Is it true that home prices will crash soon, making it better to wait to buy?

No — data shows a crash is unlikely. Unlike 2008, when an oversupply of homes triggered a price collapse, today's market faces an undersupply of homes for sale. This fundamental difference means waiting for prices to crash probably won't pay off.

Is inventory really too low to find a home to buy right now?

While inventory remains below pre-pandemic levels, it has grown throughout the year and is now higher than it was a year ago, according to Realtor.com data. The market is moving in a healthier direction, making it more feasible to find a home than during the acute shortage of recent years.

Do I really need 20% down to buy a home?

No — most homebuyers put down far less. First-time homebuyers typically put down only 6%, and depending on your loan type, you may need as little as 3.5% or even 0% down. The 20% figure is a widespread myth; Fannie Mae reports that about 90% of consumers overstate the minimum down payment required.

Why do repeat homebuyers put down closer to 20% if it's not required?

Repeat buyers typically have substantial equity built up in their current home, which they can use toward a larger down payment on their next purchase — not because 20% is required. First-time buyers, without that existing equity, generally don't need to match that percentage.

Top 3 Housing Market Myths Debunked

By Anne-Britt OstlundAugust 16, 20244 min read

Buying a Home

Have you ever heard the phrase: don’t believe everything you hear? That’s especially true if you’re thinking about buying or selling a home in today’s housing market. There’s a lot of misinformation out there. And right now, making sure you have someone you can go to for trustworthy information is extra important.

If you partner with a real estate agent, they can clear up some common misconceptions and reassure you by backing them up with research-driven facts. Here are just a few misconceptions they can help disprove.

1. I’ll Get a Better Deal Once Prices Crash

If you’ve heard home prices are going to come crashing down, it’s time to look at what’s actually happening. While prices vary by local market, there’s a lot of data out there from numerous sources that shows a crash is not going to happen. Back in 2008, there was a dramatic oversupply of homes that led to prices crashing. Across the board, there’s an undersupply of homes for sale today. That makes this market a whole different scenario (see chart below):

So, if you think waiting will score you a deal, know that data shows there’s not a crash on the horizon, and waiting isn’t going to pay off the way you’d hoped.

2. I Won’t Be Able To Find Anything To Buy

If this nagging fear about finding the right home if you move is still holding you back, you probably haven’t talked with an expert real estate agent lately. Throughout the year, the supply of homes for sale has grown. Data from Realtor.com helps put this into context. While there are still fewer homes on the market than in a more normal year like 2019, inventory is still above where it was at this time last year (see graph below):

So, if you’re remembering all that media coverage about record-low supply during the pandemic, you can rest a bit easier. While the market isn’t back to normal just yet, inventory is moving in a healthier direction. And that means as your options improve, you can let go of this now outdated myth because finding a home to buy won’t feel quite so impossible anymore.

3. I Have To Wait Until I Have Enough for a 20% Down Payment

Many people still believe you need a 20% down payment to buy a home. To show just how widespread this myth is, Fannie Mae says:

“Approximately 90% of consumers overstate or don’t know the minimum required down payment for a typical mortgage.”

And if you look at the data from the National Association of Realtors (NAR), you can see the typical homeowner isn’t putting down as much as you might expect (see graph below):

First-time homebuyers are typically only putting down 6%. That’s far less than the 20% so many people think they need. And if you’re looking at that graph and you’re more focused on how the number for repeat buyers is closer to 20%, here’s what you need to realize. That’s only because they have so much equity built up in their current house that can be used to make a larger down payment for their next move.

This goes to show you don’t have to put 20% down, unless it’s specified by your loan type or lender. Many people put down a lot less. Not to mention, depending on the type of home loan you get, you may only need to put 3.5% or even 0% down. So, if you’re buying your first home, you likely don’t need nearly as much for your down payment as you may think.

An Agent’s Role in Fighting Misconceptions

If you put your move on pause because you heard one or more of these myths yourself, it’s time to talk to a trusted agent. An expert agent has more data and the facts, just like this, to reassure you and help break through any misconceptions that may be holding you back.

Bottom Line

Don’t let common myths about the housing market stand in the way of your real estate dreams. At Mountain Rose Realty, we believe that informed decisions lead to successful outcomes, whether you're buying or selling in the Telluride area. With years of experience and a deep understanding of the local market, Anne-Britt Ostlund and her team are dedicated to providing you with the facts and guidance you need to navigate today’s housing market confidently.

If you're considering purchasing a home in Telluride or the surrounding areas, we're here to help you cut through the noise and misinformation. We specialize in finding homes that match your lifestyle and budget, whether you're searching for a cozy mountain retreat or a luxurious estate. With a commitment to personalized service and local expertise, Mountain Rose Realty is your trusted partner in the Telluride real estate market.

Reach out to us today to explore Telluride homes for sale, discuss your real estate goals, and get the reliable insights you need to make the right move. Let Mountain Rose Realty be your guide to turning your dreams of living in Telluride into reality.

Frequently Asked Questions

Is it true that home prices will crash soon, making it better to wait to buy?: No — data shows a crash is unlikely. Unlike 2008, when an oversupply of homes triggered a price collapse, today's market faces an undersupply of homes for sale. This fundamental difference means waiting for prices to crash probably won't pay off.
Is inventory really too low to find a home to buy right now?: While inventory remains below pre-pandemic levels, it has grown throughout the year and is now higher than it was a year ago, according to Realtor.com data. The market is moving in a healthier direction, making it more feasible to find a home than during the acute shortage of recent years.
Do I really need 20% down to buy a home?: No — most homebuyers put down far less. First-time homebuyers typically put down only 6%, and depending on your loan type, you may need as little as 3.5% or even 0% down. The 20% figure is a widespread myth; Fannie Mae reports that about 90% of consumers overstate the minimum down payment required.
Why do repeat homebuyers put down closer to 20% if it's not required?: Repeat buyers typically have substantial equity built up in their current home, which they can use toward a larger down payment on their next purchase — not because 20% is required. First-time buyers, without that existing equity, generally don't need to match that percentage.