Category: Market Insights

This week a reporter reached out to me with several questions about a new report showing that nearly one-third of U.S. counties are now seriously unaffordable for homebuyers. One question stood out: why aren’t falling home prices making homes more affordable?

It’s the right question, and the answer should shape every coaching conversation we have with our agents right now.

The short answer: the payment is the problem, not the price.

The reality in three numbers

• $222 vs. $38. Freddie Mac’s 30-year average rate rose from 6.27% a year ago to 7.40% as of Oct. 15. On a $294,400 loan (the median-priced home with 20% down), that adds about $222 a month to principal and interest. Over the same year, ATTOM’s national median price fell from $375,000 to $368,000. That price drop saves the buyer only about $38 a month.
• $90,191 vs. $79,534. ATTOM estimates a buyer needs to earn $90,191 a year to afford the median-priced home. The national average wage is $79,534.
• 43%. Live data from Altos Research shows 43% of single-family listings nationally have had a price cut.

Buyers have more choice and more room to negotiate. What’s stopping them is the monthly payment.

Look at your market

Every market is local. Here’s the live picture from Altos Research as of October 21, 2026. Click any link, then enter your own city or ZIP code.

• National: $434,900 median list price. Inventory has climbed to 905,166 homes, and the median home sits 70 days. Pricing strategy matters more than ever.
• California: $765,000. Prices have plateaued. Watch for demand to pick up before expecting prices to climb.
• New York: $599,000. The fastest-moving of these markets at 56 median days, but inventory is rising and sellers’ edge is narrowing.
• Florida: $469,000. 44% of listings have cut their price, and the median home sits 84 days. Buyers have real leverage.
• Texas: $365,000. Also 44% price cuts and 84 days. Texas agents need to master the “Staleness Conversation.”

Same pattern everywhere: prices are flat, sellers are adjusting, and buyers are watching their payment.

Coaching ourselves first

As leaders, we set the tone. If we talk about this market as a crisis, our agents will too, and so will their clients.

The RealTrends “Against All Odds” study, led by Steve Murray and his team, looked at 15 brokerages that grew through the 2008–2012 downturn. Their edge wasn’t a secret strategy. It was great leadership, getting closer to their people, and executing the daily fundamentals.

That’s our job this quarter. Know the numbers. Stay close to your agents. Make the daily fundamentals non-negotiable.

Coaching our agents: six conversations to have this week

1. Lead with the payment, not the price.
A buyer who knows their price but not their payment isn’t ready. Start every buyer consultation with a preapproval and a clear monthly number.

What to say: “Before we look at homes, let’s agree on the monthly payment you’re comfortable with. Then we’ll find the home that fits it.”

2. Run the buydown math on every offer.
A price cut barely moves the payment at today’s rates. Have your agents ask their lender partner to compare a price reduction with the same dollars in seller credit toward a rate buydown, then show the seller both.

What to say: “A $7,000 price cut lowers the buyer’s payment about $38 a month. The same $7,000 toward their rate may lower it more. Let’s have the lender show us both, so we pick the option that gets your home sold.”

3. Retire the 20% myth.
According to NAR, the typical first-time buyer puts down 10%, not 20%, and is now 40 years old, an all-time high. Help your agents learn their state and county down payment assistance programs, along with the basics of FHA and low-down-payment conventional loans. A smaller down payment raises the monthly payment, so the payment conversation still comes first.

What to say: “You may not need 20% down. Let’s sit down with a lender and look at every option before you decide you have to keep renting.”

4. Talk about qualifying vs. comfortable.
The traditional guideline is to keep housing costs at 28% of gross income, and lenders often approve more. Agents earn trust by helping buyers find the payment they can live with, not just the one they qualify for.

What to say: “The bank tells you what you can borrow. My job is to make sure you can still live your life after you move in.”

5. Price listings right on day one.
Every price cut tells buyers the first price was wrong. Coach agents to bring sellers real market data at the listing appointment, so the first price is the right price.

