The Correction Will Get Even More Severe | Sept. 2026 Housing Market Update

More homes are for sale now than any time in the past six years. Mortgage rates just shot up to above 7% with no relief in sight. Markets are seeing (substantial) price cuts, and there could be much more to come this winter. So, is a crash on the way, or is this lukewarm correction simply becoming something stronger than we had imagined? In this September 2026 housing market update, we’ll cover it all! First, we’ll talk about the massive change in mortgage rates this month, what’s caused it, and whether any relief is on the horizon. If rates stay high and more buyers are booted from the market, sellers will need to act—that means price cuts, concessions, and negotiating power for the buyers that remain. But will this turn into a full-blown crash, or are there too many macroeconomic legs propping up the housing market? Dave gives his full risk report and shares where he thinks interest rates could end up hovering. Plus, the tactic he’s using to get 10%, 15%, or even 20% off real estate deals while sellers have their backs against the wall. In This Episode We Cover What caused mortgage rates to surge earlier this month to the 7%+ range Why prices could drop even more in winter and the serious discounts Dave is finding Some of the best and worst real estate markets in the U. S. (which are holding up?) Chances of this market flipping from a correction to a housing market crash What happens as buyers exit the market with the most homes for sale in six years? And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠h⁠⁠t⁠t⁠ps://www⁠.biggerpockets.com/blog/real-estate-1335. 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?

  There are more homes for sale in the U.S. right now than at any point since 2020, and mortgage rates are near 7% with no relief in sight. Are these signs of an impending crash? Or isn't an opportunity to stock up on properties at a discount? On this BiggerPockets September Housing Market Update, we're digging into the big changes we've seen to the housing market in recent weeks, and things have definitely changed. So I'm going to explain where the risks lie and how savvy investors can use these new market dynamics to build a bulletproof portfolio for the years to come.

• 0:45Dave Meyer?

  Hey, everyone. Welcome to BiggerPockets. I'm Dave Meyer, Chief Investment Officer, Housing Market Analyst, and Real Estate Investor for more than 16 years. Today, we have our monthly Housing Market Update. And I do this every month, go through the numbers, the recent data to keep you up to date. But this one, September, feels a little bit different, to be honest, because for most of 2026, the story has been kind of that nothing has happened. We're in the great stall. Things have varied a little bit, but we've had the same big picture story. Rates have sort of stayed in this band. Inventory is sort of grinding away. It's not really moving that much.

• 1:27Dave Meyer?

  Prices are creeping up slowly, and kind of it's been boring. But August broke that pattern in a couple of places that we need to talk about, and the market is actually starting to change a little bit faster. And I think we're getting a very clear signal for the first time in a while on where the market is going for at least the rest of the year, for 2026, and maybe even for the next couple of years. So we're going to hit on a few big stories. First, we definitely need to talk about mortgage rates. They've shot up, as you know, and this matters a lot, but we got to talk about why they're going up and where they're going to go. Secondly, we're talking inventory and a surge in supply and how that can be either a very

• 2:12Dave Meyer?

  good or very bad thing for investors, depending on your individual approach. And I'm going to share some regional housing data because, of course, there's only so much we can learn from national data. And we'll talk about different regional events and how inventory and pricing are trending around the country. Lastly, if we're talking about rising mortgage rates and increasing supply, we got to talk about risk, because those are two of the things that can bring prices down in the housing market. And so we're going to end the show with the risk report. It's something we do every month here on the Housing Market Updates. So that's the plan for the show. One quick thing before we start, if you get value out of these monthly updates, don't forget to hit subscribe.

• 2:55Dave Meyer?

  I am terrible at remembering to ask, but today I remembered, so do me a favor and subscribe. With that, let's get to our Housing Market Update. First up, we're talking about mortgage rates. Big picture here, rates have gone up a lot over the course of the year. They're now hovering above 7% as of this recording, recording right in the middle of September. They are about 7.2%, the highest they have been in over a year. Now, you'll remember about two years ago, we were getting mortgage rates briefly in the eights, but starting at the beginning of this year, we were closer to six. We were at about 6.1%. So we've seen a significant increase in mortgage rates over this year.

• 3:39Dave Meyer?

