A Key Stat Just Crossed a Major Milestone—And It Could Have a Major Impact on the Housing Market
Summary
A shift in mortgage rates is creating opportunities for investors, with more homeowners having 6%+ rates, loosening the 'rate-lock' on the housing market. Hosts can capitalize on this by targeting affordable markets, negotiating like it's 2018, and focusing on cash flow. Act now by researching target markets and preparing an outreach strategy.
Key Insights
- •For the first time in many years, more homeowners carry mortgage rates at or above 6% than enjoy 3% loans, potentially increasing properties on the market. This change happened at the tail end of 2025.
- •Markets like Columbus, Ohio; Indianapolis; and Kansas City are showing outsized growth.
- •States with modest home values, such as Mississippi, Oklahoma, and West Virginia, now have the greatest proportion of homeowners willing to take on 6%-plus mortgages.
Action Items
- ✓Underwrite today’s rates for 5.75% to 6.5% in long-term debt and stress-test deals at Prime + 1% to ensure resilience.Effort: lowImpact: medium
- ✓Prepare an outreach strategy for motivated sellers who own free and clear, focusing on providing solutions.Effort: mediumImpact: medium
- ✓Negotiate like it's 2018 by asking for seller credits, price reductions, and longer due diligence periods.Effort: mediumImpact: medium
- ✓Target markets where people are moving, like secondary and tertiary markets in the Midwest and parts of the South.Effort: mediumImpact: medium
Common Mistakes
- ⚠Don’t be sold on the hype that tends to accompany any real estate momentum.
- ⚠Being a landlord in a low-demand market is not a good move.
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