The housing market heading into 2026 still looks nothing like the boom-and-bust whiplash of the last few years. Sales activity remains muted, and while mortgage rates have returned to the headlines following announcements from President Trump, rates are still elevated as of January 2026—keeping affordability strained and demand constrained.

In January, the latest data points to a market that’s cooling, but uneven by region. Inventory remains higher than a year ago in many parts of the country, and a growing number of supply-heavy markets are seeing home prices soften. At the same time, construction and insurance costs remain key swing factors that investors need to underwrite carefully, as they can materially shape both pricing power and cash flow.

Every month, investors are hit with a flood of new housing market data to consider. Each data point helps paint a picture of the current state of the U.S. housing market, but there are a few signals that are essential for savvy real estate investors to pay attention to.

To cut through the noise and help you stay up to date on what’s happening in today’s housing market, here’s LendingOne’s January 2026 market recap.

Price drops: The investor buyer’s market is expanding in supply-heavy metros

While national home price growth has flattened, there is still a distinct dispersion across metros.

Among the 200 largest metros, 79 markets saw home prices fall year-over-year between December 2024 and December 2025. Many of these are pandemic-era boom markets that expanded supply the most and are now being forced to re-anchor price levels to local incomes as demand resets at today’s payment levels.

The five metros with the largest year-over-year price declines include:

• Cape Coral-Fort Myers, FL: -9.7%
• North Port-Sarasota-Bradenton, FL: -8.2%
• Naples-Marco Island, FL: -6.5%
• Austin-Round Rock-Georgetown, TX: -6.0%
• Tampa-St. Petersburg-Clearwater, FL: -5.2%

Housing markets where prices are dropping

Investor takeaway: The best buying windows tend to open when price declines coincide with rising inventory—but investors should stress test local fundamentals, including employment, supply pipeline, insurance costs, taxes, and demographics to separate temporary softness from longer-term risk.

Insurance: High carrying costs are quietly reshaping affordability

Housing affordability isn’t just about prices and mortgage rates anymore — carrying costs like homeowners insurance are becoming a larger part of the equation, especially in higher-risk regions.

The latest county-level data from economists at the National Bureau of Economic Research shows median annual home insurance premiums in 2024 ranged from under $1,000 to more than $8,000. The highest costs are concentrated in Florida, parts of the Gulf Coast, and additional high-cost pockets in other weather damage-prone markets.

Median annual home insurance premiums by county

Investors should be careful, as even if home prices are softening in Florida, that “discount” can get partially—or fully—eaten up by the rising carry cost burden—especially insurance.

Florida counties represent four of the five markets with the highest median annual insurance premium costs:

• Monroe, FL: $9,400
• Orleans, LA: $7,513
• Broward, FL: $6,865
• Miami-Dade, FL: $6,375
• Palm Beach, FL: $6,326

So even if an investor is buying a home at a markdown, the annual premium difference vs. a “normal” market can be thousands of dollars—which directly hits cash flow and affordability for end buyers.

Investor takeaway: Florida price cuts can create opportunity (especially for well-capitalized buyers), but in many coastal and storm-exposed counties, insurance can overwhelm the value of the discount, making the true “all-in” affordability equation worse even as prices fall.

New permits: Builders stay cautious on single-family starts

Construction remains one of the key swing factors for housing supply — and January finally brought an updated read on how the last quarter of 2025 fared for new builds after the shutdown-related delays.

Single-family residential permits in October 2024: 971,000

Single-family residential permits in October 2025: 878,000

Multifamily (5 or more units) residential permits in October 2024: 394,000Multifamily (5 or more units) residential permits in October 2025: 478,000

U.S. housing permits

The newly released data shows that single-family building permits fell -9.6% year-over-year from October 2024 to October 2025, while multifamily 5 or more unit permits grew +21.3% year-over-year from October 2024 to October 2025. 

This highlights a housing supply pipeline that remains split: single-family construction is easing, while multifamily continues to contribute new inventory.

Mortgage rates remain elevated, and some builders are still leaning on incentives to keep buyer traffic moving. That’s helping manage absorption—but it also highlights how carefully operators are protecting margins in today’s affordability-constrained market.

Investor takeaway: Falling single-family permits can support longer-term scarcity — but near-term conditions still depend heavily on active inventory and pricing behavior in each market. For investors, the key is understanding which metros are still “supply-heavy” vs. which are structurally constrained.

Inventory: Supply getting closer to “normal”—especially in the Sun Belt

Inventory remains the market’s pressure valve—and the clearest signal of how much leverage buyers and sellers have.

The latest read shows inventory continuing to rebuild across many Sun Belt and Mountain West markets, while a number of Northeast and Midwest metros remain meaningfully below pre-pandemic levels. 