  And the reason they're going up so quickly is really important because it tells us whether they're going to go back down, or if this is something we just need to get used to. So what is driving up mortgage rates? The short answer is yields, Treasury yields. You might have seen that the yield on a 10-year U.S. Treasury is now above 5%. This is the highest it has been in quite a while. 30-year Treasuries, highest point they've been in 30 years. And the reason this matters is that mortgage rates are directly tied to the yield on a 10-year U.S. Treasury, not what the Fed does. If you're not familiar with what a Treasury is, it's just a bond. It is a bond issued by the U.S. government where investors lend their money to the U.S.

• 4:23Dave Meyer?

  government, and the yield is how much interest or the interest rate the government pays to those investors. So right now, if you wanted to lend the government money for 10 years, you would get a 5% annual return. That's what a five-year yield means. And this is notable because it's gone up a lot. And what has driven these yields up and therefore taken mortgage rates up with them is basically just inflation. Now, inflation is caused by a lot of things, but the primary thing that's happened this year is the war in Iran. There's no end in sight. It's causing energy shocks. It's causing increasing fertilizer prices, which is increasing food costs.

• 5:05Dave Meyer?

  Diesel is at the highest it's been on record, which increases the cost of everything that goes on a ship, which is everything, right? So that's driving up inflation. We also have tariffs, which are inflationary, contributing to inflation. That's not what's causing this acute spike in mortgage rates, but it plays a role. And the last thing just is the national deficit, right? We have this massive national deficit, and bond investors are worried that to pay off that deficit, the government's just going to print a lot of money, which will cause more inflation. And so I know this is sort of big macro stuff. It's not as directly related to real estate, but the reason I am telling you this is because if you want to know, are mortgage rates going to go down?

• 5:49Dave Meyer?

  You have to ask yourself this question, is inflation going down? I hope yes, but there is no end in sight to the war in Iran. Tariffs have been up and down, and I think they're just going to remain volatile for a while. The national deficit, there's no chance we're getting that under control anytime soon. And so if you ask me, I don't think mortgage rates are coming down anytime soon because I don't see inflation getting any better. Now, the Fed is probably going to raise rates over the next couple of months, a couple of times. That could help a little bit, but I do think until the energy shock that we're going through gets better, we're not going to see inflation come down in a meaningful way.

• 6:31Dave Meyer?

  So my outlook for mortgage rates going into the end of 2026 is that they're going to stay near 7%. Hopefully, they'll come back down to the high sixes. I actually think that's probably the most likely, but are they getting below 6.75%? Probably not, right? So this is, I know, frustrating. Everyone wants mortgage rates to come down, but it is not unexpected. I've been saying this for years. I've done tons of episodes on this podcast, on the On The Market Podcast, saying mortgage rates are unlikely to come down, because if you study this, it's kind of obvious that this was going to happen. I think it's just that a lot of people in our industry have been wanting mortgage rates

• 7:16Dave Meyer?

  to come down and saying that they're going to come down because they feel like it's an inevitability, because they went up so quickly that, of course, they have to come back down. That's not really how it works. The bond market rules the world, and the bond market is telling us that borrowing costs are going to be higher across the entire economy, and mortgages and real estate are not exempt from that. So for investors, you got to plan on higher rates. I've been saying it and screaming it, and I'm going to scream it some more. Rates aren't coming down. We're not going to see a number with a five in front of it for a long time. I don't see that coming anywhere in the future, certainly not in 2026, probably not even 2027.

• 8:00Dave Meyer?

  And who knows what happens after that, because this stuff is sticky. There is structural stuff going on outside of real estate that is impacting borrowing costs. And the net effect of all of this is lower affordability, which pulls demand out of the market. It also lowers supply, too, so that doesn't mean there's going to be a crash. We'll talk about that in a little bit, but it does mean deals are going to be harder to pencil in the short run. That is only in the short run, because if you think about over the long run, what's going to happen is that prices are going to come down. I feel pretty strongly about that. One year ago, I made a prediction that prices were going to come down in 2026.

• 8:44Dave Meyer?

