U.S. Housing Market DOWNGRADED. (Lennar reports biggest drop since 2007)

[00:00:00]One of the biggest home builders in America just sent a dramatic warning to the 2026 housing market. Many people, they've been tricked into thinking there is no housing downturn and that home prices aren't dropping. Yet, this builder just cut their forecast for 2026 and is now offering properties as low as $140,000 at 25% discounts. With Lennar cutting their full-year targets, citing stubborn housing market headwinds, the second largest home builder in America says it now expects full-year deliveries around 82,000, citing high interest rates and geopolitical uncertainty. And what's particularly amazing is how much Lennar has cut prices. They've now cut their net price on new home deliveries by 25% in the last 4 years. Lennar is literally selling houses now at the cheapest level that they have in the last 8 years going back before the pandemic. And Lennar is now the second big real estate company to downgrade their 2026 housing forecast in the last month. The other one that I just told you guys about was Zillow, who downgraded their forecast a couple weeks ago. Question is, what's actually going on in this housing market right now with these big real estate companies downgrading their forecast? And could this actually be the opportunity to get in and buy a house at a fairly cheap rate? Because I'm seeing new builds as cheap as $148,000 here. Look at this, everyone. 3 by 2, 1,400 square feet, built in 2026, $107 a foot. The price on this one has been cut from $197,000 a couple months ago to $148,000 today. Here's another house in Texas. 4 by 2, 1,600 square feet, $196,000 new built this year. Same situation.

[00:01:36]They were listed at $214,000 back in March. They've cut now to $196,000. And these are price points that we quite literally haven't seen since before the pandemic. What's actually amazing is that some of these builders, in addition to cutting the prices, are giving huge, huge mortgage rate buy-downs. In the case of Lennar, they're actually offering a 5-year fixed rate at 3.4% on some of these houses priced at 150 to 200 grand. You see this is part of something that they're calling summer value days promotional 5x1 arm 3.4%.

[00:02:08]This is an FHA mortgage. We can get a rate of 3.4% with a 3.5% down payment for a five-year period fixed. Then after year six, the rate will start to adjust to a higher level. Now, I want to be clear about something. I'm not saying you guys should rush in and buy these homes that are cheaper from these builders like Lennar. However, I think it's an interesting point to consider about where the housing market is heading for the rest of this year. You know, we have a lot of people out there who try to say that there is no housing downturn. We have a lot of people out there who try to say that home prices will only go up. You guys can let me know if you see people saying that here on YouTube and Instagram. Well, while those people are saying that, we have America's biggest home builders doing huge price cuts. And actually, we have the biggest inventory overhang on the new build market that we've seen since the 2008 downturn. Cuz on this graph, we're looking at something called the months of supply on the new home builder market. And what months of supply is, is it takes the inventory on builder lots and divides it by the sales volume. You can see here as of April 2026, we had a 9.1 months of supply, which is really high.

[00:03:19]That means a lot of inventory. In fact, this is a signal of a home builder recession and correction the last couple years. The only other times that we've seen this much inventory on builder lots was the 2009 downturn, 2008-2009 the GFC, the 1981 recession when mortgage rates were 18%, and the 1973 recession when the unemployment rate hit double digits and we had a lot of inflation.

[00:03:42]So, we are in unprecedented times. Only four times in US history, the last six decades, where we've had this much builder inventory relative to sales. The other times were big recessions with double-digit unemployment. We obviously don't have double-digit unemployment right now, but we have these builders cutting prices. That graph tells you that this housing market is in a correction, everyone. I know it might not seem like that cuz prices are still high in a lot of pockets and a lot of people are still refusing to admit it.

[00:04:09]But when you see that much builder inventory on the market and you see builders now offering houses at $150,000 in cities like San Antonio, Texas, that's a signal that there is a housing downturn ongoing. The question you guys need to ask yourselves, is it time for you guys to get in? Are you ready to actually start taking advantage of some of these discounts? And the answer to that is going to totally depend on where you live. Cuz I want to take a look at building permits for a second. What are the states with the most building permits where home builders are building the most homes? These would be the states in red. We're looking right now at data from Reventure App covering building permits by state. You can see the number one state for building permits is Texas. Texas had 200,000 building permits over the last year, number one in the US. Florida's number two at 168,000.

