Housing Market Loses Steam, “Nationwide Purchaser’s Market” Seemingly in 2026

Dave:
We’re solely midway by October and it has already been a wild one for the housing market. We’ve obtained a authorities shutdown, we’ve obtained indicators of recession, we’ve obtained extra sellers leaping into the market, however are consumers biting? We’ll cowl this and extra on at the moment’s episode of On the Market. Hey everybody, welcome to On the Market. I’m
Dave Meyer. I’m simply getting my voice again after 4 superb days in Vegas at BP Con 2025. Hope a few of you have been there as a result of they’re all nice. Each BP Con has been enjoyable, however this one was particular. There was simply a tremendous power this 12 months. I feel in case you have been there you’d know that and I used to be there after all, however so have been the remainder of our panelists. Henry did an superior workshop on deal discovering, however he additionally misplaced to me in golf simply barely, which was very enjoyable.
Kathy participated in a pitch slam for offers and in addition single handedly began a 1500 individual dance celebration on the closing celebration. Jane did an ideal session on flipping ways and doubtless closed 5 offers whereas on stage and I gave a keynote concerning the realities of investing in 2025 and obtained completely wrecked enjoying craps. It was all glorious. I had the time of my life and I can’t look ahead to subsequent 12 months, which occurs to be in Orlando. We introduced it the final day of the convention, so in case you didn’t make it this 12 months, undoubtedly try subsequent 12 months’s convention. I promise you’ll have enjoyable. By the best way, earlier than we get into at the moment’s episode, I wished to say that we’re occupied with doing extra form of small and native occasions for BiggerPockets within the coming 12 months, so I’d like to know within the feedback if that’s one thing that you simply’re all for and what format you’d need.
See. Would you like meetups? Would you like displays, networking workshops? What would you worth most if available on the market got here and visited a city or metropolis close to you? Tell us so we will plan extra neighborhood occasions and get togethers in 2026. Alright, now let’s discuss all of these items that has been occurring since BP Con began. There’s quite a bit occurring after all, however at the moment we’re going to deal with a pair issues. We’ll take a look at new housing market knowledge after all, and the way actually the market is reacting to the marginally decrease mortgage charges that we’re seeing. We will even discuss how the federal government shutdown is definitely impacting the housing market possibly greater than individuals understand, and we’ll additionally discuss how there are indicators that the financial system typically is softening. Let’s bounce in. First up, let’s discuss housing costs as a result of we simply obtained the case Schiller Nationwide Index for July and what it confirmed is that house costs nationally are up 1.7% 12 months over 12 months, so that they’re nonetheless up, however they’re exhibiting steady indicators of softening as a result of simply in June, the month earlier than we had them at 1.9%, and that is mainly only a continuation of the development that we’ve seen.
We’ve truly seen month over month house costs fall 5 consecutive months and simply as a reminder, again in January, the 12 months over 12 months quantity, which is now 1.7% was at 4.2% and February is 3.9%, March 3.4, April 2.7, so it’s mainly simply been trending downwards nearer and nearer to flat all year long. Now, I personally have been saying this for some time now, however simply as a reminder, I’ve been saying that I do suppose that we’re in a correction as a result of the essential factor to recollect concerning the case Schiller index, which is the information we’re speaking about at the moment and there’s tons of various value knowledge, they’re all sort of exhibiting the identical factor, however the factor that’s distinctive concerning the Case Schiller index is that it lags a few months. We’re in October, we’re speaking about July knowledge, and so in case you extrapolate out this development the place we have been beginning the 12 months at 4.2%, now we’re at 1.7%, we’re most likely going to be very near flat by the tip of the 12 months, and that’s not simply inferring from the prevailing knowledge that we have already got.
