Sellers Do What No One Expects | Dec. 2025 Housing Market Update

This could be the most encouraging sign for the housing market in years. It’s the final month of 2025, and the housing market has flipped from this time last year. Real prices are down, mortgage rates are near a percent lower, inventory is stabilizing, and affordability…it’s actually improving. But hints at a wave of underwater mortgages are making people nervous. With the number rising, is this the “distress” signal many have been waiting for? Welcome to our last housing market update of 2025. We’re getting into it all: home price, mortgage rate, and inventory updates, plus a new seller trend that is causing serious confusion, and could be the final nail in the “housing market crash” coffin. With sellers doing what nobody expects, next year could get interesting. More homeowners are falling “underwater” on their mortgages. Is this a 2008 repeat or just a blip on the real estate radar? Some economists are worried about rising delinquencies, but a high-level view of the data could point to an entirely different conclusion. In This Episode We Cover Sellers do what nobody expects, and it’s killing the “crash” narrative Underwater mortgages are surging, but are homeowners really in danger? The best news we’ve had in three years? A massive win for housing affordability Mortgage rate momentum and whether now is the right time to refinance The key affordability improvements we’ve seen since the start of 2025 And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1216 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dave Meyer?

  We have made it to the end of 2025, but the housing market continues to change and shift and confuse as it has all year. But today, we are going to make sense of it. This is our December 2025 Housing Market Update.

• 0:20Dave Meyer?

  Hey, everyone. It's Dave Meyer. I'm a housing market analyst and I've been a real estate investor for 15 years and I am the head of real estate investing here at BiggerPockets. And it's hard to believe, last housing market update of the year. It has been a truly wild year in the economy and the housing market. We started with one that was rapidly cooling, rates were in the sevens, things were feeling stalled out, inventory was going up. And fast forward to today, although it might not feel like much has changed, a lot actually has changed. I see it in the data, wherever I look. We are very much in a different situation heading into 2026 as we were in 2025. And honestly, I think there's some good news here.

• 1:04Dave Meyer?

  There are good opportunities starting to emerge. But of course, there are risks that need mitigating too. We're going to get into all of that, both the risks and opportunities in today's episode. First, we're going to talk about home prices. Then we'll talk about some good news, finally, on housing affordability. We'll get into a new trend that's emerging with sellers and how they are trying to wrestle back control of the housing market. And we'll end talking about underwater mortgages. And this article that I keep seeing everywhere in the news these days, I will address head on if underwater mortgages is a potential risk to the market going into next year. That's the plan for today. Let's get into it.

• 1:49Dave Meyer?

  First up, major headlines here. What's going on with prices? Everyone wants to know. Well, according to Redfin, prices are up 1.4% year over year. That's still relatively good. We are not in any sort of crash. I would still call that a correction because prices are down in real terms. 1.4% is a little bit flattish. But not bad, given where we started this year. Remember when rates were at 7.25? Inventory was up 30% year over year. Everyone was saying that there was going to be a crash. I did not, just for the record. I said we would be kind of flattish, and I think that's where we are. Just as a reminder, though, just one year ago, appreciation rates were still at 5%,

• 2:32Dave Meyer?

  which doesn't sound like much, but that's well above the long-term average of 3.5%. It's well above where we are today. So it is important to note that we've had significant cooling in appreciation rates over the last years, but we're not talking about declines, at least on a national level, yet. That said, there are major regional differences going on. According to Zillow, 105 of the top 300 regional markets are in a decline right now. So basically, a third of the biggest metro markets in the country are seeing housing prices go down. And that number, the total of markets that are seeing a decline, has gone up a lot. If you look back to January, it was only 31 markets, and by June, it had more than tripled up to 110.

• 3:17Dave Meyer?

  But now it's actually back down to 105. So this is treading water and staying flat, and that's really important. Obviously, the markets that are in a correction, you're going to have to take different tactics in those markets than the ones that are still doing right now. But I think the fact that the number of markets that are correcting is relatively even shows some stability to the housing market despite everything that's going on. Now, the depths of those corrections are wildly different. If you look at Punta Gorda and Cape Coral, these are kind of the poster child for the Florida crash that's going on right now. Punta Gorda, down 13% year over year. That's a lot. That's a crash in that market. Cape Coral, down 10%.

• 3:58Dave Meyer?