What to say: “The market will tell us if we’re wrong, but it will cost you time and money to find out. Let’s price it where buyers are acting today.”

6. Remember that life doesn’t wait for rates.
People still move because of the 8 D’s: Diamonds, Diapers, Diplomas, Drive, Downsizing, Deployments, Divorce, and Decline or Death. Many of these come with a deadline, whatever rates are doing. Those clients need an agent who knows this market cold.

What to say: “Whatever rates do, your life has a timeline. Let’s build a plan around it.”

The bottom line

This market rewards agents who understand it and punishes those who wait for it to change. Rates may come down, or they may not. Either way, the agents who know the payment math, prepare their buyers, and work their fundamentals every day will win.

Your next step: Pull up your own market on Altos, then share this post with your team at your next meeting and practice these six conversations together. If you’d like help coaching your team through this market, book a session with me at calendly.com/mjsession.

Coach to the reality. Then go win the day.

Sources: ATTOM Home Affordability Reports (Q3 2025 and Q3 2026 figures as reported); Freddie Mac Primary Mortgage Market Survey; NAR 2025 Profile of Home Buyers and Sellers; Altos Research single-family market data for the U.S., California, New York, Florida and Texas, October 21, 2026. Payment figures are my own calculations: 30-year fixed, principal and interest only.

Strategy Over Statistics: Becoming the Leader of Choice

Data is everywhere, but clarity is scarce. My goal for today’s blog is to provide the insights your team can leverage to bridge the “Expectation Gap” with their agents and recruiting prospects. When you empower your agents to lead in the local market, you become the “Office & Leader of Choice” in your recruiting, attraction, and retention efforts… and this can happen more naturally and automatically.

The Leadership Leverage: Bridging the “Expectation Gap”

The “Expectation Gap” is the single biggest threat to agent productivity and your brokerage’s bottom line today. While 80% of sellers currently believe they will fetch their full asking price or more, the reality is that 62% of homes are selling for less than their initial list price.

When you equip your agents to explain – not just quote – why a higher percentage of listings now require price reductions, you are giving them the authority to win the listing and price it correctly from day one. High-performing agents are attracted to leaders who provide this level of clarity; it is your most powerful tool for recruitment and retention.

The $35,600 Conversation

Your agents – and agent prospects need the confidence to show sellers the literal cost of “waiting for the right buyer.” On an average $400,000 listing, the May 2026 data is clear:

• Days 0-14: Properties typically sell for $380,400.
• Day 120+: The “staleness” factor and buyers questioning the asset drop that average to $344,800.

That $35,600 penalty is the price of an unguided seller. By providing the interpretation that protects a seller’s equity, you prove that your brokerage is the premier destination for serious real estate professionals.

The “Equity Shield” as a Recruiting Tool

In an era of negative foreclosure headlines, your role is to provide the “Equity Shield.” While foreclosure filings are rising toward 120,000 as the market normalizes, the average homeowner sits on $295,000 in equity.

By showing that two-thirds of homeowners either own their home free and clear (39.3%) or have 50% or more equity (27.1%), you give your agents the grounded optimism they need to stay focused. This culture of clarity is why you become—and remain—the Leader of Choice.

Local Market Snapshots: May 13, 2026

Consider these specific market profiles—or type in your own local market—to give your local leadership team immediate context:

• National Market: The median list price is $449,900 with a Market Action Index of 37. Inventory has increased to 767,132, signaling that pricing strategy is more critical than ever.
• California (CA): With a median price of $799,900 and an index of 43, prices have reached a plateau. Agents should watch for the Market Action Index to trend higher before expecting prices to climb again.
• New York: This market shows a stronger seller’s advantage with an index of 41 and a median price of $669,000. Inventory is tight at 17,710, creating upward pressure on prices.
• Florida (FL): The median price sits at $498,500 with an index of 34. Despite headlines, inventory has actually decreased to 88,612, suggesting a more resilient market than many expect.
• Texas (TX): Texas is currently the most price-sensitive of these markets with an index of 33 and a median price of $375,000. With inventory at 128,743, agents must be experts at the “Staleness Conversation” to keep listings moving.