Like I stated, there are different knowledge sources that you may take a look at which are a bit bit extra present and people additionally present simply persevering with indicators of the housing market cooling. A brand new report final week got here out from Redfin and confirmed that new listings of US houses rose 2.3% 12 months over 12 months, so that is simply individuals who select to place their property available on the market. That’s up 12 months over 12 months and it’s not up loopy 2.3%, nevertheless it’s the largest improve we’ve seen in over three months. Truly over the summer season we noticed fewer and fewer individuals selecting to record their house available on the market. I feel that’s most likely as a result of charges have been nonetheless excessive and we’re getting into this correction and sellers have been simply pondering, you realize what? I’m not going to promote into this adversarial market. I’m simply going to attend it out. However now that we’re in the course of October, I’m recording this on October tenth and simply a few weeks in the past, the fed minimize charges charges are about 6.35% as of at the moment, however they did dip a bit bit nearer to six.1, 6.2, and so I feel what occurred is a variety of sellers listed their house in September hoping that these decrease charges would usher in extra consumers that weren’t actually materializing over the summer season, however sadly that’s not what’s occurring.
In truth, pending gross sales, the variety of contracts mainly which have been formulated during the last couple of weeks truly fell to 1.3% from a 12 months in the past, so not loopy, however once more, it’s the largest decline in 5 months. We additionally noticed that days on market, the common time it takes for a property that will get listed to promote is as much as 48 days, which is per week longer than it was final 12 months. It’s additionally longest it’s been since mainly earlier than the pandemic since September of 2019. And so whenever you take a look at all this stuff collectively, in case you take a look at the case Schiller knowledge that I began off with and you progress onto this Redfin knowledge, what you see is a market that’s trending nationally in the direction of mainly a flat impartial market and it might flip into extra of a purchaser’s market the place costs are happening on a nationwide degree.
I truly suppose at this level that’s most likely fairly doubtless. I haven’t but made my predictions for 2026, however in case you keep in mind my predictions for 2025 is that we’d be fairly near flat and it’s trying like that one’s going to be spot on. I do know that may be scary for individuals within the trade like brokers, lenders or buyers, however I simply need to remind everybody that that is okay. That is regular. That is a part of a traditional housing cycle and really there are some advantages to this. If you’re a purchaser proper now, it signifies that there’s extra stock so that you can select from and you’re going to have extra negotiating energy whenever you’re speaking to sellers as a result of they’re going to be competing for a restricted pool of consumers. The second factor is that issues are going to be on sale. You may be capable to truly get properties for cheaper than you will have during the last couple of years.
And the third factor that’s I feel extraordinarily essential for the housing market is that affordability is definitely getting higher within the housing market. I do know it’s not quite a bit higher, however in case you see that costs are comparatively flat, they’ve been, wages are going up, they’ve been, and mortgage charges have come down even just a bit bit, that signifies that we’re seeing minor enhancements to affordability and now we have a protracted approach to go, don’t get me improper, however we obtained to cease someplace. We obtained to see the tide flip and it has a bit bit, and I do know that’s not nice for on paper when everybody’s seeing the fairness worth of their houses, however if you wish to get again to a housing market that’s wholesome, which I actually do, I feel that is truly one thing that’s comparatively constructive. Personally, I’m okay with comparatively flat costs if it signifies that we get extra affordability again into the housing market long run as a result of that’s going to get us again to extra predictable investing situations and residential shopping for situations, which is basically what I feel all of us want. In order that’s the replace on the housing market that we’ve had during the last couple of weeks. We obtained to take a fast break, however after we come again, I’m going to speak about how the federal government shutdown is definitely impacting the housing market in methods you won’t understand. We’ll be proper again.
Welcome again to On the Market, Dave Meyer right here speaking about current updates out there simply gave you my housing market knowledge. Now shifting on to authorities shut down. I do know that this stuff occur and generally you’re unaffected by it and I feel most likely for the common American who’s not seeking to make a serious buy or doesn’t work within the trade or is after all not a authorities worker who’s instantly impacted by the shutdowns and furloughs, you may not likely really feel the affect of the shutdown, however there’s some knowledge that reveals that the housing market is being impacted. First, I’ll simply share with you a survey that Redfin simply did with Ipsos, and it reveals that 17% of People are saying that they’re delaying a serious buy like buying a house or a automotive. 7% are saying they’re straight up canceling plans to make a serious buy, after which truly 16% stated that they may make a serious buy ahead of anticipated.