  I think if you're losing 10% in a single year, you could call that a crash. I wouldn't argue with you there. We even see, all four actually, of the top markets seeing declines, I guess you'd call those bottom markets, are all in Florida. Punta Gorda, Cape Coral, Northport/Sarasota, and then Naples. Those are the top four. After that, we see Kailua in Hawaii, Austin. In Texas, then it's back to Florida. Then we got Tampa, Sebastian Vero Beach, Daytona, Port St. Lucie. So 12 of the biggest corrections in the country, 12 of the top 14 are all in Florida. So you can see that it's highly concentrated there. The other trends are in the Gulf region. So Texas and Louisiana are also seeing some of the bigger corrections.

• 4:43Dave Meyer?

  And then they're sprinkled throughout the countries as well. Like there's definitely markets in California. You see some markets where I live in Washington and Denver. There's definitely corrections too. But like, if you're just looking for the trends, the Gulf region is where it's mostly concentrated. On the other end of the spectrum, no surprise here. Midwest is still seeing some of the strongest appreciation rates, but those rates are coming down. So Chicago, you see Milwaukee, you see Cleveland, you see these markets are still up, but they're now up like 2% or 3% instead of last year, 6% or 7%. So everything, appreciation rates are slowing down all across the country. So let's move on to mortgage rates as this is going to be a very important barometer for next year. It also tells us a lot about what's been going on this year. This has been a positive story.

• 5:27Dave Meyer?

  I know people are not happy with 6.25% mortgages, but they should be because a year ago, they were about 6.75. If we look at January, they peaked out at 7.25. Now they're at 6.25. A 1% drop in mortgage rates over the course of a year is good news. That is a positive thing for the housing market. This is one of the reasons why the market has shifted this year. Like I said, we started 2025. People were very worried about a crash because mortgage rates were 7.25. Horrible affordability, inventory is going up. Well, maybe it's not the banner mortgages that we saw during COVID, but the fact that rates have gone down 1% full matters.

• 6:10Dave Meyer?

  That brings millions of people into the housing market. That improves affordability for investors and for homeowners. And so that's a really good thing. Where we go into next year, I've made my predictions about this. They will hopefully stay in the low sixes, maybe even get into the high fives. And there's some encouraging signs about that, right? If the Fed keeps cutting rates, that could put more downward pressure. If yields keep falling. The other good news, if you're into this kind of thing, is that the spread between treasury yields and mortgage rates is coming down, which is one of the things that has propelled mortgage rates up. So I think there's good momentum here that mortgage rates could keep coming down a little bit, but are probably not going to be coming down in any dramatic way unless something dramatic happens in the economy.

• 6:55Dave Meyer?

  One thing I did want to call out for real estate investors, just a piece of advice, is that refinancing is starting to get a little bit more attractive. I think when you go from seven and a quarter to six and three quarters, like people aren't really that interested. But when you lose a full percentage point, depending on the price of your house, that could be hundreds of dollars per month in cash flow that you could be generating or saving if it's your primary residence by seeing rates come down this much. And I know people might say, oh, Dave, you said rates could come down a little bit more. You could wait, but I just want to call out that just in this last year, there's some data that came out from the mortgage monitor that comes out from ICE each month.

• 7:35Dave Meyer?

  They said that 3.1 million more mortgage holders are sort of in the money for refinancing over the last couple of years because they could reduce their rates by 75 basis points. I thought that was pretty interesting. I didn't know that math before, but if you can cut your rate by three quarters of a percent, so 0.75%, that usually makes it worthwhile for most people. And so if you are holding on to mortgages right now that are in the sevens, if they got a seven in front of it, if they got an eight in front of it, because investors might have one with an eight in front of it, you may want to consider refinancing right now. You could wait a little bit, but things bounce up and down. Like it's hard to know.

• 8:15Dave Meyer?

  I actually got a message on Instagram yesterday from a guy who said that I saved him $800 a month. I guess he has an expensive mortgage. I think he lives in LA. I saved him $800 a month because I told him to refinance before the rate cut. Because I said that mortgage rates were going to go back up and they did. And apparently that saved him a whole bunch of money. So I just want to point out that waiting doesn't always work. And considering refinancing might be worth it. I think it's at least worth talking to a banker. If you have a mortgage with a seven or eight in front of it, something to consider. So I think high level housing market stuff, this is relatively positive. We need affordability to improve. And so seeing relatively flat prices, in my opinion, is pretty good.

