Are Real Estate Rates Too High to Invest? Not If You Do This

We’ve heard it more often in 2025 than any time in recent memory: “I’m just going to wait for prices to drop a little more before I buy.” And we get it. Prices skyrocketed during the pandemic boom. Now that appreciation is slowing — or even reversing slightly in some markets — it’s easy to assume a bigger correction is just around the corner. But at LendingOne, we’ve helped thousands of investors buy through every kind of market cycle. And here’s what we can say with certainty: Trying to time the bottom rarely works. Smart investors buy the right deal — not wait for the perfect market. In this article, we’ll break down what’s really happening with pricing, what the experts are saying, and why waiting too long could cost you more than it saves. What the Market Data Says About Prices in 2025 Let’s get to the numbers. According to Redfin’s latest housing forecast: U.S. prices will fall by only ~1% by Q4 2025 The median sale price in April 2025 was $438,108, up 1.3% year-over-year Meanwhile, Case-Shiller’s national index showed home values up 3.4% year-over-year as of March 2025. And the National Association of REALTORS® forecasts home price growth of roughly 2% for full-year 2025.(Source: NAR Housing Forecast 2025) In simple terms? Yes, some markets are cooling. But prices aren’t crashing. Most experts predict a plateau or gentle correction — not a big drop. What If Prices Do Drop? Let’s Do the Math Let’s say you wait, and prices fall 2–3% later this year. If a property you’re looking at now costs $400,000, that means you could buy it later for $388,000 — a $12,000 discount. That sounds good — until you factor in what you’re losing by waiting: You’re missing out on rental income. That $400,000 property might generate $2,500/month in rent. Waiting six months = $15,000 in lost income. You’ll face more competition later. If rates drop or prices start going up again, more buyers will jump in — and prices will go up. You’re still exposed to inflation. Your cash loses value sitting idle. Even modest 3–4% inflation eats into your buying power. The property you want might not be available. There’s no guarantee the “right” deal will still be there. In short: a small discount doesn’t always beat the opportunity cost of inaction. What Smart Investors Know About “Market Timing” Here’s a truth that experienced investors understand: You don’t wait to buy real estate — you buy real estate and wait. Why? Because long-term value creation in real estate comes from: Equity buildup through loan amortization Market appreciation over time Rising rents and tax advantages Creative improvements that boost property value None of that happens while you’re sitting on the sidelines. Real Estate Is Still Undersupplied — Even in a Slower Market One reason prices haven’t dropped more is supply. The U.S. housing market is still millions of units short of what’s needed to meet demand, according to data from Freddie Mac and the National Association of Home Builders. As of April 2025: Inventory of existing homes rose to 1.45 million units — up from the extreme lows of 2021–2022, but still short of a balanced market. New home construction has slowed due to rising costs and builder caution, adding further pressure to supply. This imbalance is what keeps prices from crashing — and why many investors are still buying today, even at current price points. What You Should Do Instead of Waiting We’re not saying “buy anything right now.” But we are saying this: If you find a property that: Cash flows at today’s interest rates Is in a location with strong rental demand and economic growth Fits your investment criteria for hold time, risk, and equity potential …then it’s worth serious consideration — regardless of what might happen to prices in six months. At LendingOne, we’re seeing our most experienced clients do the following: Buying on Cash Flow, Not Hype They’re not hoping for 3-4% annual appreciation — they’re buying properties that cash flow from day one. Using Adjustable or Bridge Loans to Stay Flexible Some are using shorter-term loans to capture equity now, with the option to refinance later if rates or prices move. Negotiating Harder With less competition, there’s more room to ask for concessions, credits or better terms — especially on fixer-uppers or longer-DOM properties. Final Thought: “Perfect Timing” is a Myth It’s natural to want the best deal. But the truth is, no one — not even the best analysts — can consistently call the bottom of any market. What matters more than buying at the lowest price is buying the right property, at the right terms, with a plan to hold and operate it profitably. The right time to buy isn’t when everything feels safe. It’s when you’re prepared, the numbers work and you’re ready to move. Talk to LendingOne About Your Purchase Plan Still feeling cautious? That’s normal. We’d be happy to walk you through financing options based on today’s rates — and help you model how different price and rent assumptions impact your returns. → Contact LendingOne Today

