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Why Lagging Inflation Data Could Unlock Real Estate Opportunities This September

housing market real estate prices business analytics

Let’s dive into a timely economic topic that’s buzzing in real estate circles: how potentially overstated inflation figures could pave the way for favorable conditions in the housing market, especially with the Federal Reserve’s upcoming meeting on September 17, 2025.

people holding a miniature wooden house

This is particularly relevant for real estate agents guiding clients, buyers eyeing their dream home, and sellers looking to capitalize on improving market dynamics.

Let’s break it down step by step, drawing from recent analysis by MBS Highway and current market data.

The Inflation Disconnect: BLS Data vs. Real-Time Reality

Inflation metrics like the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) are key drivers of Federal Reserve policy, influencing everything from interest rates to mortgage affordability. But here’s the catch: these official numbers might be painting an overly pessimistic picture due to methodological quirks.

According to a recent MBS Highway snippet, Zillow’s Observed Rent Index showed blended rents decelerating to just 2.6% year-over-year in July— a clear sign of cooling in the rental market. In contrast, the Bureau of Labor Statistics (BLS) relies heavily on imputed data, such as Owners’ Equivalent Rent (OER), which stood at 4.1% in their calculations. OER essentially estimates what homeowners would pay if they rented their own homes, but it’s based on surveys and guesswork rather than real-time transaction data.

codes on tilt shift lens

When you adjust the Core CPI using Zillow’s more granular, market-based figures and apply the appropriate weightings (shelter costs make up about a third of CPI), the inflation reading drops significantly.

MBS Highway estimates Core CPI is overstated by 0.5%, meaning it would clock in at 2.6% instead of the reported 3.1%. Similarly, Core PCE— the Fed’s preferred gauge— is overstated by 0.2%, landing at 2.6% rather than 2.8%. These adjustments even account for external factors like tariffs, which add some upward pressure but are hard to quantify precisely.

The bottom line? The BLS’s use of lagging, imputed data could be inflating perceptions of economic heat. If policymakers shift toward real-time sources like Zillow’s index, we might see a more accurate (and lower) inflation narrative.

Fed Rate Cuts on the Horizon: What It Means for Real Estate

This discrepancy matters because it directly ties into the Fed’s actions. With inflation appearing stickier than it might actually be, the Federal Open Market Committee (FOMC) has been cautious. However, markets are now pricing in a strong likelihood of a 25-basis-point rate cut at the September 17, 2025, meeting— with over 85% odds according to CME FedWatch data.

person holding u s dollar banknotes

Economists from firms like J.P. Morgan and Nomura have brought forward their forecasts, expecting this cut amid signs of a softening labor market and broader economic cooling.

Lower federal funds rates typically translate to reduced mortgage rates, making borrowing cheaper. If the Fed acknowledges that inflation is lower than BLS figures suggest (perhaps influenced by real-time data), we could see even more aggressive easing.

This is a game-changer for the real estate sector, where high rates have sidelined many participants in recent years.

Rising Inventory: A Buyer’s Market in the Making

Compounding this opportunity is the steady improvement in housing inventory. As of July 2025, active listings nationwide reached over 1.1 million— up 28.9% year-over-year in June and continuing to surge.

Regions like the West and South are seeing the biggest gains, with increases of 32.5% and 25.4%, respectively. This shift toward pre-pandemic levels means more choices for buyers, potentially easing price pressures and creating negotiating leverage.

For real estate buyers: If Zillow’s rent data proves more reflective of true shelter costs, corrected inflation could accelerate rate cuts, lowering your monthly payments.

Home with magnifier

With inventory climbing, now’s the time to lock in a property before competition heats up. Imagine securing a low-cost mortgage that fits your long-term goals— building equity and wealth for generations.

For sellers: More buyers entering the market due to affordability improvements could mean quicker sales and stronger offers. But don’t wait too long; as inventory grows, the balance might tip further toward buyers.

For agents: Educate your clients on these dynamics. Highlight how overstated inflation might be holding back rate relief, and position September’s Fed decision as a pivotal moment. Tools like Zillow’s real-time insights can help demonstrate market realities beyond official stats.

Seizing the Moment: How I Can Help

As The Lending Coach, I’m all about transparency and tailoring solutions to your needs.