• 8:58Dave Meyer?

  I don't want to see prices crash, but I don't want to see them explode again. I want to see them stay stagnant. That's really good. And mortgage rates have come down. They're starting to come down a little bit more. I think that's a great way to end the year in 2025 and bodes well for the beginning of 2026. We need to talk more about affordability though, because this is what everything in the housing market hinges on. And we're going to talk more about new data on affordability right after this quick break. We'll be right back. As a real estate investor, the last thing I want to do or have time for is play accountant, banker and debt collector. But that's what I was doing every weekend, flipping between a bunch of apps, bank statements and receipts, trying to sort it all out by property and figure out who's late on rent.

• 9:43Dave Meyer?

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• 10:27Dave Meyer?

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• 11:09Dave Meyer?

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• 11:52Dave Meyer?

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• 12:49Henry Washington?

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• 13:34Henry Washington?

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• 14:36Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm Dave Meyer here giving our December Housing Market Update for 2025. Before the break, we talked about flat home prices, declining mortgage rates. What those two things mean, though, when you take those two things in aggregate, they give us what I think is the most encouraging sign that we have seen in the housing market for a year, maybe more, maybe three years. Form affordability has hit its best level in two and a half years. That's as of September, last time we have data for this, but this is fantastic news for the housing market. And it is driven by the two things that we talked about before the break. Rates are easing and prices are pulling back.

• 15:20Dave Meyer?

  Now, I know I said that prices are up 1.4%, but when it comes to affordability, what you need to measure is how do prices compare to inflation? And if they're up 1.4% year over year, but inflation's at 3%, they've actually gone down in inflation adjusted terms. And that means that it is more affordable for people, right? Their wages are going up relative to the price of a home. That makes housing more affordable. If you combine that with falling mortgage rates, we are getting improved affordability. This is great news. This is something I think is worthy of celebrating. Now, it is not the best affordability we have ever seen. It is far from it.

• 16:05Dave Meyer?

  We just, in the last year, we're near 40-year lows. So we're probably at 38-year lows for affordability. This is not like we should be celebrating because all of a sudden housing is affordable. We should be celebrating because you got to start somewhere. The trend was moving in the opposite direction for so long. Housing was getting less and less and less affordable. That's not good. It's got to bottom out, right? And start moving in the right direction. And fortunately, I think that's the direction we're heading. So that is good, right? We are seeing that across the board. If prices stay flat or ish decline a little bit, like I think they will next year. Mortgage rates come down a little bit. That's the affordability movement that we need.

• 16:46Dave Meyer?

  This is the whole premise of the great stall that I've been talking about for months or years now. This is the most likely path for the housing market. And it does seem that it is true, at least as of now. So I think that's a good thing. Just to build on this a little bit more, actually, out of the 100 largest markets in the United States right now, 12 of them, primarily in the Midwest, have now returned to long-run average for affordability.

• 17:12Dave Meyer?

  I know that doesn't sound like a lot, 12%. It really isn't a lot. But given where we've been over the last couple of years, where every market has been unaffordable, the fact that there are any markets in the U.S. that are getting close to historic levels of affordability, again, is good news to me. I know we have a long way to go, but baby steps, and we're taking some baby steps getting there. Now that we've talked about affordability, let's call it our main story for today on this housing market update is about the behavior of sellers in the housing market. This is really important to inventory. Because the story of this year in 2025, and really honestly for 2022, 23, and 24, has all been about what is happening with housing inventory. It is so important.

• 17:56Dave Meyer?

  It is the most important metric for really trying to understand where the market is today and where it might be going in the next couple of months. Because when inventory is high, prices face downward pressure. They might be flat, they might go down a little bit, but you have that downward pressure weighing on housing prices because there are more sellers than buyers. When the opposite is true, when inventory is low, prices have upward pressure, right? There are more buyers than sellers. They tend to bid up the prices, and so prices tend to go up. And that's how inventory influences the market. Now, during the pandemic was an extreme example, an example of super low inventory. But when we started 2025, we were starting to see that story unravel,

• 18:38Dave Meyer?

  where we were seeing really high inventory growth rates. Now, inventory wasn't high in some historical context, but the growth rate was up, like we saw in January, February, March, 25% year over year, meaning that in January of 2025, there was 20, 25, 30% in some markets more homes for sale than there was in January 2024. That matters. That's a big number. I'd like to call out that we, on the BiggerPockets Podcast, were not panicking and saying that the market was going to crash like everyone else was saying, but it puts downward pressure on pricing, and it's something that is really important to watch. Because if you listen to the crash bros, the people who are calling for a whole crash in the housing market, they're saying,

• 19:22Dave Meyer?

