Why Real Estate Still Makes Sense in Today’s Economy

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.

At LendingOne, we work with real estate investors every day—from early-stage investors  to seasoned pros with large portfolios. In 2025, investors are navigating a different environment than the boom years of the early 2020s. With economic signals mixed and uncertainty in the air, it’s no surprise that investors are asking smart, cautious questions before making their next move. The good news? Many of these questions can be addressed with the right strategy, supporting data, and flexible financing. Below, we break down the five most common themes we’re hearing—and how today’s market shifts can be turned into opportunities. Question 1: Is the Market Too Unstable to Invest Right Now? Answer:  The market looks different than it did during the surge of 2021 and 2022. Volatility has replaced predictability—but that doesn’t mean it’s time to sit on the sidelines. In fact, volatility often creates opportunity. According to the National Association of REALTORS® (NAR), pending home sales began to recover in early 2025, with existing-home sales projected to rise nearly 9% this year. This rebound signals renewed confidence from buyers and sellers. And while home price growth has slowed, it hasn’t reversed. Redfin reports that U.S. home prices are up ~1% year-over-year as of April 2025. That’s a sign of stability, not collapse. For savvy investors, a transitional market often means better deals. With fewer buyers competing, there's more room to negotiate and more power at the table. In fact, nearly 45% of home sellers in Q1 2025 offered concessions like closing cost assistance or rate buydowns. Opportunity: Investors who act strategically while others hesitate can access better pricing, less competition, and improved deal terms.  See how investors are protecting themselves from broader economic shifts. [Read the full article on economic fears and real estate →] Question 2: Can Real Estate Still Protect Me from Economic Uncertainty? Answer: It’s true that tariffs and global economic uncertainty have increased material costs and investor caution. For example, the National Association of Home Builders estimates that recent tariffs have added around $9,200 to the cost of a new home. But here’s the bigger picture: real estate is historically one of the strongest hedges against volatility. Unlike equities or crypto, real estate is a tangible, income-producing asset that you can control. You decide how it’s financed, how it’s improved, and when it’s sold. More importantly, today’s housing fundamentals are far stronger than they were in 2008. According to ATTOM, 47% of U.S. mortgage holders are now “equity rich,” and just 2.5% are underwater. That gives the market a cushion and reduces systemic risk. Opportunity: In uncertain times, real estate allows for strategic, controllable investing—especially when paired with conservative underwriting and flexible loan options. Want to know how experienced investors navigate volatility? [Read our full breakdown of market stability concerns →] Question 3: Should I Wait for Prices to Drop Before I Buy?  Answer: Many investors are wondering if prices will drop further—and whether it’s smarter to wait. But most indicators point to a plateau, not a plunge. NAR forecasts home prices to rise around 2% in 2025, while Redfin expects a modest 1% national decline. Meanwhile, Freddie Mac estimates the U.S. remains short 4.5 million housing units, meaning supply-side pressure is still driving long-term demand. Trying to time the market perfectly is difficult—often impossible. And while you wait, you could miss out on cash flow, appreciation, or favorable inventory. Opportunity: If the numbers work today—even with current prices—it’s worth moving. Investors who act based on cash flow and long-term goals, not predictions, tend to outperform those who sit on the sidelines. Here’s why trying to time the market rarely pays off. [Explore our take on price timing and investor strategy →] Question 4: Are Interest Rates Too High to Make a Deal Work? Answer: While rates are higher than a few years ago, most experts predict we’ll see rates drop later in 2025, potentially opening the door for refinancing. As of May 2025, the average 30-year fixed mortgage sits around 6.7%. But that’s not historically extreme. In fact, the 50-year average is 7.7%. In the meantime, smart investors are finding ways to make deals work at today’s rates. One reason: seller flexibility. Nearly 44% of sellers are offering concessions like rate buydowns or closing cost credits, giving buyers more room to improve loan terms. Our clients are also leveraging: Fast closings to help compete and win deals  No income verification for a smoother approval process  Flexible terms tailored to each investment strategy  High leverage options to help with scalability Opportunity: Rather than waiting for rates to drop, focus on building deals that cash flow now—with financing that adapts to your strategy. Rates are just one piece of the puzzle. Learn how investors are making deals pencil anyway. [Read more about investing with high interest rates →] Question 5: Does a Market Correction Mean I Should Wait? Answer: Some investors are concerned about “market corrections”—but not all pullbacks are bad. After years of record growth, stabilization is a natural and necessary adjustment. Consider this: the median U.S. home price rose over 40% between 2015 and 2024. A minor 5% pullback in overheated metros isn’t a crash—it’s normalization. Experts see the current shift as healthy for the market. A slower pace of growth: Reduces speculation Gives buyers more negotiating power Encourages long-term thinking We’re seeing prepared investors step in while others wait, acquiring strong assets at prices below peak levels and using long-term financing to hold or reposition them. Opportunity: A cooler market isn’t a warning—it’s an opening to invest with discipline, structure, and a focus on sustainability. Not all corrections are red flags. See why normalization could work in your favor. [Read more about market corrections and what they mean for investors →] Conclusion: Opportunity in Every Market Today’s market isn’t without challenges—but it’s far from uninvestable. In fact, our experienced clients see this environment as ideal: more motivated sellers, less competition, and plenty of ways to structure a deal that works. Every question above is valid. But when you dig deeper, the data shows a market that’s correcting—not collapsing—and a lending landscape built to support investors who think long term. At LendingOne, we’re here to help you evaluate the landscape, structure financing around your goals, and move forward with clarity and confidence.