  We're actually probably closer to flat right now, but I do think they'll be negative for the year when we get to December and see what actually happened. But I think they're going to have to come down even more in the coming years, because affordability is just too strained. Now, I know that sounds like a reason to panic, but I don't think it is. I actually think prices should come down. I know if you own a bunch of real estate, you don't want to see the value of your properties come down on paper, but for the market to restore some semblance of health and balance where deals are affordable and easy to get again, prices are going to need to come down a little bit. And that's a good thing. That actually means that cash flow is easier to find, because rents, even in these kinds

• 9:28Dave Meyer?

  of scenarios, don't really fall as much as home prices do. Historically speaking, of course, something can be different in the future, but that's usually how it works, and rent-to-price ratios typically get better. And I'm going to dig into all of that data, but we do have to take a quick break. We'll be right back.

• 9:44Henry Washington?

  Here's a strategy that most W2 employees have never heard of. Normally, if you want to write off a rental property against your regular income, you need real estate professional status. That means tracking hundreds of hours a year. Rent to Retirement just launched a program that skips all of that. It's called the STR loophole tenant placement program. Here's how it works. You buy one of Rent to Retirement's Class A new construction investment properties. You set up an Airbnb listing and self-manage it for the remainder of the year. Rent to Retirement then rents the home as a short-term rental to establish it as an STR for the year. No furnishing required, making this the easy button to save five or six figures in taxes this year.

• 10:27Henry Washington?

  And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and potentially write off over $100,000 against your income, even on your first rental. Add in cash back up to 13% of the home price, which exceeds $60,000 on some properties. With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties, and inventory is limited. Learn more at biggerpockets.com/retirement or text REI to 33777. Again, text REI to 33777.

• 11:08Dave Meyer?

  Most investors only think about insurance when something goes wrong. A tenant injury, storm damage, loss of rent. Then suddenly, the cheapest policy doesn't feel like the best one anymore. That's why a lot of BiggerPockets investors use steadily for landlord insurance, designed specifically for rental properties. Whether you own one property or a growing portfolio, they make it simple to get covered properly. And BiggerPockets Pro members get an extra 5% off their landlord insurance premiums. Visit biggerpockets.com/landlordinsurance to get a quote today.

• 11:42Henry Washington?

  Quick word about a new pro perk you'll want to know about. Aven. If you're a homeowner, there's a good chance you're sitting on equity that you're not using. The problem is tapping into that usually means a cash-out refi, a traditional second mortgage, or weeks of paperwork just to get approved. Aven built something different. It's a credit card, but it's backed by your home equity. So you get a lot of the rate benefits of a HELOC with the flexibility of a card you can use anywhere. Rates are typically well below a standard credit card. Approval is fast and mostly online, and you can use it for anything. A renovation, paying down high-interest debt, or just have more breathing room in your budget. And if you're a BiggerPockets Pro member, there's an extra reason to check it out. Get approved for the Aven card and you'll get a $400 statement credit

• 12:25Henry Washington?

  after spending $400 on your Aven card. Enough to cover your entire annual Pro membership. Head over to aven.com/biggerpockets to see if you qualify. Aven Financial, NMLS #2042345. Cards issued per 20 license from Visa USA, Inc. by Coastal Community Bank. NMLS #462289. Member FDIC, equal housing lender, subject to approval, terms apply. Visit aven.com for details.

• 12:47Speaker 02

  The action's on the court. And as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch, and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside, 26 to 27. No purchase necessary. Open to U.S. residents 21+. Begins on October 1st, 2026 and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes, and details.

• 13:18Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm Dave Meyer. Today, we are doing our September housing market update. Before the break, we talked about mortgage rates and why they're high. And I said that I think the rubber's going to start to hit the road. We're going to see prices come down. Better deals are going to start to come this winter. And there are a couple of reasons for that. First and foremost is just seasonality. Prices always go down in the winter, even during the strongest markets. You see these ebbs and flows throughout the seasons, and the winter is just not a popular time to buy a home. And with that lower demand, you usually see lower prices. But I think a couple of other things are starting to converge here that show that prices are going to start coming down in a more meaningful way. And I'm not saying there's going to be a crash.

• 14:02Dave Meyer?

  We're going to talk about whether a crash is likely or not in just a minute. But just hear me out on the inventory stuff because this will make a little bit more sense. As of right now, at least according to Redfin, the total amount of homes for sale as of August, you know, last month's data, was 1.53 million. And this is a step up. It's up 4% from July. And 4% might not sound like a lot, but 4% month-to-month is unusual. That is an unusually large change in the amount of supply. And the reason we care about supply is because prices are dictated by supply and demand. And we already know that when mortgage rates go up, there's less demand, right? Less people can afford to buy homes. So what you really need to track in these scenarios is what's going on with supply?

