Worried About Real Estate Market Instability? Read This First

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.

As housing affordability challenges persist and housing inventory remains tight, regional new construction trends offer a window into where there are still investment opportunities for fix and flippers. Rising permit activity points to strong demand and price appreciation, which is great for fix-and-flip real estate investors. However, supply-constrained markets in the Northeast can also offer unique, high-ROI opportunities despite low permit activity. That’s why LendingOne analyzed monthly housing permit data from the U.S. Census Bureau’s Building Permit Survey to see where single-family permit activity is ramping up—and where it is pulling back. These are our key findings: U.S. Housing Permit Activity: The 2025 Outlook March U.S. single-family housing permit activity remains above pre-pandemic levels, with permits in March 2025 up 21% from March 2019, and slightly below (-0.8%) March 2024 levels. However, U.S. single-family housing permit activity has still fallen -24% since 2021. Primary markets in the South continue to see the most single-family permits overall, but secondary markets across the Southeast, as well as some of the largest U.S. metros, have seen permit activity ramp up significantly over the last year. ✅ Fix and Flip Insight: Rising permits typically signal strong market interest and price appreciation, giving flippers a chance to ride momentum—especially in growing Southeast cities. Little Rock, Arkansas, saw a 175% year-over-year growth in single-family permit activity—the highest of any U.S. metro that issued at least 200 single-family permits in March 2025. U.S. Housing Permit Activity: The 2025 Outlook While new construction remains significantly below March 2021 levels, the latest data shows that even in the face of strained affordability, permit activity has stayed resilient. That being said, trends vary a lot by market. Top 10 U.S. Metros Where Permits Are Growing Fastest Among the housing markets that issued at least 200 single-family housing permits in March 2025, these cities led the nation in year-over-year growth: Little Rock, AR: +175% Jacksonville, NC: +54.9% Savannah, GA: +48.5% Winston-Salem, NC: +46% Oklahoma City, OK: +39.5% New York-Newark-Jersey City, NY-NJ: +38.6% Hickory, NC: +30.9% Birmingham, AL: +30.8% Greensboro-High Point, NC: +30.5% Knoxville, TN: +26% 🛠️ Fix and Flippers should take note of these fast-growing areas. Increased permits often correlate with buyer demand and neighborhood revitalization—both favorable conditions for profitable flips. Markets With the Biggest Permit Declines On the flip side, these metros saw the sharpest year-over-year declines in permit activity: Deltona-Daytona Beach-Ormond Beach, FL: -38.0% Jacksonville, FL: -37.3% Lakeland-Winter Haven, FL: -31.3% Salt Lake City-Murray, UT: -28.4% Punta Gorda, FL: -23.1% Virginia Beach-Chesapeake-Norfolk, VA-NC: -21.7% Hilton Head Island-Bluffton-Port Royal, SC: -20.6% Atlanta-Sandy Springs-Roswell, GA: -20.1% Washington-Arlington-Alexandria, DC-VA-MD-WV: -20.0% North Port-Bradenton-Sarasota, FL: -18.2% 🏘️ Fix and flip investors in these markets may benefit from less new construction competition, potentially increasing resale opportunities for rehabbed homes. Southern Secondary Markets Lead in 2025 Secondary markets in the South are taking center stage in 2025, with four North Carolina metros landing in the top 10 for biggest year-over-year permitting increases. These smaller cities often offer lower acquisition costs and growing populations—two crucial ingredients for successful fix and flip projects. Why Fix and Flippers Should Watch Permit Trends Home flippers should pay attention to housing permits as they provide valuable insights into future market conditions. An increase in single-family permits typically means more homes will be built, which could increase local inventory competition—something flippers want to keep an eye on when selling. For instance, when and where needed, builders aren’t afraid to roll out big incentives to move product. Tracking permit trends can also help fix and flip investors: Identify emerging neighborhoods Avoid areas at risk of overbuilding Spot rising renovation permit activity (a sign of investor competition) 📊 Overall, monitoring permits helps flippers make smarter decisions about timing, pricing, and location. Why Low-Permit Markets Can Be Gold for Flippers Some markets, particularly across the Northeast, have strict development regulations or simply lack space to build new homes, suppressing permit activity levels. This paired with strong demand means flippers in these markets have a particular edge. According to LendingOne’s analysis, while competition is high, these are the types of markets where flippers are seeing the highest ROI right now. Year-Over-Year Changed in Single Family Housing Permits By Metro High-Volume Markets: Where Builders Are Active In terms of volume, these metros issued the most permits for single-family homes in March 2025: Houston, TX: 4,709 Dallas, TX: 3,810 Phoenix, AZ: 2,372 Atlanta, GA: 2,130 Charlotte, NC: 1,622 Texas markets remain leaders in new construction, despite rising resale inventory and slight price corrections. For example, even with Houston home prices sitting -3.8% below their 2022 peak, according to the Zillow Home Value Index, permit activity still ticked up +0.2% year-over-year. 🔍 For flippers, this means keeping a close eye on how builders are pricing and positioning their homes. Single Family Housing Permits Authorized in March 2025 Fix and Flip Opportunities in Dense Coastal Cities Notably, both New York City and Los Angeles have seen a substantial jump in single-family permitting, indicating opportunities to buy, renovate, and resell homes in areas where new construction has traditionally been limited. Year-Over-Year Growth in Single Family Permit Activity These markets often come with high acquisition costs but can also offer big returns if flippers find the right property in the right neighborhood. The Bottom Line for Fix and Flippers in 2025 Big picture: While single-family permit activity is no longer booming like it was during the Pandemic Housing Boom, it’s still holding steady on a national basis. Fix-and-flip investors who are competing directly with homebuilders—meaning they’re selling a similar product to a similar buyer in the same area—will need to stay on their toes, given how constrained affordability is in today’s housing market.