Most agents know what’s happening. Good agents understand what’s happening. Only great agents can explain what’s happening. Use these insights – like these – to ensure your office is where great agents choose to be.

Want the slides? Hit me up…

A few of my readers have asked me to re-cap what happened in the U.S. Senate today – here is my take: 

On March 12, 2026, the Senate overwhelmingly passed the 21st Century ROAD to Housing Act in an 89–10 vote. This landmark bipartisan legislation led by Senate Banking Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) represents the most significant federal housing overhaul in decades.

The bill combines the Senate’s “ROAD to Housing Act” with the House’s “Housing for the 21st Century Act” to address the national shortage of nearly 4.7 million homes.

Executive Summary

The primary goal of the Act is to boost housing supply and lower costs by cutting federal “red tape,” modernizing aging housing programs, and incentivizing local governments to reform restrictive zoning and permitting rules. While largely praised for its supply-side reforms, the bill includes a controversial provision targeting corporate landlords that has sparked intense debate among industry stakeholders.

Key Highlights & Provisions

1. Restrictions on Institutional Investors (Section 901)

The most discussed addition is a provision titled “Homes are for People, Not Corporations.”

• The Ban: Prohibits “large institutional investors” (entities owning 350 or more single-family homes) from purchasing additional single-family properties.
• Build-to-Rent (BTR) Mandate: Requires institutional investors to sell build-to-rent homes to individual buyers within seven years of construction.
• Controversy: Critics, including the National Association of Home Builders and the U.S. Chamber of Commerce, argue this will stifle investment and could slash single-family production by 40,000 units per year.

2. Cutting Regulatory Red Tape

• Environmental Streamlining: Categorically excludes certain low-impact projects (like infill and rehabilitation) from rigorous NEPA reviews to speed up construction.
• Pattern Book Grants: Provides funding for cities to adopt “pre-approved” building designs, allowing developers to bypass lengthy permit approvals for standardized housing types.
• Rural Housing Reform: Streamlines the joint review process between HUD and the USDA for projects receiving funding from both agencies.

3. Modernizing Federal Grants (HOME & CDBG)

• CDBG Flexibility: For the first time, allows Community Development Block Grant (CDBG) funds to be used for new housing construction (previously limited to rehabilitation).
• Incentive Adjustments: Starting three years after enactment, CDBG funding may be adjusted by 10% based on a community’s actual housing production.
• HOME Program: Expands income eligibility to better support “workforce housing” and authorizes funds for infrastructure (like water/sewer) adjacent to housing projects.

4. Supporting Diverse Housing Options

• Manufactured Housing: Updates federal rules and provides grants (via the PRICE program) to preserve and maintain manufactured home communities.
• RESIDE Act: Authorized to help local governments convert vacant or abandoned commercial structures into “attainable housing.”
• Public Welfare Cap: Increases the cap on bank “public welfare investments” from 15% to 20%, encouraging more private bank capital to flow into affordable housing.

5. Unexpected Provisions

• CBDC Moratorium: Includes a temporary ban on the Federal Reserve issuing a Central Bank Digital Currency (CBDC) through 2030, a priority for some conservative lawmakers.

What’s Next?

The bill now returns to the House of Representatives. While the House passed a previous version 390–9, leaders like Financial Services Chair French Hill (R-AR) have signaled that the Senate’s new investor restrictions and the removal of certain community banking provisions may require further negotiations or a conference committee to reconcile the two versions.

If you have been following the news, you have likely seen the conversation that follows every Federal Reserve meeting. But there is a massive misconception in the headlines: most people think the Fed “sets” mortgage rates.

They do not.

The housing market is actually moved by two different engines. One responds directly to the Fed, while the other responds to the bond market. Understanding how these work is the key to knowing when the market is truly shifting.