• 14:47Dave Meyer?

  Because if supply also falls, then prices stay in equilibrium. That's what's happened the last four years. Everyone's been calling for a crash since 2022. But I've been repeatedly saying prices were not going to crash because if you looked at the data, even though demand went down, supply also went down. But right now, when demand is going down, supply is starting to go up. Now, it went up 4%. That is not an emergency, but we're starting to see this divergence where people, instead of saying, "Hey, I'm just going to wait this out," they're choosing to sell. And this is going to create a much stronger buyer's market. When there is a big difference between the amount of people selling,

• 15:30Dave Meyer?

  if there are more people selling, then more people buying. And there are a lot more people selling than buying right now? That's when buyers have their best opportunity. And when buyers have good opportunity and their choice of properties that they can buy from, that is when prices go down, right? Because just think about this logistically. If you're a seller, how do you compete for the buyer pool? If there are, I'm just going to use simple numbers. If there are 1,000 sellers, but only 600 buyers, how do you get the 600 buyers to buy your property? You lower your prices. You give them a better deal. You give better value. When that happens, in aggregate, prices come down, right?

• 16:12Dave Meyer?

  When all the buyers are out there flexing, showing that they don't have to buy your particular property, "What kind of deal can you give me?" That's when you get better pricing. And so the reason I think the rubber's going to hit the road and we're going to start seeing this happen in the winter is this divergence between supply and demand. Now, I don't personally think this is an emergency just yet. I don't think a crash is on the horizon. But I think the correction is going to go from, you know, just being a modest, flat pricing to probably modestly negative pricing. I have not made my predictions for 2027 yet. I will do that in a couple of months. But I would not be surprised if by the end of the year, we saw national housing prices down 1%, down 2%.

• 16:57Dave Meyer?

  So nothing crazy, but we've been sort of waiting for this to happen. Four years of low affordability, and the market has held up really, really well. But I think with these higher mortgage rates, everything going on with AI, the concerns in the labor market, we're going to start to see home prices come down. Now, of course, what I'm talking about is national data. And there's a lot of regional variance. There are places that are seeing big declines right now. Where I live, in Washington State, the Seattle metro area, we're seeing a lot of declines. If you look at places like Houston, Texas, another massive market, big declines there. Austin, Texas, a lot of Florida.

• 17:38Dave Meyer?

  Even some areas of the Midwest that have been resilient, like Detroit, are starting to see declines and increases in supply. Of course, a lot of places are still doing well. Primarily the Midwest and the Northeast. Places like San Francisco are seeing exceptionally strong housing markets right now. That's just why you have to look at local data. I like giving you the big-picture national headlines here because it helps you understand what's going on in a macro sense. Because when I say prices are coming down nationally, that means that for the most part, not everywhere, most markets are going to experience a slowdown.

• 18:19Dave Meyer?

  So even if you're in a market in the Midwest that is growing right now 5% year-over-year, maybe it comes down to 3% or 2%. Or if you're in a market that's flat right now, maybe it turns negative. But you do need to go out and look at this data for yourself. Luckily, there's tons of places you can do this entirely for free. Go on Redfin's data center. It's awesome. It's completely free. No sponsorship here. I just use it all the time. You should check this out. Great place to look at inventory and price trends in your area. So go check out your local data because that's going to be really important. Like where I'm in Seattle, it's definitely down. Like you can feel it, and good deals are coming. Like you see crazy deals right now compared.

• 19:01Dave Meyer?

  You can buy stuff easily 10% lower than it was a couple of years ago. And I think this winter, it's going to be 15%. Like that's, to me, that's what gets me excited is that there's good buying opportunities. Of course, you got to be careful. You can't just go out there and buy anything. But I do think there is going to be good buying opportunities out there. Definitely worth keeping your eyes open for because as a buyer, as a real estate investor, motivated sellers is the best person to buy from. Someone who says, "I just want to get rid of this. I'm willing to lower my price. I'm willing to give concessions in order to move this inventory." And there's just going to be more and more of those people. And so the key here is to really just buy at a discount.

• 19:44Dave Meyer?