  Oh my God, look, inventory is up 25% year over year. Next month, it's going to be 40. Next month, it's going to get 50 or 60. And yes, that of course is feasible. But did that happen? No. If you fast forward to today, we are not seeing accelerating inventory. We are not seeing inventory spiral out of control month over month over month. Actually, we are seeing the opposite. If you fast forward today and look at the numbers for October of 2025, the most recent data we have for inventory, it's not up more than 25% year over year. It's not gone up beyond where it was in January, February, March. The opposite has happened.

• 20:03Dave Meyer?

  In fact, right now, in October, inventory was up just 4% year over year. So the growth rate in inventory has not exploded. It's actually contracted. And not only has the growth rate slowed down, but we are still below pre-pandemic levels of inventory. If you look at what Redfin shows us, we are about 200,000 homes short in inventory of where we were in October of 2019. So this is under control. This is a crucial thing for everyone to understand about the housing market because it's one of the reasons why I think we're going to see roughly flat pricing next year, maybe a little down nationally.

• 20:46Dave Meyer?

  And it's one of the reasons why I'm not super concerned about huge drops in the market right now. But let's just take a minute and talk about where inventory might go. Because there's different ways that inventory changes, right? One way inventory drops is that demand picks up, right? If there's the same amount of homes for sale, but more people want to buy them, we'll have less inventory because those homes that are for sale are going to move quicker. The other way that inventory can drop is that new listings go down. That's basically the number of people who choose to sell their property. That can actually go down and that's actually gone down quite a bit, right? New listings, people are saying, oh my God, people are panic selling. Sellers are flooding the market. No, they are not. That is just objectively not true.

• 21:30Dave Meyer?

  New listings are flat year over year. Don't listen to any of that nonsense that you might see. People are calling for panic selling like, oh my God, everyone's freaking out. No, that's just not true. New listings are actually up 0.4% year over year. It is completely flat and that shift is not just one month. That has been happening for the last couple of months. The big thing that has changed though, it's not demand, it's not new listings. The change that is happening right now is what's called de-listings. And this is a new metric. We don't talk about this a lot on the show, but it is important right now because de-listings, which is defined as just a property that was listing for sale that was pulled off the market

• 22:12Dave Meyer?

  for more than 31 days without selling or going under contract. And the reason I'm bringing this up is because this is one of the new dynamics that's kind of emerging and shaping behavior in the seller, in the housing market. Basically, what's going on en masse is that sellers are looking at the current market. They're seeing that sales conditions are not as good as they have been over the last couple of years, and they're just saying, nah, you know, I'm kind of out on this one. I'm going to wait this one out and see maybe if there's better conditions for listing, or I'm just going to stay in my property. I'm not going to sell it. I'm going to rent it out for another year, another two years. I'm going to keep living here, whatever. That trend is really high right now.

• 22:52Dave Meyer?

  Actually, home de-listings is at the highest level it's been since 2017. And this increase in de-listings helps explain why prices are rising despite sort of tepid home buying demand, because inventory is falling because of this. Remember, new listings are flat. If de-listings go up compared to new listings and demand stays the same, that means that we are getting more balanced supply and demand dynamics. Another reason why this is a sign of a correction, not a crash. If we look at the behavior of sellers and what they're doing right now, it is completely logical. If they are not getting the prices they want, if they don't want to drop price and they

• 23:35Dave Meyer?

  don't have to sell, they're just choosing not to sell. And if you dig deep into this data, you'll see that the areas where de-listings are going up the most are the areas where their strongest buyers market, where basically the areas where it's the worst time to sell. That's where people are de-listing the most. Now, that makes sense, right? If you don't like selling conditions, then you de-list your property. And that's why I say this is a normal correction, because what The crash bros say is, oh my God, when inventory goes up and it becomes a buyer's market, people panic and add more and more inventory to the market. The exact opposite is happening. People say, oh, this is not a good time to sell. I'm not going to panic and list my property for sale.

• 24:17Dave Meyer?