Rental vacancy levels vary significantly across U.S. metros as local supply pipelines, population growth, and other market dynamics pull vacancy rates in different directions. In some markets, a flood of new units, ushered in during the Pandemic Boom building frenzy, has outpaced demand, pushing vacancies higher. In other markets, limited new construction and steady renter demand are keeping vacancies low and rents competitive. Why Vacancy Rates Matter for DSCR Loans DSCR loans—designed for financing income-producing rental properties—depend on one key metric: how well the property’s cash flow covers its debt obligations. For this reason, rental vacancy rates should be a key indicator for real estate investors if they are considering this type of loan. In tightening markets, vacancy rates are falling and rental income is strengthening, creating a more favorable environment for these loans. In softening markets, rising vacancies can limit cash flow and make it harder to meet loan requirements. 🏢 Tip from a DSCR lender: Lower vacancy means stronger rental performance, which improves your debt service coverage ratio—an essential qualifier for DSCR financing. Where Vacancies Are Rising or Falling Most LendingOne analyzed the latest U.S. Census Bureau data to identify the metros where rental vacancies are rising—and where they’re falling—to help investors assess where DSCR loans may be most viable. Here are our top-line findings: The U.S. rental vacancy rate rose to 7.1% in Q1 2025, up from 6.6% a year earlier—marking the highest level in six years. Among the largest 50 U.S. metros, Milwaukee, WI and Kansas City, MO saw the steepest year-over-year vacancy increases (+9.0 and +5.8 points, respectively). Metros with the lowest rental vacancy rates in Q1 2025 include Providence, Richmond, and California markets like Riverside, San Diego, San Jose, and Los Angeles—all below 4%. U.S. Rental Vacancy Rates The U.S. rental vacancy rate reached 7.1% in Q1 2025, marking its highest level since Q3 2018—perhaps the aftermath of Pandemic Boom-era construction activity, shifting migration patterns, and economic conditions affecting renters' affordability. 📉 For investors, this trend suggests a more competitive rental market, potentially leading to lower rents and increased incentives to attract tenants. However, opportunities may exist in regions with stable demand and limited new supply. Rental Vacancy Rates for America's 50 Largest Metro Areas   These are the 5 metros with the highest vacancy rates: Milwaukee-Waukesha, WI: 14.5% Kansas City, MO-KS: 12.5% Birmingham, AL: 12.3% Tampa-St. Petersburg-Clearwater, FL: 11.9% Houston-Pasadena-The Woodlands, TX: 11.6% These are the 5 metros with the lowest vacancy rates: Providence-Warwick, RI-MA: 2.2% Riverside-San Bernardino-Ontario, CA: 3.4% San Diego-Chula Vista-Carlsbad, CA: 3.7% Richmond, VA: 3.8% San Jose-Sunnyvale-Santa Clara, CA: 3.8% Beyond this snapshot of vacancy rates, it's critical to examine where vacancies are rising and falling across the country to understand the trajectory of rental supply and demand. In markets like San Francisco or New York City, vacancy levels are likely to remain lower than the national average due to sustained demand driven by limited housing supply, high population density, and a robust job market. Therefore, investors need to adopt a dynamic view of vacancy trends to assess long-term cash flow potential and risk, ultimately determining if the market is ripe for DSCR loan opportunities. ✅ Investors seeking DSCR loans may benefit from investing in low-vacancy markets with stable demand and limited new construction. Year-over-year rental vacancy rate shifts These are the 5 metros with the largest vacancy increases: Milwaukee-Waukesha, WI: +9.0% Kansas City, MO-KS: +5.8% Grand Rapids-Wyoming-Kentwood, MI: +5.6% Sacramento-Roseville-Folsom, CA: +5.3% Hartford-West Hartford-East Hartford, CT: +5.1% These are the 5 metros with the largest vacancy decreases: Richmond, VA: -4.6% Las Vegas-Henderson-North Las Vegas, NV: -3.7% Providence-Warwick, RI-MA: -3.5% Raleigh-Cary, NC: -3.2% Virginia Beach-Chesapeake-Norfolk, VA-NC: -3.2% 📌 Metros with falling vacancy rates, like Richmond and Las Vegas, indicate stronger rental demand—ideal for DSCR lenders and real estate investors looking to optimize financing. Investor Takeaway: Align Vacancy Trends With DSCR Strategy If vacancy rates continue to rise in high-supply metros, it may pose challenges for investors using DSCR loans, as weaker cash flow can affect loan eligibility. Conversely, metros with falling vacancy rates often offer: Higher rent stability Stronger DSCR coverage ratios Better conditions for securing financing with a DSCR lender Still, investors should consider other factors such as local job growth, economic resilience, and pricing trends before investing. Final Word for DSCR Loan Investors Big Picture: With rental vacancy rates reaching a six-year high, investors must understand where supply and demand are shifting to evaluate DSCR loan viability. Markets with rising vacancies present more risk. Markets with tightening vacancies create favorable conditions for long-term, cash-flowing investments. Whether you're a new or experienced investor, aligning market data with your DSCR strategy can make or break your next deal.