  You really need to find the best possible deal and buy great value. Find those great properties that you can buy 5%, 10%, 15% under current market comps. Because then if prices go down 3% next year, you don't care. You still have equity because you bought at such a good price when you went out there. And of course, not every seller is going to be selling to you for 5% or 10%. But that's the job of the investor. Go find the ones who will. Be patient and identify properties that are great locations that you're going to be really happy to own 10 years from now. And go negotiate a great price on it. And if you can't walk away, you don't need to rush right now.

• 20:28Dave Meyer?

  Not saying you should wait forever and try and time the market, but don't rush into any particular deal because there's going to be more, there's going to be plenty in the next couple of years. There might not be a lot of inventory on the market, but the percentage of motivated sellers who are cutting prices in a declining market is going to go up and that's your opportunity. So make sure to keep your eyes out. Now, I am saying this all under the presumption that there is not a full-blown crash, but we need to address that because when prices are going down, it is very reasonable and it is wise, it is prudent to ask if the market is going to experience a crash. And for that, we need

• 21:10Dave Meyer?

  to look beyond inventory. We just can't look at active listings or new listings. We have to look at the health of the credit market and mortgage markets. And we're going to do that in our risk report right after this quick break. Stick with us. We'll be right back. You know, when I first started sharing my real estate journeys online, I didn't have a website. I had a spreadsheet, an Instagram account, and no idea how they'd ever connect. I remember thinking a real website was going to cost me thousands of dollars and take a developer weeks to build. So I kept putting it off. Then I found Hostinger. I typed in what I wanted, a site to show off my deals, share my story and capture leads. And their

• 21:51Dave Meyer?

  AI builder had a working version live in minutes. No code, no designer, no developer needed. And it didn't stop at launch. Once my site was live, Hostinger's AI agent helped me figure out what to try next, acting like a built-in team of specialists for SEO, website copy, email marketing, and more. Domain, website, email, marketing, one Hostinger account covers it all. So you're not stitching together five subscriptions or wondering if they even talk to each other. Plans start at just $3 a month, so you can begin at your own pace and build from there. Hostinger builds your vision step by step. Create your

• 22:31Dave Meyer?

  website today. Go to hostinger.com/realestate and use code REALESTATE for 10% off now.

• 22:38Henry Washington?

  Buy smart, drive for less, and trade for more. That's Toyota affordability. And it all starts with a great deal from your local Toyota dealer. Make a smart buy on an all-wheel-drive Camry, Corolla Cross, or get a Corolla sedan packed with the latest features, advanced tech, and head-turning style. Take a test drive in two of Toyota's most popular SUVs, the spacious, family-friendly Grand Highlander and adventure-ready RAV4. And with so many hybrid and plug-in hybrid models available across the lineup, plus efficient all-electrics like the BZ, BZ Woodland, and all-wheel-drive CHR, you can drive your way and skip the pump. And long after you leave the lot, your Toyota keeps delivering with legendary resale value built on a reputation for quality and reliability.

• 23:22Henry Washington?

  So when it's time for your next Toyota, you could trade in for more from a great deal today to a great value tomorrow. A Toyota is right for you. Shop toyota.com for deals and details, or stop by your local Toyota dealer today. Toyota, let's go places.

• 23:38Dave Meyer?

  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 handling all of it. You can

• 24:19Dave Meyer?

  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, making it one of the largest

• 25:03Dave Meyer?

  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.

• 25:47Speaker 02

  The action's on the court, and as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch, and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside, 26 to 27. No purchase necessary. Open to U.S. residents 21+. Begins on October 1st, 2026 and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes, and details.

• 26:18Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm Dave Meyer. Today, on our September housing market update, we've talked about mortgage rates, we've talked about price and inventory trends. Let's go through our risk report. And again, for anyone who hasn't listened to our monthly updates, this is basically when we assess the risk of a crash in the housing market each and every month. And for this, there are different ways you can look at it. One is looking at inventory, and as we talked about, it is going up a little bit. It went 4% up in one month. Not an emergency, but if it grows 4% every month for a couple of months, that might be a problem. That's something we're going to have to keep an eye on. But that has not happened. One month of data is not reason to freak out

• 27:01Dave Meyer?

