America’s biggest home builders are issuing new warnings about the housing market heading into 2027. KB Home, the nation’s seventh-largest builder, has lowered its guidance as buyer traffic and sales weaken. Lennar is also cutting prices, with its average selling price net of incentives falling from $511,000 to $359,000 over four years—a 30% decline.
Builders now have nearly 490,000 homes for sale nationwide, one of the largest inventories on record. More than 300,000 of those homes are in the South, where builder inventory has surpassed its 2006 housing bubble peak. Yet many buyers are still priced out, revealing the difference between a shortage of homes and a shortage of affordable homes.
I’m touring a new-home community in Calhoun, Georgia, where a roughly 2,200-square-foot, four-bedroom house is listed around $265,000—or about $120 per square foot. That’s well below the approximately $160-per-square-foot construction cost cited by the National Association of Home Builders. Builders are also offering mortgage rate buydowns that existing-home sellers often can’t match.
But the new-home and resale markets are moving at very different speeds. Builders have more than nine months of inventory supply, compared with roughly 4.9 months for existing homes. Many resale owners are holding onto low mortgage rates rather than cutting asking prices. That advantage is slowly fading: about 19% of mortgage holders have rates below 3%, while more than 20% have rates above 6%.
In this video, I break down:
• Why KB Home and Lennar are warning of worsening housing conditions
• How builder price cuts and mortgage buydowns are reshaping the market
• Why new-home inventory is near historic highs while resale supply remains tighter
• The huge regional divide between the South, West, Midwest, and Northeast
• What today’s home prices mean for buyers heading into 2027
The regional differences are enormous. Builders have approximately 301,000 homes for sale in the South, 103,000 in the West, 59,000 in the Midwest, and 30,000 in the Northeast. While the South has more builder inventory than during the 2006 bubble, the Midwest and Northeast remain far below their previous peaks. That helps explain why prices are correcting in some Sun Belt markets while other regions remain competitive.
So when is it safe to buy? Inventory alone doesn’t answer that question. On Reventure App, I compare home values with local incomes and long-term norms to identify overvalued and undervalued markets. Austin, Texas, is now estimated to be 2–3% undervalued after a roughly 27% price decline, while Boise, Idaho, remains an estimated 20–30% overvalued.
Check the overvaluation rate, home price forecasts, and market trends for your ZIP code before making an offer: https://www.reventure.app
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DISCLAIMER: This video content is intended only for informational, educational, and entertainment purposes. Neither Reventure Consulting, Reventure App, or Nicholas Gerli are registered financial advisors. Your use of Reventure Consulting’s YouTube channel, along with Reventure App’s data, and your reliance on any information on the channel is solely at your own risk. Moreover, the use of the Internet (including, but not limited to, YouTube, E-Mail, and Instagram) for communications with Reventure Consulting or Reventure App does not establish a formal business relationship.