In order that’s a bit bit conflicting, however I simply need to name out that mainly 24% of People are saying that they’re going to cancel or they’re going to delay making main purchases like shopping for a house, and that form of is smart as a result of whenever you take a look at how the shutdown is enjoying out, pay has been suspended for about 2 million federal staff. There are three quarters of 1,000,700 and 50,000 who’ve been furloughed and the remaining are anticipated to work with out compensation. Usually, I feel throughout earlier shutdowns we’ve seen that these individuals will get again pay as soon as the federal government reopens, however the White Home has stated that they’re contemplating not paying furloughed federal staff for the time they didn’t work through the shutdown. So all of this stuff have actually led to a variety of uncertainty for these federal staff, and I’m certain there are different individuals who aren’t federal staff who’re simply trying on the chaos in Washington proper now and are saying they don’t need to make a serious buy.
Given all this uncertainty, there’s additionally a ton of different People who work for personal corporations, however they don’t receives a commission. They don’t go to work as a result of their work depends on authorities tasks. So all this stuff are combining to affect the housing market very instantly. That’s the very first thing. There’s a second factor although that I’m undecided everybody has seen, however when the federal government shut down on October 1st, the Nationwide Flood Insurance coverage Program lapsed that means that the federal government sponsored flood insurance coverage is now not issuing new insurance policies, they aren’t doing renewals. When you have an current coverage that’s ongoing that isn’t being canceled, however no new insurance policies, no renewals, and that’s pushing individuals into the personal marketplace for flood insurance coverage, which is far, rather more costly. I used to be simply studying an article that confirmed a lady in Florida who had beforehand had a quote for $4,000 for annual flood insurance coverage for 2 bed room ranch already fairly costly.
Now, the 2 quotes she obtained for personal carriers have been $9,000 and $12,000. So for one, the cheaper yet one more than double for the dearer one, it was triple the federal government program. Due to this elevated price and uncertainty, NIR is estimating that that is going to forestall or delay 1400 closings a day throughout the nation. Now, on a nationwide degree, after all, 1400 closing a day might be not going to essentially present up within the knowledge, however what’s fascinating and unlucky about that is that the areas of the nation which are in these floodplains, and it’s truly greater than you consider 8% of all properties within the US are in areas that require this type of flood insurance coverage from most lenders, however most of these 8% of properties are in states which are on the Gulf Coast, proper? You see Florida, Alabama, Louisiana, Texas, and these are areas of the nation which are already getting hit by a housing correction, and so whenever you mix this stuff collectively, proper, whenever you take a look at the correction that’s already occurring, it’s fairly dangerous in Florida proper now in Louisiana, different locations are seeing extra modest corrections, nevertheless it’s undoubtedly going to chill the market additional, 1400 gross sales in Florida proper now is definitely fairly important, and the sellers who’ve had their properties listed for months and are actually keen to shut and really promote their houses, these delays and these cancellations are going to be notably painful.
Hopefully, the federal government will attain an settlement quickly and the Nationwide Flood Insurance coverage Program will restart issuing insurance policies and renewals, however within the meantime, it might get a bit ugly there, particularly if you have to get personal insurance coverage at the same time as a cease hole in the meanwhile whereas the federal government is shut down. Now, I used to be studying that in some situations it’s potential for present owners to assign their flood insurance coverage to a purchaser. So in case you’re one in every of these people who find themselves in a scenario the place the customer’s backing out or eager to delay as a result of they will’t get flood insurance coverage, I’d suggest trying into this, name your supplier and see in case you can assign it over as a result of that could be a means that you may truly get by this shutdown and really shut on a property. You might do that in case you’re a purchaser too. If you’re a purchaser and also you need to truly shut on these properties, see if you will get the vendor to assign you their insurance coverage program.
Once more, it doesn’t work in all situations, not all carriers are going to try this, nevertheless it’s price exploring in case you occur to be on this unlucky circumstance proper now. So we’ll have to only see how this performs out, however as of now, these are the 2 most important methods the shutdown is impacting the housing market. We obtained to take yet one more fast break, however after we come again, I need to discuss simply a few knowledge units I’ve been taking a look at just lately that present extra indicators of financial weak spot even exterior of the labor knowledge that we’re getting and what this may imply for the market. We’ll be proper again.