  I'm actually going to just take my property down off the MLS and not sell it. This is what happens during a normal correction. It's sellers reacting to selling conditions and saying, I don't want any part of this. I am going to delist my property. So just as an example, the markets with the highest percentage of delistings are those markets that are correcting. It's Austin, Miami, Fort Lauderdale, Dallas, Denver. Again, what you would expect because it's logical. Now, of course, there is a big question mark here. Is this just temporary, right? Are people just taking their properties off the market for a couple of months? And then they're going to list them in the spring and we're going to all of a sudden get a flood of inventory.

• 24:59Dave Meyer?

  So far, we have some data on this and the answer is no. So far, only 20% of properties that have been delisted have come back on the market, which in my opinion is pretty low. I was kind of surprised by that. But I do think that's probably due to seasonality, right? Like, no one is going to delist their property in September, October, and then be like, you know what? I'm going to relist it on Thanksgiving weekend or right before Christmas. Like, if you were going to delist it, you're probably going to wait till at least January or maybe you wait to sort of the hot months of March or April where there's typically the most seasonal home buyer activity. You might choose to do that. My guess is yes. I think we will see an uptick in re-listings in the spring.

• 25:40Dave Meyer?

  I think we'll see that number go from 20% to something higher, maybe 30%, 40%, 50%. Because I personally know investors who are doing this. A lot of flippers, right, are saying, you know what? It's cooling off right now. I'm going to wait and take my chances in the spring. I think we'll see more and more of that, but flippers make up a relatively low percentage of all the homes that hit the market. If you want to understand the broad trends, you have to figure out what's going on with homeowners, right? Traditional homeowners, and we just don't know right now. I personally, just my guess based on vibes of the market, I think re-listings will go up, but it won't go up to 100%. I think some people are choosing to say, you know, maybe I should stay in my existing home, or I'll rent this property back out. It really depends on what happens for homeowners. If they start seeing, hey, I can

• 26:25Dave Meyer?

  move at a better rate and affordability is getting better, they might move. If not, they're probably going to stay in their homes. But this is something that we definitely need to watch because, as I said, the housing market is going to be built on affordability and inventory. These are the things that we watch most closely. Talked about affordability getting a little bit better right now. That's great news. Inventory leveling out, depending on who you are, you might like this or not like this, but it is going to provide some stability to the housing market. I think it provides that floor for where prices could fall. It can't fall that much if delistings are happening. They can't fall that much if inventory is leveling out. And so that, to me, again, points to a correction, not a crash. But there is one other thing we

• 27:08Dave Meyer?

  got to look at. If you want to understand how far the market might fall or where it's going to go, you need to look at distress, right? Because distress, foreclosures, delinquencies, matter a lot when prices start to go down. And we're going to dig into the newest data that we have on that market stress, including into that article everyone keeps sending me that there are now 900,000 mortgages underwater. We're going to talk about all of that when we come back from this quick break. Stick with us. Henry, it's holiday season. What do you get a real estate investor for the holidays?

• 27:42Henry Washington?

  Well, if that real estate investor is me, you can get me a 15-unit apartment building.

• 27:45Dave Meyer?

  Oh, does that work? Do people just send you apartment buildings?

• 27:48Henry Washington?

  They are now.

• 27:50Dave Meyer?

  Well, I got a suggestion, actually. If you are looking for a gift to get a real estate investor, buy them a ticket to the upcoming Texas Cash Flow Roadshow. We're going to be in Texas. We're going to Austin, Houston, and Dallas from January 13th to 16th. We're going to be having meetups, workshops, live podcast recording. We'd love to see you all there. So if you're thinking you've got a friend in the Texas area and they're trying to get into real estate investing, they're trying to scale their portfolio, go to biggerpockets.com/texas and go buy them a ticket. For my wife's birthday, I wanted to make her a new website for her landscape design business. So I researched a lot of different options. I tried out a couple, but honestly, it was really overwhelming. It was pretty time consuming and still, the

• 28:33Dave Meyer?

  site wasn't coming out the way I wanted it to. Then I tried Hostinger and everything was super simple. I asked Hostinger's AI to build a clean site for her business and it had a working version up in minutes. No coding or designer needed. Plus, its AI agent helps with SEO, website copy, and email marketing after launch. You get domain, website, email, all in one account. And right now, you can get Black Friday and Cyber Monday pricing through December 14th. So snag Hostinger's services at their lowest prices before the sale ends. Create your website today for just $1.99. Go to hostinger.com/realestate