Whether you’re a first-time buyer in Arizona, or an agent partnering on deals in California, let’s chat about how a potential rate cut could work in your favor.

I love building relationships over the phone— by reaching out to me today, we can begin to explore options.

If it’s easier, you can schedule a call with me here…

The Lending Coach

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

The Power of Home Ownership

Cut out home in sky

Imagine turning your monthly expenses into a growing investment, something that could multiply your net worth exponentially.

Billionaire Andrew Carnegie famously said that 90% of millionaires got their wealth by investing in real estate.

Green painted house

Not a lot of people know this, but the average homeowner’s net worth is 40 times that of a renter.

Right now, if you’re renting, you’re paying someone else’s mortgage, essentially filling their pockets, but getting zero in return for your own financial future.

Enter home ownership. It’s not just a roof over your head; it’s equity in your pocket. In fact, on average, two-thirds of a person’s net worth comes from home equity!

Plus, home values continue to appreciate. Case-Shiller recently reported that national home prices saw an annual gain of 5.4% for June, hitting another all-time high!

Switching from renter to homeowner is simpler than you might think. It’s a strategic move towards securing your financial future.

black handled key on key hole

Just ask Peter Hernandez of Teles Properties:

“Most millionaires I know made more money from owning real estate than any other investment. Real estate consistently increases in value over time and outperforms other investments.

Plus, it isn’t as vulnerable to short-term fluctuations as the stock market. You get a tangible, usable asset, whether you’re renting out an apartment or commercial building for income or buying a home. And there can also be tax benefits for investment properties.”

Do reach out to me for help, as it would be my pleasure to work with you to explore a personalized buy vs rent scenario tailored just for you.

The Lending Coach

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

Today’s Wealth Creation Opportunity in Housing

hard cash on a briefcase

Articulating the financial opportunity that exists in homeownership is more important than ever. Especially as media misinformation continues to spread doom and gloom about the housing market – and endlessly predicting crashing home prices…incorrectly, of course.

Cart with cash and house

The reality is that national home price gains continue…and in fact have reached new record highs, even in the face of high mortgage rates and rising inventory!

Home Prices

The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.3% from April to May after seasonal adjustment, breaking the previous month’s all-time high.

The 0.3% gain is the seasonally adjusted number, which considers the typically stronger appreciation seen during this time of the year. The non-seasonally adjusted figure showed that home values rose 0.9% in May alone.

Home values in May were also 5.9% higher than a year earlier, following a 6.3% annual gain in April.

Case Shiller Home Price Index

The deceleration in the annual reading was due to a larger home price appreciation figure from May 2023, which was removed from the rolling 12-month calculation when the figure for May 2024 was added.

S&P DJI’s Head of Commodities, Brian D. Luke, explained, “While annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging. Our home price index has appreciated 4.1% year-to-date, the fastest start in two years.”

Should Buyers Wait?

Luke also addressed the crucial question many prospective buyers have wondered about: Should I wait for rates to move lower before buying a home?

He noted that all 20 cities in their composite index have observed annual gains for the last six months as “the waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers as home prices march forward.”

black handled key on key hole

And Case-Shiller was not alone in their reporting, as home price gains have also been seen in the other major indexes across the country. CoreLogic’s Home Price Index showed that prices rose 0.6% in May after rising 1.1% in April and 1.2% in March, confirming it’s been a strong season for home values nationwide.

Prices are also 4.9% higher when compared to May of last year.

In addition, ICE (formerly known as Black Knight) reported that national home values rose 0.3% in May after seasonal adjustment, with their index showing that prices are 4.6% higher than a year ago.

The Federal Housing Finance Agency’s House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts, also showed that home prices were flat in May and are up 5.7% year over year.

In Conclusion

The bottom line is that housing still proves to be one of the best investments for wealth creation. And it’s not too late for people to start building wealth through homeownership.

As the famous Chinese Proverb says, “The best time to plant a tree was 20 years ago. The second best time to plant a tree is today.”

Reach out to me for more information, as I’d be happy to strategize with you to see how can best take advantage of today’s real estate opportunities!

The Lending Coach

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

Residential Real Estate | One of the Best Investments Available

Home with pool

Investing in residential real estate and adopting a strategy of buying and holding properties can be a smart and rewarding financial decision for multiple reasons.