In other words: supply is coming back, but it’s coming back unevenly—with some markets now sitting well above their pre-pandemic baseline (the places that were hottest in 2021–2022), and others still operating with inventory levels far below 2019 levels.

Active housing inventory for sale compared to pre-pandemic levels

The five metro markets with the highest Dec. 2025 inventory vs. pre-pandemic Dec. 2019:

• Memphis, TN-MS-AR: +54.9%
• Austin-Round Rock-San Marcos, TX: +53.8%
• Phoenix-Mesa-Chandler, AZ: +46.6%
• Tucson, AZ: +44.5% 
• Orlando-Kissimmee-Sanford, FL: +44.3%

The five metro markets with the lowest Dec. 2025 inventory vs. pre-pandemic Dec. 2019:

• Hartford–West Hartford–East Hartford, CT: −72.9%
• Chicago–Naperville–Elgin, IL-IN: −55.9%
• Providence–Warwick, RI-MA: −51.3%
• New York–Newark–Jersey City, NY-NJ: −43.8%
• Cleveland, OH: −40.0%

Buyer demand has reset to what buyers can actually afford at today’s monthly payments, more resale owners are listing as the “must-move” pool grows, and builders are siphoning off marginal buyers with rate buydowns and incentives. 

Inventory seems to be rebuilding fastest in the markets where affordability stretched the most—and where the Pandemic Housing boom pushed demand the highest.

Investor takeaway: Markets where inventory is above pre-pandemic levels tend to be where pricing power is weakening fastest — which can create better acquisition entry points—especially when paired with resilient rent fundamentals.

Forecasts: A little national home price growth is expected in 2026

Forward-looking expectations are increasingly important in a market where price appreciation is no longer guaranteed.

Zillow’s latest metro-level forecast projects that national U.S. home prices will rise +2.1% between December 2025 and December 2026, but the metro-level outlook spans a wide range—from expected declines in some markets to stronger projected growth in others. Most forecasters expect U.S. home prices to rise +1% to +3% in 2026.

12-month forecast for metro-level home price change between December 2025 and December 2026, according to Zillow

The five metro markets (among the largest 200) with the highest projected home price change between Dec. 2025 and Dec. 2026:

• Rockford, IL: +6.2%
• Green Bay, WI: +5.3%
• Knoxville, TN: +5.2%
•  Appleton, WI: +5.0%
•  New Haven, CT: +4.9%

The five metro markets (among the largest 200) with the lowest projected home price change between Dec. 2025 and Dec. 2026: 

• New Orleans, LA: -3.8%
• Lafayette, LA: -2.2%
• Austin, TX: -2.0%
• Shreveport, LA: -2.0%
• Denver, CO: -1.0%

Investor takeaway: Forecasts aren’t destiny—but they’re useful signals for spotting where pricing momentum is expected to stay weak vs. stabilize. Use this as a screening tool, then underwrite conservatively based on local inventory, affordability, and rent growth.

Big picture

January’s housing data reinforces the story of a market that is cooling—but not collapsing. Inventory remains higher than a year ago in much of the country, with some supply-heavy regions now above pre-pandemic levels. That’s translating into even more price weakening in select metros, even as other regions remain supply-constrained and comparatively stable.

The macro backdrop remains defined by affordability—and in 2026, policy and carrying costs (like insurance) are becoming a bigger part of the affordability conversation. Investors should stay selective, prioritize underwriting discipline, and focus on markets where rising inventory and softer pricing improve entry points while rental fundamentals remain stable.

The housing and real estate investment landscape continues to adjust after several years of extraordinary volatility. What we’re seeing today is not a return to the ultra-liquid, ultra-competitive conditions of 2021–2022, but rather a more balanced environment. One where discipline, local knowledge, and patience matter again.

From mortgage spreads and borrowing costs to inventory dynamics and regional divergence, the market is quietly recalibrating and getting more favorable for investors. For investors willing to lean into fundamentals rather than headlines, this period is beginning to offer real opportunity.

Below are 5 key themes to watch for this spring.

1. Inventory Is Creeping Higher—and Time Is Back on the Investor’s Side

Another notable shift is on the supply side. While new listings aren’t surging dramatically, days on market are rising—which is increasing months of supply—and that alone is enough to change market psychology.

Homes that sit longer tend to attract more flexible sellers. Renovation-heavy properties, estate sales, and homes that missed the 2021–2022 pricing window are increasingly available at discounts relative to peak expectations in Sun Belt markets.

For investors, this matters. Longer days on market often mean: 1. Greater willingness to negotiate, 2. Preference for certainty and speed over top-of-market pricing, and 3. Increased openness to cash or investor-friendly terms.

We’re not seeing distress in a broad sense. We are seeing seller fatigue, and fatigue creates opportunity.