  about pretty much anything, and I think inventory falls into that category as well. But we got to look at mortgage quality. Like, are people paying their mortgages on time? Because the most likely cause of a crash is through the credit markets. Basically, people can no longer pay their mortgage on time, and they are forced to sell. They might be forced to sell even if they have equity. They might be forced to sell by a bank to avoid foreclosure, or in some cases, people will get foreclosed on. And the reason this can create a crash is because it floods the market with inventory, right? If all of a sudden, a lot of people

• 27:44Dave Meyer?

  are forced to sell, then instead of having, using our simple example, 1,000 sellers to 600 buyers, maybe you have 1,200 sellers to 600 buyers, and that puts more downward pressure on pricing. Then people freak out, they put their property on the market, and it creates kind of this negative feedback loop that can lead to a crash. You know, I'm oversimplifying it right now, but that can happen. So when we look at the mortgage market, what we see is strength. It's actually doing quite well. So there's a couple of different ways to measure this, but one of them is mortgageholder equity, how much equity they have in their properties. And right now, it is literally at an all-time high. In Q2 2026, I know people say all-time high, and they're just saying recent high. This

• 28:28Dave Meyer?

  is literally an all-time high, $18 trillion in equity for mortgageholders. That is a ton. And out of that $18 trillion, almost $12 trillion is considered tapable, which is just a weird word, but it's basically just saying like, if you wanted to do a cash-out refi or do a HELOC, you could, meaning that on average, the average borrower can take out $212,000 from their existing home to use for everyday expenses. And so this tells us, first and foremost, that people are doing pretty well. And if they need cash to cover an emergency, they have equity in their home they can tap. They are not going to necessarily be forced to sell to realize that money. And so that prevents that forced

• 29:13Dave Meyer?

  selling and that uptick in supply that can lead to a crash. So this is sort of like a shock absorber for the industry. Like, equity-rich owners, they don't do distressed sales. That's what happened in 2008. That's not happening right now. In 2008, prices went down so quickly and there were so many things going on, there was a lot of people underwater on their mortgage. And right now, there are some people underwater on their mortgage, but it's very few, and it's basically only people who have bought from 2022 until now. So there is this sort of cohort of people, and it's not a lot even in that cohort, but there is some underwater mortgages, right, that has gone up. But if you compare

• 29:56Dave Meyer?

  that to the total size of the mortgage market and the housing market, it is very, very small. So that is one piece of good news and relative strength for the housing market. Just to put this whole underwater mortgage thing in perspective, the number of borrowers underwater as of August 2026 is up a lot, 44% year-over-year. So that sounds scary. You're probably going to see that headline on social media, people trying to sell you some nonsense, right? They're going to say, look, it's up 44%. And that is technically true. But there's something called the base effect that goes on here, where it's like going up 44% from a very low number. So it sounds like it's going crazy, but it's really not. Because even though the total number is about 800,000 mortgages are underwater,

• 30:39Dave Meyer?

  that is out of 50 million mortgages, right? So we're talking about less than 2%. It's really not that much, and there's always mortgages underwater. The second thing to remember about underwater mortgages is that does not mean you get foreclosed on. People get confused about it, and they get this wrong all the time. Your mortgage underwater does not mean you're foreclosed on. Only way you get foreclosed on is if you're not making your mortgage payments. And for that, we need to look for active distress. We can look at mortgage delinquencies. As of the last month, we have data for, the national delinquency rate rose five basis points, that's 0.05%, so not a lot, to 3.55%.

• 31:26Dave Meyer?

  Now, again, that is up a little bit, but that is still significantly below where it was pre-pandemic. In 2019, the amount of distress we had was 4.16. And so we're still below that. So all these people saying people are being forced to sell, that is just not true. Are foreclosures going up? Yes. They're going up because they were artificially low to moratoriums during the pandemic. Right now, foreclosure data, distress data, is lower than it was in 2019, when zero people in the economy were concerned about a foreclosure crisis happening. So it's really important to keep these things in mind. And these are the reasons why I still

• 32:11Dave Meyer?

  don't believe a crash is the most likely scenario. Has the risk of a crash increased? In the last year, I would say yes, it probably has gone up a little bit, but I still don't think that's even close to the most likely scenario. I think what we are in for is more of a traditional correction where prices come down a little bit over time. It might take a couple of years, too. So I don't think it's going to be this big, steep crash thing. I think we're going to see prices grind down a little bit, couple percentage points in the next year, maybe a couple more percentage points the year after that. And so that sort of brings us to the last segment of the show today. It's like, what do you do about this, right? Inventory is up, demand is kind of flat, it's going down a little bit. Prices are up right

