you understand the total cost of a mortgage if you keep it for the entire term. The APR will usually be higher than the interest rate, but there are exceptions.
CNET
18 hours ago
- Business
- CNET
Mortgage Rates Go Down Over the Last Week: Today's Mortgage Rates on July 29, 2025
Check out CNET Money's weekly mortgage rate forecast for a more in-depth look at what's next for Fed rate cuts, labor data and inflation. The average interest rate for a standard 30-year fixed mortgage is 6.79% today, down -0.06% compared to one week ago. The average rate for a 15-year fixed mortgage is 5.99%, which is a decrease of -0.08% from the same time last week. To qualify for lower mortgage rates, experts recommend making a higher down payment, improving your credit and comparison shopping between lenders. Mortgage rates have stayed high in 2025. Stubborn inflation, threats of a global trade war and policy turbulence have created an uncertain economic outlook. In response, the Federal Reserve has adopted a wait-and-see approach and holding borrowing rates steady since the start of the year. Most economists predict the Fed will start lowering rates in September, particularly if President Trump eases some of his aggressive tariff measures or if the labor market continues to deteriorate. Prospective homebuyers shouldn't bank on mortgage rates becoming affordable overnight. While cheaper borrowing costs gradually trickle down to the housing market, the Fed doesn't directly set lenders' mortgage rates. In today's unaffordable housing market, mortgage rates are just one piece of the puzzle. Prospective buyers still have to contend with high home prices and skyrocketing homeownership expenses. The possibility of a job-loss recession is also pushing many households to tighten their budgets and take on less financial risk. When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders. About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates. Recent mortgage rate trends The average 30-year fixed rate has hovered just below 7% for the last several months, resulting in cost-prohibitive monthly payments. Mortgage rates primarily take their cues from the 10-year Treasury yield, which reflects investors' collective expectations regarding inflation, labor market health, upcoming monetary policy shifts and the impact of global factors like tariffs. If investors anticipate persistently high inflation or significant government borrowing, they'll demand higher returns on their bonds, which in turn keeps mortgage rates elevated. "Rates could fall if inflation keeps cooling and the labor market softens," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. "On the other hand, tariffs could create new inflation pressure. Add in government deficits and increased bond supply, and that puts upward pressure on rates." Even as the Fed eventually starts to lower interest rates, experts caution that significant market volatility is likely. As a result, homebuyers are adopting a more patient and strategic approach to financing, comparing various loan types and planning ahead. "Some are waiting, others are getting pre-approved now so they're ready to act if rates fall," said Smith. For a look at mortgage rate movement in recent years, see the chart below. Mortgage interest rate projections While the housing market was expected to rebound in 2025, it has remained stagnant due to ongoing economic and political uncertainties. Median family income has not kept pace with the surge in housing costs, requiring many households to earn double or triple their salary to afford a modest home in some cities. Mortgage rates would have to drop significantly, close to 6% or below, to drum up significant homebuying demand. According to Smith, though, the more likely scenario is for rates to inch down slowly and steadily. A return to the record-low rates, around 2-3%, we saw during the pandemic would only happen if the economy tipped into a severe recession. Fannie Mae's forecast puts rates around 6.5% by the end of 2025 and 6.1% by the end of 2026. Experts say numerous risks could keep upward pressure on mortgage rates. For instance, if tariffs cause inflation to reignite, which most experts and Fed officials expect, it could result in higher bond yields and fewer interest rate cuts by the central bank. Both would be bad for mortgage rates. How can I choose a mortgage term? Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront. 30-year fixed-rate mortgages The average 30-year fixed mortgage interest rate is 6.79% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you'll have a lower monthly payment. 15-year fixed-rate mortgages Today, the average rate for a 15-year, fixed mortgage is 5.99%. Though you'll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner. 5/1 adjustable-rate mortgages A 5/1 adjustable-rate mortgage has an average rate of 6.07% today. You'll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option. Calculate your monthly mortgage payment Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET's mortgage calculator below can help homebuyers prepare for monthly mortgage payments. How can I get the lowest mortgage rates? Though mortgage rates and home prices are high, the housing market won't be unaffordable forever. It's always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right. Save for a bigger down payment: Though a 20% down payment isn't required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