This dynamic is particularly beneficial for local operators who know their submarkets well. Inventory expansion doesn’t automatically translate to deals; it rewards investors who understand pricing, renovation risk, and exit timing.

2. Build-to-Rent Remains a Core Strategy—But the Cycle Is Shifting

On the build-to-rent (BTR) side, activity remains steady, especially when investors partner directly with homebuilders. At LendingOne, we continue to finance both:

• Entire communities sold in bulk
• Partial take-downs within for-sale developments

That model is now firmly established.

What is changing is the delivery pipeline. Many purpose-built BTR projects that began during the 2021 capital surge have now been delivered. New standalone BTR starts have slowed meaningfully, which should help rent growth normalize market conditions for projects delivering in 2026 and 2027.

We’re increasingly seeing BTR supply come from homebuilder pipelines rather than ground-up, investor-led developments. That’s an important distinction. Builders use BTR as a liquidity outlet, especially during periods of slower retail absorption. In turn, investors gain access to new products without taking full development risk.

Looking ahead, as construction costs stabilize, we expect interest in new BTR development to gradually swing up.

3. Where Investors Are Finding Deals Today

Despite the growth of marketplaces and national platforms, the most consistent deal sourcing remains local.

For small and mid-sized investors in particular, local relationships still win. Brokers, wholesalers, builders, and direct-to-seller channels continue to outperform broad listing platforms when inventory is rising, and homes are sitting longer.

What’s different today is that builders themselves are increasingly part of the sourcing equation. Some are actively engaging investor buyers to help manage standing inventory, especially in slower-moving submarkets.

The common thread across all strategies is market knowledge. Investors who understand their local buy boxes best are best positioned to capitalize on this phase of the cycle.

4. Regional Divergence Is Growing—And Fundamentals Matter More Than Ever

One of the clearest takeaways from the past year is that not all growth markets are created equal.

Markets driven primarily by retirees, second-home demand, or speculative inflows have proven far more volatile. Without strong employment growth, price appreciation alone is not a durable investment thesis. This is especially true when insurance, HOA fees, and carrying costs are rising.

Looking ahead, softer markets with higher inventory levels and strong long-term employment and population outlooks are likely to attract increased investor interest.

This is why certain corrected growth markets, such as Austin, are starting to look interesting again. While supply is abundant, long-term employment drivers remain intact. That doesn’t guarantee quick appreciation, but it does support long-term demand.

On the other end of the spectrum, supply-constrained regions in the Northeast and parts of California present a different opportunity set. Aging housing stock, limited new construction, and continued demand for modern layouts are driving interest in infill and spec redevelopment.

Local builders who can acquire small parcels and deliver updated product—four-bedroom homes, townhomes, or modest clusters—are increasingly well-positioned, particularly as national builders pull back in select markets.

5. Mortgage Spreads Are Tightening—And That Matters More Than Many Realize

One of the more constructive developments we’ve seen recently is the tightening of mortgage spreads, driven in part by Fannie Mae and Freddie Mac retaining more mortgage bonds. While the mechanics of the mortgage-backed securities (MBS) market can feel abstract, the implications matter for rates.

When interest rates rise quickly, spreads naturally widen. Investors in mortgage bonds expect faster prepayments when rates eventually fall, so they demand more yield upfront to compensate for that risk. That’s a part of the reason that the average 30-year fixed mortgage rate in 2022 rose faster than the 10-year treasury yield. By spring 2023, the spread between the 30-year fixed mortgage rate and 10-year treasury yield was 300 bps—far above the 177 bps average spread since 1972.

What’s different now is that incremental demand for MBS—particularly from the government-sponsored enterprises (GSEs)—and lower prepayment risk (as rates have dropped from their highs) has helped compress those spreads. This doesn’t mean rates collapse overnight, but it does improve affordability on the margin and lowers borrowing costs relative to where they would otherwise be.  Indeed, as of Friday, the spread is closer to 190 bps.

That’s important for two reasons. First, it supports transaction velocity on the consumer side of the market. Second, for investors, it creates a more stable financing backdrop after several years of rapid rate shocks, Fed balance-sheet runoff, and reduced bank participation in mortgage lending.

The net effect is not a return to cheap money, but a move toward more functional, predictable borrowing costs.

Closing Thoughts

We’re no longer in a market where rising prices cover underwriting mistakes. That’s a good thing.

Today’s environment rewards:

• Local expertise
• Patience on entry and exit timing
• A clear understanding of demand drivers

Mortgage spreads are improving, inventory is building gradually, and capital is becoming more selective. For disciplined investors, this combination is beginning to create a healthier opportunity set than we’ve seen in several years.

At LendingOne, we remain focused on supporting investors who approach this market thoughtfully through single-family rentals, build-to-rent partnerships, or localized redevelopment strategies.

The recalibration is still underway. But for those positioned correctly, the next phase of the cycle is starting to take shape.

