The U.S. housing market now has its highest level of supply in roughly a decade, but real estate commentator Michael Bordenaro says buyers still are not rushing back in.
Bordenaro said the country had about 4.9 months of housing inventory as of August, the highest level since 2016 when measured against the current pace of sales.
At the same time, existing-home sales fell another 2% in August, creating what he described as a clear sign that the market has shifted away from the extreme shortage conditions that defined the pandemic era.
His main argument is simple: more homes are available, but many buyers still cannot afford them.
Supply Is Rising While Sales Keep Falling
Bordenaro said the inventory increase challenges the idea that low supply alone is the reason so many Americans are struggling to buy homes.
“At the current pace of sales, how long would it take to sell all the homes that are currently for sale?” he asked.
His answer was 4.9 months.
That is not an overwhelming amount of supply by historical standards, but it is a major change from the ultra-tight market seen in recent years.
Bordenaro argued that the more important problem is weak demand.
He said mortgage rates have climbed above 7%, with Mortgage News Daily showing 7.12% in the figures he cited.
He had previously predicted rates would hit 7% by the end of the year and said he now believes they could climb above 8% if Treasury yields keep rising.
That is a dramatic forecast, and it is worth remembering that it is his own prediction rather than a certainty. Still, the direction of rates matters because even small increases can push monthly payments sharply higher.
Bordenaro Says Rates Are Not the Whole Problem
Bordenaro rejected the idea that mortgage rates are the sole reason the market is struggling.
He pointed to new-home builders, which often use mortgage-rate buydowns to offer buyers financing in the mid-4% range.
If lower rates alone could revive demand, he argued, those homes should be selling far more easily.
Instead, he said buyers are still hesitant.
“The poor economy is the problem,” Bordenaro said. “Wages that are not keeping up with massive inflation are the problem. The cost of living crisis is the real problem.”
He also cited inflation data, saying CPI remained at 3.4% while producer prices were above 4%.
Bordenaro connected those numbers to rising Treasury yields and argued that persistent inflation is helping keep borrowing costs elevated.
That broader affordability point is hard to ignore. A buyer does not make a housing decision based only on the mortgage rate; groceries, insurance, taxes, utilities and other debts all compete for the same paycheck.
Price Cuts Are Becoming More Common
Bordenaro said sellers are increasingly being forced to adjust.
He cited Zillow data showing that 26.3% of homes on the market in August had received a price cut.
For buyers, he said that can make a major difference.
A house that suddenly drops by $50,000 or $100,000 can move from completely unaffordable to at least worth considering.
Bordenaro also argued that a price cut usually reveals seller motivation.
A seller who refuses to negotiate can simply leave a listing sitting at the same price, he said, while someone who cuts the asking price is signaling a stronger desire to get a deal done.
He believes many sellers are still “stuck on yesterday’s prices” and have not fully accepted how much the market has changed.
Some properties, he said, are now being listed below what their owners paid in 2022.
That can become especially painful once commissions, closing costs and other expenses are added.
Luxury Homes Are Distorting the Picture
Bordenaro also warned against reading too much into national median-price figures.
He cited an August median sale price of $429,100, up 1.6% from a year earlier, but said that number can give people the wrong impression.
His argument is that stronger activity at the high end can lift the median even while lower-priced segments weaken.
While filming in Tiburon, California, Bordenaro pointed to two multimillion-dollar homes that were already pending.
He said wealthy buyers are less affected by current borrowing costs and may even be benefiting from strong stock-market and tech gains.
That helps explain why the high end can remain active even while ordinary buyers are struggling.
It is a useful reminder that the housing market is not one market. A $2 million home in a wealthy Bay Area neighborhood can behave very differently from a starter home in a middle-income suburb.
Homebuilders Are Feeling the Pressure
Bordenaro said homebuilders may be getting hit harder than almost anyone else.
As mortgage rates rise, builders often have to offer larger incentives, deeper buydowns and other concessions to keep buyers interested.
Those tools can help move homes, but they also reduce profit margins.
Bordenaro said some builder stocks have fallen to around 0.8 times book value, meaning investors are valuing the companies at less than the stated net value of their assets.
He noted that similarly depressed valuations appeared in 1990 and again around 2008 and 2009.
Bordenaro sees that as a warning sign.
He does not necessarily think the builders will collapse, but he expects them to keep lowering prices and increasing incentives to get homes sold.
That could be good news for buyers, even if it is painful for builder profits.
Sellers Still Have Some Cushion
Bordenaro said the market has not turned into a nationwide crash partly because many homeowners still have low mortgage rates and substantial equity.
They are not forced to sell.
He also pointed to the stock market’s continued strength, saying the wealth effect gives some homeowners more breathing room.
But life events still create sellers.
Divorce, marriage, job transfers, retirement, children leaving home and moving closer to family can all force a transaction even when market conditions are bad.
Bordenaro said foreclosure and short-sale activity has also been ticking higher, which he views as another sign of growing financial pressure.
The key issue, in his view, is that sellers who genuinely need to move may have to cut more aggressively.
A small reduction may not be enough when mortgage rates are above 7%.
He Believes the Balance of Power Is Shifting
Bordenaro described the housing market as being at an important turning point.
For several years, sellers benefited from low inventory, ultra-low rates and intense competition.
Now, he believes most of those advantages are disappearing.
Inventory is rising.
Sales are falling.
Mortgage rates are high.
Price cuts are spreading.
And buyers are becoming more selective.
Bordenaro said this is ultimately positive for people who have been priced out for years, because sellers and builders may finally have to compete harder for their business.
His broader conclusion is that the market is moving slowly, not collapsing overnight.
That distinction matters.
A 10-year high in months of supply does not automatically mean homes are cheap, and lower demand does not mean every market will fall at the same pace.
But Bordenaro believes the direction is clear: more sellers are learning that simply listing a property at yesterday’s price is no longer enough.
“Buyers don’t care,” his message suggests, because having more homes available means little if those homes still do not fit into household budgets.
For now, the housing market appears caught between greater supply and weak affordability, and Bordenaro expects that tension to keep pushing prices, incentives and seller expectations lower.
Gary’s love for adventure and preparedness stems from his background as a former Army medic. Having served in remote locations around the world, he knows the importance of being ready for any situation, whether in the wilderness or urban environments. Gary’s practical medical expertise blends with his passion for outdoor survival, making him an expert in both emergency medical care and rugged, off-the-grid living. He writes to equip readers with the skills needed to stay safe and resilient in any scenario.