News.com.au
a day ago
- Business
- News.com.au
Unique Templestowe house above 8m void hits market for $1m
A Templestowe house that soars above an about 8m-high drop has Melbourne homebuyers polarised. With a $1m-$1.1m asking price it's just a fraction of the $1.65m buyers typically pay for a perch in the suburb. But its unusual design, that leaves a significant portion of the residence and its balcony hovering above a towering void, has buyers asking if 'it's safe and secure'. Built by its owner architect in the 1990s and balanced on the bricks and mortar of its lower-ground garage and a series of Karri timber stilts, the 39 Lawanna Drive home is being sold for the first time since its construction. And Jellis Craig Doncaster's Chris Savvides said its vertigo-inducing views were the central focus for buyers, and its unusual design was the reason behind its bargain price tag — confirming the reserve would be within the quoted range on auction day next month. So far it's had 'strong interest' with 45 groups through its first open for inspection on Saturday — mostly a mix of inner-city professionals aged from their late 20s to 40s. While it wasn't for everyone, Mr Savvides said those who did like it were taking a very close look at the unusual residence. 'I've never seen anything like this, there's no comparisons … but people are intrigued by it,' Mr Savvides said. 'The view is amazing, but people are saying they're not sure (about how it achieves the view). 'And It's nor for young kids, or the elderly.' The agent said he's getting a lot of questions about whether 'it's safe and secure'. And is referring those questions to the vendors more than $120,000 effort to refit and renew the home's incredible rear balcony. The home has also stood in place since the early 90s, with its architect builder buying it as a steeply sloping block of land for just $88,300 in 1988 — then building the eye-catching residence. It's still standing after a number of earthquakes, one as nearby as Sunbury in 2023, as well as countless storms that have followed its construction. Mr Savvides said braver buyers in sturdy footwear had been walking down to the bottom of the block to get a feel for the mammoth height the home stands above ground — estimated to be around 8m and close to twice the height of the main residence. The previous owners very much embraced the height, with the living area and even the main bedroom both positioned to make the most of the views. Mr Savvides said the next owners were also likely to be looking at ways to fill in some of the negative space beneath the house — though the existing lower-ground level would already suit for conversion to a unit, home office or as is for a car enthusiast. The 966sq m property is slated for auction at 2pm on August 16.
CNET
2 days ago
- Business
- CNET
Mortgage Rates Ease Ahead of Fed Meeting: Today's Rates, July 28, 2025
Check out CNET Money's weekly mortgage rate forecast for a more in-depth look at what's next for Fed rate cuts, labor data and inflation. The average for a 30-year fixed mortgage is 6.77% today, a decrease of -0.04% since one week ago. The average rate for a 15-year fixed mortgage is 5.96%, which is a decrease of -0.07% compared to a week ago. To secure a lower mortgage interest rate, consider increasing your down payment, improving your credit score or purchasing mortgage points. What's behind high rates these days? Concerns about persistent inflation, threats of a global trade war and policy turbulence have created an uncertain economic outlook. In response, the Federal Reserve has adopted a wait-and-see approach and left interest rates unchanged this year. Financial markets largely expect the Fed to resume lowering rates in September, particularly if President Trump eases some of his aggressive tariff measures or if the labor market continues to deteriorate. Prospective homebuyers shouldn't expect mortgage rates to become affordable overnight. While cheaper borrowing costs gradually trickle down to the housing market, the Fed doesn't directly set lenders' mortgage rates. In today's unaffordable housing market, mortgage rates are just one piece of the puzzle. High home prices and skyrocketing homeownership expenses, like insurance and property taxes, are further compounding the pressure on prospective buyers. The possibility of a job-loss recession is also pushing many households to tighten their budgets and take on less financial risk. When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders. About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates. What's behind today's high