[00:05:00]In the case of Florida, you can see the building permits peaked in 2022 and have started drifting down, but are still high. In the case of Texas, the building permits peaked in 2023 and have started drifting down, but are also still high.

[00:05:12]Now, you look at a state like California. California has 104,000 building permits pulled over the last 12 months. You can see California really there was no surge in building permits during the pandemic and that the building permits today in California are about half of what they were in the 2006 bubble. So, it's a mixed story.

[00:05:30]California doesn't really have much home building, doesn't really have a home building surge relative to its history, but certainly Texas and Florida do. And if we look actually at the states with the most building permits compared to the number of housing units, you could see also state like North Carolina has a lot of building, a state like Georgia has a lot of building, Arizona and South Carolina have a lot of building as does Tennessee. Now, New York has 39,000 building permits, but it's on a much higher housing unit stock. So, on a relative basis, New York's building permits don't mean as much. Ohio is actually kind of interesting. Ohio has 34,000 permits on 5.4 million housing units. That's less than half the building in North Carolina. So, this is a very local situation. If you're going to be able to find these price cuts from these builders and these cheaper houses from these builders, it's going to really depend on the state you're in.

[00:06:17]It's going to also really depend on the zip code. If we zoom in in on area like San Antonio, you could see we have a massive correction playing out all throughout San Antonio, Texas. 20 to 25% declines in value in some of these zip codes over the last couple years. I mean, if you live in a zip code, folks, where the values are going down like this, that means there's a lot more affordability. However, make sure to look at that 2027 forecast. Prices are going to drop another 7%. You're going to want to get ahead of that, negotiate ahead of that downturn. And in 1 second, everyone, I'm going to actually show you how you can secure one of these houses at a big discount, actually how you can negotiate prices even lower if you're an active buyer and investor right now, so you could save maybe 20, 30, 40, 50, maybe even a hundred thousand dollars on your purchase. I'm going to show you how to do that in a second. But first, I want to address an elephant in the room on these home builders, particularly Lennar, and that's the size of the homes that they're building. One criticism I've read online about Lennar and some of these other builders, like D.R.

[00:07:17]Horton as well, is that maybe they're cutting prices, but some people say that they're building really small homes. And sure enough, some of these homes are small, everyone. This is another Lennar home in San Antonio priced at $144,000.

[00:07:31]It's a three-bed, two-bath, 1,000 square feet. Now, I actually polled you guys and I asked you what you thought about this house, whether you think buying a house at $144,000, 1,000 square feet would be a good idea or a bad idea. And we can actually take a little tour here and look at what this floor plan will look like. Here's the living area and the kitchen. It's uh definitely a bit tight. You know, somewhat livable. Kind of does look like an apartment. And then the beds and baths are down this way. Three beds and two baths in a 1,000 square feet is going to be It's going to mean tiny bedrooms. One of the bedrooms being used as an office in their mock-up. Again, you guys can let me know what you think about this. Is this the type of house that you would want to buy? Well, so far, just a couple just about an hour into this poll, 60% of you think it's a good idea, 40% of you think it's a bad idea. And some of you think it's a bad idea, you know, are complaining about the size. You're saying maybe it looks like a shed. Another person says a shed.

[00:08:27]Other people say, "Actually, that's not so bad." This one person lives in a house built in 1929 that's a 1,000 square feet, very livable. And I just actually wanted to draw some data to this so you could guys can see how the sizes of houses have changed over time.

[00:08:41]And actually, how some of these smaller floor plans from builders today are not that small compared to what houses were 30, 40, 50, 50, 70 years ago. And you can see that on this graph. We're looking at the median square footage of a newly built single-family home going all the way back to 1987.

[00:08:58]And you can see back in 1987, the average new build house was 1,700 square feet, as far back as this data goes. And then it surged all the way up to 2,500 square feet in 2015. This was like the peak McMansion in the mid-2010s. And since then, it's been on a trend down.

[00:09:14]So, around 2,100 square feet is now the average home built in 2025. And according to Gemini, which is sourcing their information here from Zillow and some other places, back in the 1950s, the average house was built around 900 to 1,100 square feet, back in the 1950s.