Don’t take my word for it…just look at this example:

Graph with house

In 1971, the interest rate for a primary residential mortgage was 7.33%.  If you waited for interest rates to go down, you wouldn’t have purchased a home until 1993.

You would have rented for 22 years waiting for rates to go down.  Over those 22 years, the value of residential real estate essentially quadrupled. Don’t wait to buy real estate…buy it and wait. 

Marry the house, but date the rate, as you can always refinance when rates go down.

Consistent Appreciation

Residential real estate has historically shown the remarkable ability to appreciate in value over time with relatively little risk.  While market fluctuations do occur, long-term trends clearly indicate an increase in property values.  See the chart below:

Home appreciation chart

Only 7 times in the last 80 years has real estate decreased in value!

This appreciation can lead to substantial gains for investors who hold onto their properties for extended periods, building significant wealth through asset appreciation.

Rental Income

Additionally, rental income generated from residential properties offers a consistent cash flow stream. Owning rental properties can provide a steady source of income, helping investors cover mortgage payments, property maintenance costs, and potentially yield profits.

a house for rent placard

Moreover, as rents tend to rise over time, owning residential real estate can provide a hedge against inflation, with rental incomes increasing along with housing demand.

Leverage

Another advantage of buying and holding residential real estate is the ability to leverage. Real estate allows investors to use leverage by financing a portion of the property’s purchase price through a mortgage.

This means investors can control a more substantial asset with a relatively smaller initial investment. As the property appreciates, the equity in the property grows, amplifying the return on the initial investment.

In Conclusion

Buying and holding residential real estate is one of the best wealth related strategies due to the potential for long-term appreciation, consistent rental income, and leveraging future opportunities.

Please do reach out to me for more, as it would be my pleasure to do some long term planning analysis to help you reach (and even exceed) your financial goals!

Lending Coach Title Bar

Inflation and Real Estate – Should Buyers Wait? History Says “NO!”

Zoomed Out Picture of Neighborhood

Inflation is hot…and so is real estate.  But what does the future hold for both?

a laptop with graph on screen

As we’ve talked about before, the Federal Reserve is late to the party in dealing with inflation and the latest data shows the rate of inflation is still rising.

Many are feeling the pinch in their wallets, at the gas pump, and at the grocery store.

For would-be real estate buyers that just begs the question…is now a good time to purchase a home?

I’m linking to an article from the real estate blog Keeping Current Matters, and the author does a great job in highlighting why now might be a very good time to buy.  You can access the entire article here…

Picture of Greg McBride

Greg McBride, the Chief Financial Analyst at Bankrate, explains how inflation is affecting the housing market:

“Inflation will have a strong influence on where mortgage rates go in the months ahead…Whenever inflation finally starts to ease, so will mortgage rates — but even then, home prices are still subject to demand and very tight supply.”

While there’s no denying it’s more expensive to buy and finance a property this year than it was last year, it doesn’t mean potential buyers should pause their search. Here’s why…

History Says So – Real Estate Is A Great Hedge Against Inflation

During periods of inflation, prices generally rise across all areas of the economy.

white concrete building

Historically, however, real estate ownership is a fantastic protection against those increasing costs because buyers can “lock-in” what’s likely the household’s largest monthly fixed cost for the duration of your loan.

Not to mention, as property prices continue to appreciate, the home’s value will, as well.

That’s why Mark Cussen, Financial Writer at Investopedia, says:

“Real estate is one of the time-honored inflation hedges. It’s a tangible asset, and those tend to hold their value when inflation reigns, unlike paper assets. More specifically, as prices rise, so do property values.”

Secondly, nearly all industry experts agree that although the current rate of home appreciation can’t stay this hot, the likelihood of homes losing value is extraordinarily slim. As Selma Hepp, Deputy Chief Economist at CoreLogic, says:

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Warning Sign with Arrow Labeled Inflation

In Conclusion

Purchasing real estate is one of the best financial decisions that can be made during inflationary times. Buyers also receive the advantage of the added security of owning their property in a time when experts are forecasting prices to continue to rise.

If you are considering a purchase, your real estate search shouldn’t go on hold because of rising inflation or higher mortgage rates.  Contact me for more…as it would be my pleasure to help you.

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