mortgage rates? The average 30-year fixed rate has hovered just below 7% for the last several months, resulting in cost-prohibitive monthly payments. Mortgage rates primarily take their cues from the 10-year Treasury yield, which reflects investors' collective expectations regarding inflation, labor market health, upcoming monetary policy shifts and the impact of global factors like tariffs. If investors anticipate persistently high inflation or significant government borrowing, they'll demand higher returns on their bonds, which in turn keeps mortgage rates elevated. "Rates could fall if inflation keeps cooling and the labor market softens," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. "On the other hand, tariffs could create new inflation pressure. Add in government deficits and increased bond supply, and that puts upward pressure on rates." Even as the Fed eventually starts to reduce borrowing rates, experts caution that significant market volatility is likely. As a result, homebuyers are adopting a more patient and strategic approach to financing, comparing various loan types and planning ahead. "Some are waiting, others are getting pre-approved now so they're ready to act if rates fall," said Smith. For a look at mortgage rate movement in recent years, see the chart below. Mortgage rate forecast for 2025 While the housing market was expected to rebound in 2025, it has remained stagnant due to ongoing economic and political uncertainties. Median family income has not kept pace with the surge in housing costs, requiring many households to earn double or triple their salary to afford a modest home in some cities. Mortgage rates would have to drop significantly, close to 6% or below, to drum up significant homebuying demand. According to Smith, though, the more likely scenario is that interest rates will take modest and gradual steps down over the coming months. A return to the record-low rates, around 2-3%, we saw during the pandemic would only happen if the economy tipped into a severe recession. Fannie Mae now predicts rates around 6.5% by the end of 2025 and 6.1% by the end of 2026. Ongoing uncertainty could cause rates to stay high, or increase further. For instance, if tariffs cause inflation to reignite, which most experts and Fed officials expect, it could result in higher bond yields and fewer interest rate cuts by the central bank. Both would be bad for mortgage rates. What is a good mortgage type and term? Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront. 30-year fixed-rate mortgages The average interest rate for a standard 30-year fixed mortgage is 6.77% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you'll have a lower monthly payment. 15-year fixed-rate mortgages Today, the average rate for a 15-year, fixed mortgage is 5.96%. Though you'll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner. 5/1 adjustable-rate mortgages A 5/1 adjustable-rate mortgage has an average rate of 6.03% today. You'll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option. Calculate your monthly mortgage payment Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET's mortgage calculator below can help homebuyers prepare for monthly mortgage payments. Where can I find the best mortgage rates? Though mortgage rates and home prices are high, the housing market won't be unaffordable forever. It's always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right. Save for a bigger down payment: Though a 20% down payment isn't required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
Yahoo
2 days ago
- Business
- Yahoo
Homebuyers Can Save $200K by Building a New Home Instead of Buying an Existing One in This State
With affordability being a top concern for many prospective homebuyers, those worried about a steep price tag might consider investing in a new build. In California, homebuyers could save hundreds of thousands of dollars by building new rather than purchasing an existing property, according to a new LendingTree report. It revealed that, though, on average, new homes cost more than existing ones across the country, a select few states offer new construction that is significantly more affordable than existing properties. In California, newly constructed homes have a median price of $591,116, while existing homes cost $784,798—a difference of $193,682 more, according to LendingTree. Using data from the National Association of Home Builders and the U.S. Census Bureau 2023 American Community Survey, LendingTree was able to estimate the household income needed for existing homes. Then, it compared the household income required to buy new homes and existing homes by state. This trend is particularly relevant in today's market, where shifting economic sentiment is beginning to shape buyer behavior. 