1. The Short-Term Engine: The Fed, ARMs, and HELOCs

When the Fed moves the needle by 0.25%, it has an immediate, mechanical impact on Adjustable-Rate Mortgages (ARMs) and Home Equity Lines of Credit (HELOCs). These loans are tied to short-term benchmarks like the Prime Rate.

• Direct Impact: If the Fed raises rates, your monthly payment on an existing variable loan goes up almost instantly.
• Qualification: For new buyers, a Fed cut can make the introductory rate on an ARM look much more attractive, pulling them off the sidelines even if fixed rates have not moved yet.

2. The Long-Term Engine: T-Bills and Fixed Rates

For the classic 30-year fixed mortgage, the Fed is only a secondary influence. These rates track the 10-Year Treasury Yield.

Investors view mortgages as long-term bonds. When they see inflation cooling, they buy 10-Year Treasuries, which drives yields down. Mortgage rates typically follow. This explains why you sometimes see mortgage rates drop even when the Fed holds rates steady: the market is watching the T-Bill, not the Fed podium.

By the Numbers: The 0.25% vs. 0.50% Impact

In 2026, the housing market is incredibly sensitive to these small shifts. Here is exactly how many people and sales are affected when rates shift on a standard $380,000 national average mortgage.

The 0.25% Scenario (The Ripple)

• Families Blocked: Every time rates go up by just 0.25%, about 1.3 million families who could afford a home yesterday find themselves unable to qualify for a loan today.
• Monthly Savings: If rates drop by 0.25%, a buyer saves about $61 per month.
• More Home Sales: This move historically results in roughly 125,000 more home sales annually when accounting for both new buyers and sellers entering the market.

The 0.50% Scenario (The Wave)

• Families Invited Back: A 0.50% drop is powerful enough to bring roughly 2.5 million families back into the market who were previously priced out.
• Monthly Savings: On that same $380,000 mortgage, a 0.50% drop saves a buyer roughly $121 per month.
• More Home Sales: A sustained 0.50% drop is estimated to spark over 250,000 more home sales annually. This occurs because lower rates encourage homeowners to sell, finally making it financially feasible for those who have been “locked in” to their current homes to move and list their properties.

The Economic Ripple: Jobs and Your Community

A home sale is not just a private transaction; it is a job creator. The ripple effect of real estate is one of the strongest drivers of the American economy.

• The 2-for-1 Rule: For every two home sales, one job is supported in the local economy. This includes real estate agents, contractors, landscapers, and furniture retailers.
• The $60,000 Boost: Every single home sale pumps roughly $60,000 back into the community through professional services and immediate spending a new homeowner does on their property.
• The Big Picture: When interest rates drop by 0.50% and spark 250,000 new sales, that activity alone helps sustain 125,000 jobs across the country.

The Long-Term Solution: Reducing the “Debt Anchor”

While we track 0.25% moves today, many economists argue that the long-term floor for interest rates is dictated by our National Debt.

When the government runs a large deficit, it must issue a massive amount of Treasury bonds to fund it. This creates a crowding out effect. To attract enough investors to buy trillions of dollars in debt, the Treasury must keep yields high.

Because 30-year mortgages are anchored to these yields, a high national debt makes it difficult for mortgage rates to ever return to the 3% or 4% levels of the past. Reducing the national debt would decrease the supply of bonds, lowering yields and finally allowing mortgage rates to settle at a lower, more sustainable natural level.

The Bottom Line

The Fed provides the weather, but the bond market (T-Bills) provides the tide. Whether it is a Fed move affecting an ARM or a Treasury shift affecting a 30-year fixed, these tiny increments are the levers that move the American Dream.

Sources and References

• NAHB “Priced Out” Study: Confirms every 0.25% rate increase excludes approximately 1.13 million households.
• NAR “Jobs Impact of an Existing Home Purchase”: Establishes that one job is generated for every two home sales.
• NAR 2026 Real Estate Forecast: Projects that a 1% rate drop triggers a 14% jump in total sales volume.
• Mortgage Bankers Association: 2026 average mortgage and application data.
• Congressional Budget Office: Data regarding the “crowding out” effect of national debt on yields.