[00:09:31]And so, you know, we have a situation where the homes got a lot bigger, starting really in the '80s, '90s, 2000s, 2010s. Now they're starting to get smaller and now some of these builders are starting to go even smaller and starting to go maybe back to what a starter home was like in the 60s and 70s in terms of size. Another interesting aspect about this is that not all builders are behaving in the same way.

[00:09:52]America's two biggest builders, D.R.

[00:09:55]Horton and Lennar, have been much more aggressive in cutting prices and also delivering smaller floor plans and bringing more affordability to buyers.

[00:10:03]You can see Toll Brothers is up average selling price of close to a million dollars, 960,000, while Pulte Group is around 566,000. That's down a bit from a couple years ago in 2024, but still up from 2022 and 2023. So, it's actually a very bifurcated market depending on which slice of the market you're looking at and which region you're looking at.

[00:10:23]The broader trend is this, luxury builders, who occupy more of a presence in the Northeast and Midwest, and also who build in a nicer communities in the South at higher income levels, they haven't really cut prices, maybe even increased prices. But Lennar, who builds on larger sites all throughout the South like D.R. Horton and Lennar, they have been very aggressive in cutting prices.

[00:10:44]Who appear appeal to a more kind of blue-collar, working-class home buyer, they have been more aggressive in cutting prices.

[00:10:50]>> Get the best deal possible on the house that you're looking at buying. A lot of people don't realize that many sellers are willing to accept much less than the list price advertised on their house.

[00:11:01]And I've been talking to some home buyers recently who have saved over a hundred thousand dollars recently on their home purchase just by having the confidence to offer below list price. I mean, folks, if you seriously want to buy a house this year and you want to buy a house at a good deal and and you don't want to overpay, it starts with offering below list price. You need to have the strength and the stability to get in there and offer well below list and offer that on many different houses because you can potentially unlock a massive discount if you do. I'm proof in the pudding of that. I offered 100,000 below list a couple months ago in Atlanta and I got the house. People are submitting feedback to me here on Reventure app talking about how they're getting 20 to 30% below list price. So, this is possible in this market everyone. I mean, this is not imaginary.

[00:11:47]This is happening right now. The question is, are you able to do it? And I'm seeing listings, especially across states like Texas and Florida and Tennessee and Colorado and Nevada, Arizona. I'm seeing listings with big price cuts where you have a lot of opportunity. This is one such example, folks. Four bed, three bath house, 2,700 sq ft in San Antonio. This was built in '06. Listed for 274,000. That's $104 a foot. Pretty big. But, the question is, what do you actually offer on this house? Well, we developed a tool to help you guys with that. Well, the question is, what do you actually offer on this house, folks? Well, I just plugged into our Reventure listing tool analyzer and we're getting offer ranges of 238 to 258,000 of where we think this house should sell for based on the comps and based on the listing history and based on the seller desperation. You could see $104 a foot compares to $111 a foot for the comps.

[00:12:38]So, it's already at a bit of a discount compared to the comps. However, seller desperation score of a 70 out of 100, they've been trying to sell this house now for 2 years. They've cut the price multiple times. As a result, we think you should be able potentially to slide in there with a below asking price offer in this range and have a greater chance at securing a house at a discount. Our Reventure listing tool looks at the comps in the area, the purchase history of the house, as well as the seller desperation to give you an offer range that you can go to the seller with to give you an offer range where you can feel comfortable offering on that house feeling like you're going to get a good deal and feeling also like you have a greater likelihood of the seller actually negotiating with you and taking you seriously with that offer. Thousands of our home buyers on Reventure app are actually using this tool right now to help them submit offers and several have actually already received a bunch of purchased houses at 20 to 30% discounts.

[00:13:33]To get a house at a discount in 2026, use this Reventure listing tool at reventure.app/listingtool.

[00:13:40]Upgrade to a premium account for only $39 a month to use this tool. This is going to be a huge assist for you guys out there in the process of making offers on houses in 2026 and making more educated offers so you have a greater chance of getting a big big discount.

[00:13:55]reventure.app/listingtool.

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