Economic uncertainty is back in the headlines. With new tariffs, global tensions, stubborn inflation and talk of a slowdown, it’s no surprise some real estate investors are getting cold feet. You might be asking: “Should I really be investing in real estate right now when the overall economy feels shaky?” It’s a fair question — and one we’re hearing more often in 2025. At LendingOne we believe the answer isn’t a hard yes or no. It’s about perspective, planning and understanding why real estate behaves differently than many other asset classes during economic shifts. Here’s why smart investors aren’t backing down — and how they’re adjusting to stay ahead. The Big Picture: Slower, Not Stopped Let’s look at the numbers. The US economy is growing — just not as fast. According to the Bureau of Economic Analysis (BEA) Q1 2025 GDP was 2.2%, below expectations but still good. Unemployment is at 4.0% and consumer spending is holding even with tighter budgets. But investor sentiment is being spooked by: New tariffs on Chinese goods which have increased costs for builders and developers. Concerns about a consumer slowdown in Q3. Global instability which adds uncertainty to supply chains and equity markets. But major real estate markets — residential and small to mid-size commercial — are stable. Why Real Estate Performs Differently During Economic Volatility Real estate doesn’t react to every economic twitch like equities or crypto. Here’s why: Real Estate is a Hard Asset Real estate is physical. It provides shelter, utility and income — all things people need regardless of market cycles. In uncertain times many investors rotate into hard assets to hedge against currency shifts, inflation or market volatility. Real Estate Gives You Control  You can’t control the Fed’s interest rates. But as a real estate investor you can: Set your own rents Renovate to increase value Refinance when rates drop That kind of control is priceless in uncertain times. Real Estate Cash Flows Dividend stocks pay out a few times a year. Crypto doesn’t cash flow at all. But rental properties? They cash flow every month — and often increase with inflation. According to Zillow, US median rent prices are up 3.2% year over year as of April 2025 — slower than the pandemic peak but still growing. In most areas, rents are holding strong even as home prices level off. What Investors Are Worried About — And How to Respond Objection 1: “Tariffs are increasing construction and material costs.” Reality: That’s true — especially for new builds. But this also tightens future inventory which can increase the value of existing properties. Investors focused on value-add renovations or turnkey rentals may actually benefit. Pro Tip: If you’re building or renovating, lock in pricing with contractors and suppliers early. Also, look at areas where new supply is already constrained — these tend to hold value better. Objection 2: “The economy will go into recession.” Reality: A slowdown isn’t a crash. And historically real estate has often remained resilient — or even appreciated — during mild recessions especially in undersupplied areas. Did You Know? During the 2001 recession US home prices still rose 6.6% nationally.  Even during the 2020 pandemic prices surged as demand outpaced supply. Today housing supply is still below long term averages so even a small drop in demand won’t collapse the market. Objection 3: “My other investments are down — I don’t want to overextend.” Reality: Diversifying into real estate may actually help stabilize your overall portfolio. The correlation between stock market returns and housing is low — they don’t tend to move together. When stocks zig, real estate may zag. Consider: Short- or mid-term rental properties in cash flowing markets. These can produce immediate income while allowing for appreciation over time. What Smart Investors Are Doing in 2025 At LendingOne we’re seeing three key behaviors from experienced investors in this economic climate: They’re Stress Testing Their Deals Investors are modeling conservative rent assumptions, factoring in possible price drops, and underwriting to higher interest rates — and still moving forward when the numbers work. They’re Building Liquidity Having reserves doesn’t mean you’re scared. It means you’re ready. The investors who move fastest when a deal appears are the ones who have access to capital, flexible terms and pre-approved financing. They’re Playing the Long Game Economic cycles come and go. The investors who succeed think in 3-, 5- or 10-year horizons. They know short term turbulence doesn’t stop long term equity growth, rental demand or portfolio expansion. Practical Advice for Investors Feeling Economic Pressure Here are a few things you can do today: Run deal analysis at higher rates and lower rents. If it still works — it’s probably a good move. Focus on local economic data, not just national headlines. Some markets are still growing jobs and population even if national sentiment is negative. Explore bridge financing or shorter loan terms. This can help you stay flexible as the macro picture evolves. Work with lenders who know how to navigate cycles. (That’s us.) Final Thought: Chaos Doesn’t Cancel Opportunity — It Reshapes It Every investor remembers moments when fear ruled the market — and when those who acted early came out ahead. Yes, the economy feels uncertain. But when you zoom in on the data, fundamentals and trends in housing the story becomes clearer: Real estate is one of the most controllable, durable and income generating assets you can own — even when the economy feels shaky. If you’re feeling uncertain but want to keep looking at opportunities let’s talk. Talk to a LendingOne Advisor about structuring a financing plan that works in this environment. Whether you’re buying your first deal or scaling your portfolio we’re here to help you invest with clarity — not fear.

