Is the Real Estate Market Adjusting — or Opening Up Opportunity?

Let’s not beat around the bush — financing real estate in 2025 is more expensive than it has been in years. As of late May, the average 30-year fixed mortgage rate is 6.86% and many investors are wondering if deals can still work. At LendingOne, we hear it all the time: “Rates are too high — I’m just going to wait until they come down.” But waiting on rates — just like waiting on prices — has real risks. The truth is, higher rates don’t eliminate opportunity. They reshape it. Let’s break down what’s going on with rates, why this market still works for smart investors and how to structure deals that make sense at today’s rates. What’s Really Going On With Rates? As of May 23, 2025: The average 30-year fixed mortgage rate is 6.86% 15-year fixed is averaging 6.13% 5/1 ARMs are sitting at 6.28% These rates are way above the super low rates of 2020–2021. But they’re also far below historical highs. For context: In the 1980s, mortgage rates were over 16% Between 2000–2010, rates averaged 6.3% From a 50-year historical view, today’s rates are close to the long-term average So this is normal — and investors who learn to navigate this will have an edge. Why High Rates Aren’t a Deal Killer Real estate investing isn’t about getting the lowest rate — it’s about getting the right deal that works at today’s terms. Here’s how smart investors are approaching it: They’re Buying Based on Cash Flow — Not Rate Alone Let’s say you buy a rental property at 6.9% interest and it still cash flows. Would it be nice to finance that at 5.5% instead? Of course. But if the deal works now — it’s already a good deal. When rates drop later (and they will) you can refi. But the cash flow and equity you’re building in the meantime doesn’t wait. Smart investors lock in a deal they like and refi later if/when rates improve. They’re Using Creative Financing Structures Many LendingOne borrowers are: Choosing interest-only loans to reduce initial payments during renovations of fix and flips. Using the BRRRR strategy to lock in short-term bridge loans to then refinance later into a long-term hold.  Lock in now with current rates and refinance later when rates drop  These structures mitigate the impact of high rates — especially for investors with defined exit strategies. They’re Negotiating More Aggressively High rates mean fewer buyers, which often means more motivated sellers. According to Redfin: 44% of home sellers offered concessions in Q1 2025 Days on market has risen to 40+ days on average, giving buyers more leverage  This creates room for: Price reductions Seller credits (rate buydowns, repair credits, etc.) Favorable terms in off-market deals So while rates may be higher, the total deal structure can actually be more favorable. Real-World Scenario Let’s say you’re buying a multifamily property listed at $650,000. At a 6.9% interest rate on a 30-year loan, your monthly principal and interest is about $4,285. That sounds high — until you see: The gross monthly rent is $7,800 You negotiate $10,000 in seller concessions You plan to refi in 18 months if rates fall to the projected 6.0%–6.2% By year two, your effective cost basis may be significantly reduced — and you’ll already have built equity, collected rent and improved the property value. When you do this: If rates drop,  stay flat or rise slightly, you’re still not investing. And in the meantime, you’ve lost potential rental income, appreciation and deal opportunities. Waiting for the “perfect” rate often means missing the best deals. How to Invest at Today’s Rates We recommend to LendingOne clients: Underwrite conservatively. Run numbers at current (or slightly higher) rates to stress-test the deal. Prioritize cash-flowing assets. Passive appreciation is uncertain. Income pays the bills. Use bridge or interest-only options when appropriate. Especially helpful for value-add and fix-and-flip projects. Have an exit plan. If you plan to refi, know when and under what conditions you’ll do it. Talk to a lender early. Get clarity on loan terms, amortization schedule and cash requirements — so you can move fast when a deal appears. Final Thought: Rates Are Just One Variable It’s easy to get fixated on rates. They’re headline-grabbing and easy to compare year over year. But the best investors see the big picture: Cash flow Equity gain Market growth Negotiation leverage Long-term wealth creation Rates matter. But they don’t determine success — your strategy does. Want to See if a Deal Still Works at Today’s Rates? We’ll help you analyze it. → Talk to a LendingOne Advisor today. We’ll run through financing scenarios, compare structures and help you decide if now is the right time to move — even with rates where they are. Because waiting for the “perfect” conditions? That’s rarely how great portfolios are built.

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.