The 2026 single-family rental investing landscape is less about chasing a boom and more about executing in a more normalized market. Investors are weighing each new deal against rising insurance and tax bills, softer home price momentum, and stabilizing mortgage rates. Despite these headwinds, the majority still plan to grow their portfolios.

In this article, you’ll see the full results of the LendingOne-ResiClub SFR Investor Survey for Q4 2025. Investors who own at least one single-family investment property were eligible to respond to our survey, which was fielded between October 26 and December 2. In total, 205 single-family landlords completed the survey. ResiClub, our partner for the survey, is a news and research outlet dedicated to covering the U.S. housing market.

LendingOne’s findings show investors are embracing disciplined, selective growth. Most respondents say they still plan to buy in the next 12 months, even as a growing share also expect to sell off at least one of their properties. Rental demand is the anchor: investors broadly expect renter demand to hold up and plan modest rent increases in 2026, with more aggressive rent growth expectations concentrated in the Northeast and West. At the same time, rising costs are prompting investors to take a closer look at cash flow and be more cautious with their numbers.

“The results of this survey confirm that investors are prioritizing long-term portfolio performance over short-term gains,” said Matthew Neisser, CEO of LendingOne. “The days of simply chasing volume are over. Investors in today’s market are focused on carefully vetted acquisitions and rigorous cost management to ensure sustained success in a mature market.”

Topline Findings

Buying plans stay strong—even as more investors plan to sell

• 38% of single-family rental investors expect to increase their investment activity in 2026 compared to 2025, 52% expect to maintain it, and 9% expect to decrease it.
• 68% of single-family rental investors say they’re very likely (51%) or somewhat likely (17%) to buy another investment property in the next 12 months.
• 43% say they’re likely to sell at least one existing property in the next 12 months.
• 81% of investors in the Midwest say they’re likely to buy another property in the next 12 months. In the West, only 48% of investors say they’re likely to buy another investment property in the next year. 

Insurance, taxes, and maintenance are squeezing cash flow

• 88% of investors say rising home insurance premiums impacted their cash flow in 2025.
• Asked which cost rose the most in the past 12 months, 36% of investors say insurance premiums, 30% say property taxes, and 26% say maintenance and repairs.
• In the West, 52% say insurance was their biggest cost increase, and in the Southeast and Southwest, 44% and 47% say the same. In the Midwest and Northeast, the largest shares of investors cite property taxes and maintenance as their biggest cost increases.
• Compared with Q4 2024 (13%) and Q2 2025 (12%), a much smaller share of single-family rental investors in Q4 2025 (3%) say mortgage interest is their fastest-rising cost.

Rental demand remains solid—and most investors plan to raise rents

• 75% of investors describe rental demand in their primary investment market in 2025 as very or somewhat strong.
• 78% expect rental demand in their primary market to be very or somewhat strong in 2026.
• 74% of investors plan to raise rents in 2026, including 45% who expect increases of +1% to +3%.
• Rent growth plans are most aggressive in the Northeast and West, where more than a quarter of investors expect increases of +4% or more, while 58% of Midwest investors plan more modest rent hikes of +1% to +3%.

Investors expect “slow and steady” growth for home prices and rates

• 63% of investors expect national home prices to rise over the next 12 months, 25% expect prices to fall, and 13% expect them to be flat.
• In the Northeast, 88% of investors expect local home prices to rise in 2026.
• 74% of investors say they expect the average 30-year fixed mortgage rate to be between 5.5% and 6.5% by the end of 2026.
• 10.8% of single-family rental investors expect rates above 6.5% in the next 12 months, down sharply from 57.3% in Q2 2025.

Big picture: The Q4 2025 LendingOne–ResiClub SFR Investor Survey points to a market where most single-family rental investors remain active buyers, even as they face higher operating costs and a more normal rate backdrop. Investors are planning for steady rental demand, modest rent and home price growth, and mid-5s to mid-6s mortgage rates. Investors in 2026 are leaning into carefully vetted acquisitions, keeping a close eye on cost management, and focusing on long-term portfolio performance.

How single-family rental investors say they expect their overall level of investment activity to change in 2026 compared to 2025

How likely single-family rental investors say they are to buy another investment property in the next 12 months

How likely single-family rental investors say they are to sell any of their existing investment properties in the next 12 months

How much single-family rental investors say rising home insurance premiums impacted cash flow in the last 12 months

The costs single-family rental investors say have increased the most over the past 12 months

How single-family rental investors describe rental demand in their primary investment market in 2025

How single-family rental investors say they expect rental demand in their primary investment market to look in 2026

How single-family rental investors say they expect national home prices to shift in the next 12 months

What single-family rental investors say they expect the average 30-year fixed mortgage rate to be by the end of 2026