Welcome again to On the Market. I’m Dave Meyer. Now let’s simply discuss a pair indicators of financial weak spot. Now, I totally admit the financial system is completely polarized. There are indicators that the financial system is powerful. We’re seeing the inventory market close to all time highs. Gold is basically excessive, which you might argue isn’t an indication of financial power, however asset costs are excessive. Bitcoin is close to all time excessive too. Some individuals suppose that’s due to its hedge. Some individuals may say that’s financial power, however once more, there are all kinds of blended alerts within the financial system proper now, however a pair issues got here out this week, the week of October sixth that simply present a pair issues that I feel are a bit regarding by way of the general financial system, and I simply need to discuss them and the way they may affect the housing market and financial system typically.
The primary up is automotive loans. Now, I’ve stated on the present plenty of instances, and it’s nonetheless true, the common American house purchaser stays in good condition. We’re not seeing massive upticks in foreclosures or delinquencies. They’re very minor for essentially the most half. They’re effectively beneath pre pandemic ranges. We do see some upticks in VA and FHA loans, however nothing at a regarding degree proper now. However whenever you’re trying on the power of the financial system, you usually need to take a look at the standard of the debt that’s on the market as a result of what usually results in recessions is when individuals can now not service their debt, they go bankrupt, they default. That causes these ripple results all through the financial system, so these are issues that you simply all the time need to keep watch over. The automotive mortgage knowledge is getting just a bit bit worrisome. It’s not loopy or something like now, however what we’re seeing is that the portion of auto loans which are 60 days or extra overdue which are subprime hit a file of greater than 6%.
That’s the highest they’ve been in any of the information that I’ve seen going again to 2000, and that features the monetary disaster after they peaked a bit bit beneath 5%. Now, it’s essential to notice that subprime auto loans should not an enormous portion of the market proper now, however prime loans, which is mainly loans made to extra certified consumers are additionally going up. They’re in no way time highs, however they’re form of again close to pre pandemic ranges and so they’re on an upward trajectory, so each trending in that path. We additionally see that an estimated 1.75 million automobiles have been repossessed final 12 months. That’s the very best complete since 2009, and it appears like automotive sellers are literally decreasing their credit score requirements, which is one thing I all the time fear about having come into the financial system and the housing market through the nice monetary disaster, I by no means like seeing lenders decrease their credit score high quality requirements, however we’re seeing proper now the proportion of latest automotive consumers with credit score scores beneath six 50, which is near subprime, was almost 14%.
That’s one in seven individuals. It’s the very best it’s been in 9 years, and so it simply reveals an total weakening of the American automotive proprietor, and I’m not tremendous involved about this proper now as a result of it’s nonetheless a comparatively small portion of the market, however these are developments that we should always be careful for after we’re evaluating the financial system. However there was one stat that I needed to share with you all. That is truly insane. New automotive costs are simply, they’re wild proper now. The typical month-to-month cost in the US, the common for all individuals is greater than $750. That’s completely wild. That may be a loopy amount of cash. That’s $9,000 in post-tax cash per 12 months going in the direction of the common automotive. No marvel persons are struggling to make these funds that’s so costly. Possibly I’m simply previous and my expectations of what automotive funds must be is like $350, however man, that appears excessive and almost 20% of loans and leases, automotive funds at the moment are above a thousand {dollars} in month-to-month funds.
That simply rubs me the improper means. It simply makes me a bit bit involved. Once more, I’m not attempting to be alarmist, however that is one thing I’m undoubtedly going to maintain an eye fixed out, particularly amongst a number of the different knowledge that we’re seeing. Pupil mortgage delinquencies are up, we’re seeing bank card delinquencies up a bit bit, so that is simply including to the image that we’re seeing throughout the financial system proper now. For essentially the most half, American customers, their emotions concerning the financial system are down from a 12 months in the past, however they haven’t actually modified during the last couple of months. There may be this index of shopper sentiment. I talked about this quite a bit as a result of it may be an indicator of the place the financial system goes and what it’s exhibiting proper now could be that shopper sentiment was mainly unchanged month over month. It truly simply went down barely from September, 2025 to October, 2025, however actually massive decline 12 months over 12 months.