• 29:14Dave Meyer?

  and use code REALESTATE for an additional 10% off Black Friday and Cyber Monday pricing. I just booked a ski trip to Park City and I've already got the whole thing planned out. Five days, first tracks every morning before the crowds show up, my knees reminding me I'm not 25 anymore by the second run, and an embarrassing number of overpriced burritos at the lodge. I don't even care. This is the trip I look forward to all year. But here's the part I actually appreciate. The practical side of my brain kicking in is that my place doesn't have to just sit there empty the whole time I'm away. I can list my space on Airbnb and bring in a little extra income while I'm out getting humbled on a mountain. And with the Co-host Network, I'm not the one

• 29:59Dave Meyer?

  Handling all of it. You can partner with a vetted local co-host who can create your listing, manage reservations, message guests, and even handle the styling. So I get to fully focus on my trip and my place is still working for me the whole time. Find a co-host at airbnb.com/host. Investing in real estate has always been smart, but it hasn't always been simple. Now it's both, thanks to the Fundrise Flagship Fund. The Fundrise Flagship Fund launched more than five years ago with a mission of delivering low-fee access to blue-chip private market real estate. Today, the Fundrise Flagship Fund has grown to manage more than $1 billion of real estate on behalf of hundreds of thousands of investors,

• 30:43Dave Meyer?

  making it one of the largest funds of its kind. For those who believe real estate has an important role to play in their portfolio strategy, the Fundrise Flagship Fund has positioned itself as both a simple and a smart option. Whether you're starting with $10 or $10,000, the Fundrise Flagship Fund makes adding real estate's unique potential for both passive income and consistent growth. Just visit fundrise.com/pockets to make your first investment today. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the fund's prospectus at fundrise.com/flagship. This is a paid advertisement.

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• 32:29Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm Dave Meyer, giving our December 2025 housing market update. So far, we've talked about affordability improving. I love it. It's great news. It's wonderful for the housing market. We've talked about inventory starting to stabilize, another good sign that the market is not in freefall. But the last thing we need to cover, which we've been covering a lot over the last couple of months, is market stress. Because we talked about inventory dynamics and why it's not supporting the idea of a crash on a national level. But of course, things can change, and we want to know if the solid sort of foundation of the market could come undone. And to this, we need to look at market stress. And I cover this stuff a lot, more than I

• 33:14Dave Meyer?

  used to, because there's just so much noise about market crashes that I feel it's important for me to reiterate that if the market crashes, markets can crash, but there are warning systems in place, essentially, in the data, right? We would see some of these things coming. Unless there's a black swan event, right? There could always be a COVID, a 9/11, something like that, that no one sees coming and causes the market to crash. I just want to say, those things are always possible. But all the people out there on social media screaming about a housing market crash, they're all pointing to inventory and demand drying up. I just need to say, those kinds of things, we have data for, and I'm going to go through

• 33:56Dave Meyer?

  it with you right now. First, let's talk about mortgages being underwater, because there was some article that came out that said, I think it was in MarketWatch or something, 900,000 homes are now underwater on their mortgage. And that sounds scary. 900,000, that's a lot. It's 1.5% of all mortgage holders, which may not sound like a lot, but you know, that's a reasonable percentage of the housing market when you're specifically talking about distress, right? You know, like, those things can snowball. So is this a big deal? No, not really. Like, I don't think so. To me, this honestly doesn't matter that much. I know a lot of people are going to disagree and get mad about this, but hear me out, right?

• 34:37Dave Meyer?

  Mortgages being underwater is not a disaster. It is not an emergency. It is something that happens quite frequently. Anytime prices correct or drop in the housing market as a whole, some mortgages are going to be underwater. If you haven't heard this term, underwater just means that you owe more on your loan than the house is worth. So if you went out to sell that property, you would have to come out of pocket to pay back the bank, or you'd have to go through a short sale. And that sounds terrible because it's bad. It is bad. I'm not saying that being underwater is a good thing. It is certainly not. It is really bad. But it is not an emergency because just

• 35:20Dave Meyer?

  because your house is underwater does not mean that you need to sell it. It doesn't mean that you're going to be foreclosed on. That is not how this works. This is a common misconception I hear people have all the time. They say, oh, the bank's going to foreclose because my house is underwater. No, no, that is not how it works. Banks only foreclose if you stop paying your mortgage. So houses being underwater happens, and the most common reaction to that is waiting. You just do nothing. You just keep paying your mortgage each and every month, and then eventually the market will pick up again, and your house won't be underwater. That is how normal corrections happen. And so I've said for