'Many buyers, first-time buyers, or entry-level buyers, instead of just looking at single-family homes or existing homes, are looking at new homes put out by developers and builders,' Oscar Wei, deputy chief economist at the California Association of Realtors, tells Overall, California's median home price dipped to $899,560 in June, marking a second consecutive monthly decline and falling below $900,000 for the first time in three months, as per the California Association of Realtors June Home Sales report. 'The market is a little bit more balanced because we do have a bit more supply in the last few months,' he explains. 'Buyers are thinking, 'OK, well, now we have a little bit more inventory available.' And even though mortgage rates have come down, we do still have some uncertainty.' But the discrepancy between new- and existing-home values in California is the largest gap in the country, according to LendingTree. The state has struggled to keep up with housing demands for decades due to a combination of factors, including rapid population growth, high construction costs, restrictive zoning regulations, and lengthy permitting processes. 'I almost see two different Californias in terms of development,' Victor Currie, real estate agent at Douglas Elliman Real Estate, tells 'The Central Valley and Inland Empire are growth areas with lots of developable land, so prices are more reasonable, and new-home developers can sometimes offer slightly lower interest rates and other incentives to buyers than standard mortgage numbers. 'But when people in other parts of the country think of California, they're usually talking about Los Angeles, Orange County, the Bay Area, or San Diego, and there is a limit to how much new development can be done in the large metro areas.' The L.A. County's destructive wildfires also directly contributed to the housing shortage, forcing residents into an already competitive market and driving up rental and purchase prices in unaffected areas. Rebuilding in fire-prone areas is tough because of strict new building codes and regulations—increasing costs and potentially delaying reconstruction efforts. However, the bump in inventory in other parts of the Golden State has balanced the market a bit, urging buyers to consider jumping back in, says Wei. 'There's a little bit more supply from builders and developers. Builders and developers are actually willing to lower their price or provide incentives for buyers,' Wei explains. Across the country, new homes cost a median of $537,791 while existing homes cost $391,210, according to the study. The average price difference is $146,581, with new homes being 37.5% more expensive than existing homes. In Connecticut and Pennsylvania, new homes are more than double the cost of existing ones, according to the study. Specifically, new homes in Connecticut cost 125.9% (or $555,660) more on average than existing homes, with Pennsylvania close at 121.4% (or $361,637). Potential pitfalls with new builds Still, the roadblocks to building new homes keep inventory low. Expensive land, permit delays, local fees, high material costs, and labor shortages have limited new construction and increased the competition for existing homes. 'Now, here's an issue that we might be seeing in the last couple of months, maybe even in the second half of the year. Builders and developers started realizing, 'Wow, OK, it looks like we are seeing more existing homes coming onto the market.' And now existing homes are competing with those newly constructed properties,' says Wei. That competition, however, isn't necessarily bad news for buyers—especially those looking to break into the market. 'Choosing a new build helps people achieve homeownership because it often helps clear the biggest obstacle most home buyers can't get around: affordability,' Marco Smith, a real estate agent with The Maryland & Delaware Group, tells 'Many builders are offering seller concessions to help cover the buyer's closing costs and, in some cases, will pay down the buyer's rate, making monthly payments more affordable. So, whether you're looking to spend less upfront or spend less per month, builders can typically get that taken care of when you're buying their new homes,' says Smith. 'As interest rates are higher than they were a few years ago and prices remain strong, many homebuyers are steering away from older homes that may need high-ticket items replaced in the near future. New construction offers the peace of mind that you won't have a roof or HVAC replacement a few years after moving in. These homes also come with warranties,' he adds. Prospective buyers who are considering a new build have a couple of solid options. California, Vermont, and Delaware are leading the list of states where new-home values are lowest. Households in Vermont can expect to pay a median price of $352,739 for a new home, but would have to come up with $386,757 for an existing property—8.8%, or $34,018, more. Delaware follows with the third-highest discrepancy between new- and existing-home values: $373,666 versus $406,266, an 8%, or $32,600, difference. Virginia, Maryland, and Utah households also pay more for existing homes than new-construction properties. 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