So in October of 2024, the index was at 70. Now it’s at 55. That’s a 22% lower 12 months over 12 months, which is down quite a bit. We see the index of shopper expectations of the financial system dropping 31% 12 months over 12 months, so clearly People in comparison with a 12 months in the past feeling worse concerning the financial system. Now, this research is definitely put out by the College of Michigan, and so they put out this actually fascinating chart that I believed was sort of fascinating and wished to share. It reveals that sentiment and expectations for individuals who haven’t any inventory holdings are simply plummeting. In the meantime, individuals who have giant inventory holdings are literally beginning to really feel higher and higher concerning the financial system, so it simply continues to point out that in the US proper now now we have form of two totally different economies occurring. Folks on the very high of the earnings bracket are typically doing effectively.
We’ve seen knowledge that reveals that fifty% of spending within the financial system proper now are coming from the highest 20% of the market, and their expectations are positive. They’re feeling good concerning the financial system. In the meantime, different customers form of within the decrease finish of this socioeconomic bracket, they’re not feeling good concerning the financial system, and that might be an indication that they’re going to pull again on spending much more within the coming months. So that is one other factor that we have to be careful for. Lastly, that is simply fast, however I truly noticed this fascinating knowledge on realtor.com that confirmed that 22 states, so almost half of all states are both in a recession or in the next danger of a recession. These are states, they’re truthfully simply unfold out all through the nation. You see some within the northeast, like in New England, you see some in the course of the nation, Wyoming, Montana, South Dakota, Illinois, a pair within the south in Mississippi and Georgia up within the Pacific Northwest in Washington and Oregon.
They’re fairly unfold all through the nation besides the southwest of the nation. That appears to nonetheless be a vibrant spot. Not all of them are rising. We see California, Nevada, Colorado, New Mexico. They’re form of treading water. Identical factor with another states like Missouri, Tennessee, Ohio, New York, after which there are a variety of states which are persevering with to develop. Texas, Florida, the Carolinas, Pennsylvania, North Dakota, Idaho, Utah, Arizona. All nonetheless persevering with to develop, nevertheless it does once more present that a variety of the nation, whenever you see all this complicated financial knowledge, it’s as a result of it’s all actually segmented. It depends upon what state you’re residing in. It depends upon the place on the earnings bracket you’re in. It depends upon how a lot inventory and gold and Bitcoin you personal, so if you’re feeling actually disconnected from the headlines that you simply’re seeing, it is smart as a result of the headlines are broad generalizations and it’s actually arduous to make broad generalizations concerning the financial system proper now.
It’s completely totally different relying on who you’re, the place you reside, what your job is, what sort of stuff you spend money on, and so simply do not forget that you bought to go a degree deeper within the knowledge. However I’m bringing this all up as a result of a few of this recession danger might be mirrored in mortgage charges going ahead. Once more, as you might know, when there’s danger of recession, that usually pushes down mortgage charges, which might deliver again some extra affordability to the housing market, but when that occurs, and the way a lot that occurs will largely rely on inflation knowledge, as a result of if inflation knowledge goes up, it’ll most likely counteract this recession danger. Mortgage charges will keep the identical, but when inflation begins to degree out and we see extra of this recession danger, clearly nobody needs a recession, however the one silver lining of that could be barely decrease mortgage charges within the weeks or months to return.
That’s why I wished to deliver this up, and it’s one thing we’ll hold an eye fixed out for right here available on the market. That’s my replace for at the moment, October 14th. Thanks all a lot for listening to this episode of On The Market. Don’t neglect, if you wish to see extra available on the market occasions in your native space, ensure to depart us a remark both on YouTube or Spotify. We’d love to listen to what you want to see out of available on the market occasions. We’d like to see you in your native market. I feel it’d be a variety of enjoyable, however we simply need to determine what precisely that ought to appear to be. Thanks once more for listening. I’m Dave Meyer. See you subsequent time.