• 36:05Dave Meyer?

  months that we are in a correction. So am I surprised that some mortgages are underwater in a correction? No, not at all. That's what happens. What is an emergency, or what can become an emergency, I should say, is forced selling. What happened in 2008, and what would cause a crash again, is if there are all these mortgages that are underwater, and the people who own those mortgages can't pay on them. That is a problem. Just in general, when people stop paying their mortgages, that is a problem. That's when we really start to get worried about a crash. So I'm personally not so worried about mortgages being underwater unless, at the same time, there is forced selling, because those two

• 36:50Dave Meyer?

  things together can be bad. But mortgages being underwater on their own is not so bad. It is not that big of an emergency. So let's look at delinquencies. Right now, the data we have for August of 2025 is that delinquency rates did go up. Up 16 basis points, so that's 0.16% in August compared to where it was the same time last year. That is the first time it's gone up in a couple of months. Actually, it dropped year over year in June and July. And so I would count that as normal variance right now. We are still below 2019 levels. And again, the reason I say this pre pandemic level stuff is because stuff got so crazy during 2020 and 2021

• 37:34Dave Meyer?

  that you can't really rely on the data for that. You know, there was a moratorium on foreclosures in 2020 and 2021. And for some kinds of mortgages, that extended almost into this year. And so the data for the last five years is really hard to rely on. So what I do in this situation is I say, hey, what was it in 2019? That was the last normal housing market we had. And although we are still below those delinquency rates, they're kind of coming back to that level. So it's not way better than it used to be, but it's about where it used to be. So I think that's really important because in 2019, no one was screaming about a housing market crash or a delinquency crisis or foreclosure crisis. It was just a normal market, right?

• 38:16Dave Meyer?

  And so I think that's probably where we are these days. Now, if you dig into it and look at FHA loans, there are some increases in delinquencies in FHA and VA loans compared to last year. That is important to know, but those two types of loans had foreclosure moratorium programs in place until this spring. And so seeing them go up from last fall to now is not surprising because those programs expired. And so we're going to have some increases in delinquencies. But this is something we need to keep an eye on. I personally look every month when FHA and VA loans delinquency rates come out because I do think this could be a warning sign. Like I said, for crashes, there are some warning signs in the data.

• 39:01Dave Meyer?

  This is a warning sign. Right now, I don't think we're at warning emergency levels, but since it has been going up, I think it's something that we will keep a close eye on, but you should know it is not at emergency levels right now. Now, delinquencies are one thing, and if they get serious, if we have a lot of serious delinquencies, that leads to foreclosures. Now, foreclosures are up year over year. They're up 6% year over year. Again, we are coming from artificially low levels of foreclosures due to the pandemic. So I am not surprised to see that they are up year over year. And I am encouraged to see that foreclosure starts, which is kind of the beginning of the foreclosure process, is actually down 10% year over year.

• 39:46Dave Meyer?

  So again, this is not like it is spiraling out of control. It's sort of just to be expected that we are reverting back to normal in terms of delinquency rates and in terms of foreclosures. So is there stress in the market? Yeah, there is a little bit more stress than where it was a year ago, but we are not at emergency levels. And if we start getting towards those emergency levels, trust me, I will be the first one to let you know. I look at this stuff every single month. I have no benefit for telling you that the market is doing well when it is not. I am just telling you, we are still below pre-pandemic levels. Things are starting to inch back up. Where we go from here is a question mark. It is something that we're going to keep an eye on, but as of right now, there are

• 40:29Dave Meyer?

  not significant signs of stress in the housing market. Broadly speaking, American homeowners and investors are paying their mortgages, and that is the best sign that we have for stability in the housing market. You add that on top of inventory moderating, you add that to affordability improving, it still looks to me like we are in a correction and not a crash. And to me, that is the best thing that can happen for the housing market because we need affordability to improve, but obviously, we don't want the bottom to fall out. And it looks like that's exactly what's happening right now. That's what we got for you today for our last housing market update for 2025. Thank you so much for listening. We will certainly be back with another episode soon.

• 41:13Dave Meyer?

  And we, of course, will be continuing our housing market updates in January of 2026 when we get into the new year. Thanks again. I'm Dave Meyer. We'll see you next time.