Uncertainty is part of every real estate cycle — but in 2025, it feels especially personal. Investors aren’t just watching interest rates or price charts; they’re reading headlines about volatility, inflation, and market corrections. If you’ve looked at a deal recently and thought, “I’m not sure if this is the right time”, you’re not alone. But stepping back too far can mean missing the window where smart investors find their edge. At LendingOne, we believe today’s market doesn’t call for inaction — it calls for better strategy. In this article, we’ll break down what’s really happening, why instability doesn’t necessarily mean risk, and how to invest confidently even when conditions feel uncertain. The Market Has Shifted — But It Hasn’t Collapsed The term “unstable” often stems from comparison. If you’re comparing 2025 to the overheated pandemic-era market of 2020–2022, yes — things feel different. But different doesn’t mean broken. As of April 2025: The median existing home price in the U.S. was $414,000, up 1.8% year-over-year, according to the National Association of REALTORS® (NAR). Housing inventory rose to 1.45 million homes, a 20.8% increase compared to last year — the highest level in nearly five years. Existing-home sales are running at a pace of 4.00 million, which is about 75% of pre-pandemic levels — steady, not plummeting. Meanwhile, the Case-Shiller Home Price Index — considered a gold standard for U.S. price trends — reported that national prices were up 3.4% year-over-year in March 2025.(Source: S&P Dow Jones Indices) So what’s really going on? The market is no longer in frenzy mode — and that’s a good thing. Volatility ≠ Risk: Why Stabilization Creates Opportunity Let’s be honest: 2021’s 20%+ price spikes were unsustainable. The correction we’re seeing now — slower sales, more days on market, and leveling prices — isn’t a warning sign. It’s a return to fundamentals. In fact, several factors suggest a more balanced, investor-friendly market is emerging: More supply means more choice. Investors can now find deals, negotiate terms, and avoid bidding wars. Price growth is normalizing. No bubble behavior — just steady, inflation-aligned appreciation. Rent growth remains strong in many metro areas, helping support investment properties even if appreciation slows. Here’s the truth: a volatile market shakes out the noise. When casual buyers step back and overleveraged players exit, savvy investors step in. What Are Smart Investors Doing Right Now? At LendingOne, we’re seeing the most successful clients take the following approaches: They’re Adjusting Expectations — Not Sitting Still No one’s expecting 15% year-over-year gains anymore. But smart investors don’t need a bull market to make money — they need good fundamentals. They’re buying properties with positive cash flow They’re building equity through rehab and repositioning They’re evaluating deals conservatively — with real-world rent and interest rate assumptions They’re Leaning Into Data, Not Headlines While media narratives often focus on “cooling” or “correction,” experienced investors look closer. Redfin reports that 44% of home sellers offered concessions to buyers in Q1 2025 — a strong indicator that it’s becoming a buyer’s market. They’re watching: Inventory trends in local markets Rent vs. price ratios Economic growth and employment in target metros They’re Using Flexible Financing With interest rates fluctuating, finding flexible financing structures matter now more than ever. Many are: Using interest-only loans for fix and flips Structuring Fix to Rent (BRRRR) strategies allowing them to capture equity now and refinance later into a long-term hold. Locking in rates now, with plans to refinance if/when rates fall Common Misconceptions About Instability Let’s debunk a few myths: Prices are about to crash. No major forecast shows a crash. Even Redfin — one of the more conservative analysts — only projects a ~1% price dip by end of 2025. There are no good deals. Actually, we’re seeing more negotiable deals than in the last 3 years — especially for value-add projects or properties with cosmetic issues. It’s better to wait. Maybe — but not always. Waiting means: Paying rent or missing rental income Competing with more buyers later if rates drop Missing out on unique deals available now Real Talk: What We’d Tell a Cautious Investor If you’re holding back because the market feels uncertain, we get it. It’s smart to be cautious. But here’s what we’ve seen after working with thousands of investors: “Uncertainty often leads to opportunity. The best deals aren’t found when everyone’s feeling confident — they’re made when others hesitate.” 2025 isn’t perfect. But you don’t need perfect conditions to make money in real estate. You need: Realistic expectations A clear plan The right partners (on the ground and on the financing side) What Can You Do Today? Not ready to buy tomorrow? That’s fine. But you can still prepare: Run the numbers on a few sample deals at today’s rates Talk to local brokers about inventory Speak to a LendingOne loan advisor about flexible loan options Identify 2–3 target markets and start tracking DOM, pricing and rental comps Final Thought: Controlled Uncertainty Is Your Friend The investors who will win in 2025 aren’t the ones waiting for the dust to settle. They’re the ones who can see through the fog — and move forward with a plan. If you want help making sense of the market or need a second set of eyes on a deal, our team is here to help. LendingOne works with thousands of real estate investors across the country and knows how to lend — and lend smart — in any market. Talk to a LendingOne Advisor today about opportunities in your market. We’ll help you assess risk, run projections and build a financing plan for this environment.