• 32:56Dave Meyer?

  now, but it's softening, it's probably going to go down. Fed's hiking rates, like, you know, what, what do you actually do? I'm going to come back to that perspective, because if you're a flipper right now, or you're trying to do some short-term deals, it is really risky right now. I've done some flips, I'm in the middle of some flips, and I actually think they'll do fine, but like, I don't know if I'm going to do a lot more flipping right now in Seattle unless I can get a screaming deal on the buy. Like, I'd need to get it for 60 cents on the dollar. Then maybe I can do it. Because you're just getting for such a good deal, and you underwrite it for, hold on to it for longer, that would be fine. But it's risky. I think everyone should acknowledge that. On the other side of the spectrum, though,

• 33:36Dave Meyer?

  if you are a buyer, this is a good time. And I think it will be for the next year or two. I think we're in for at least a year or two where buyers are going to have all the power. And you need to flex that. So the number one thing I recommend for people is establishing a really clear buy box. At what price point do you feel you can buy an asset in your market where even if prices went down 5% or 10% over the next few years, pick a number, right? I don't think they're going to go down 10%. I would be surprised by that. But just say 10%. If that's what makes you feel comfortable, pick 10%. Pick 15% and say, I will only buy

• 34:16Dave Meyer?

  a deal if I can get it for 15% below current market value. And then stick to that. That's the way to do it. If you have an aggressive target like 15%, you're going to have to talk to way more sellers, but you can probably do it. Depending on your market, right? Like, if you're in a strong market, if you're in Hartford, Connecticut, if you're in Madison, Wisconsin, if you're in Indianapolis, you're probably not getting that. But in those markets, the prices aren't going to decline that much. So maybe you set your target at 5%. If you're in a market like Seattle, or Denver, or Austin, pick 20% or 15%, whatever. Pick a number and go out and find a great asset that you can buy at a huge discount. And then grind. That's

• 34:59Dave Meyer?

  what it takes. Go out and find the seller who's willing to meet that price, because they're going to be there. But be patient at the same time. If it takes a month, fine. If it takes three months, fine. Takes six months, fine. Go find a good asset that you're going to want to hold on to for 20 years. That's the job of the investor right now. Go find a deal you can buy well under market comps. Your negotiating leverage is real. It is what differentiates this market. It is the thing the market is giving us right now. Take this fact, 60% of US homes sold in August sold for below their original asking price.

• 35:41Dave Meyer?

  No one's paying asking price right now, right? Miami, 83% sold below asking. Austin, 82%. Dallas, 80%. Go out and don't just get a discount. Go out and get a big discount. Use what the market is giving you. And when you underwrite these deals and you stick to this buy box, make sure you are not counting on a refi. I have been railing against this date the rate, marry the house, you can just refi in a couple of years nonsense for years. It is such bad investing advice. Underwrite with the rate you have at 7%, 7 and 1/4, whatever it is. That's how you got to do it. When you set your buy box, you got to say, I'm paying

• 36:24Dave Meyer?

  7 and 1/4, I'm going to be paying 7 and 1/4, and I'm only buying deals that cash flow that I can buy under market comps with these realities. That's how you do it. Just be patient and diligent. You can absolutely do this. So those are my first two pieces of advice. Stick to your buy box, under market comps, underwrite with the rate you have. And lastly, use local market data. Hopefully, this national story that I'm telling you helps you understand the broad trends and the pressure that sellers are going to be feeling, because I think that's going to be somewhat universal. Maybe not San Francisco, but the rest of the country, sellers are going to start getting a little nervous. But use local market data, whether that's from your agent. Go find a great agent on BiggerPockets and talk to them about it.

• 37:09Dave Meyer?

  Or you like doing research yourself, go on the Redfin Data Center and check this out. But go find market data. That's how you're going to inform that buy box and be able to identify those diamonds in the rough, because there's going to be a lot of junk, but a lot of good deals. So that's where you need to focus your time. This is what I'm doing. It's what I see all experienced investors doing, and it's what I recommend you do as well. That's our show for today. Thank you all so much for watching this episode of the BiggerPockets Podcast and checking out our September housing market update. If this was helpful to you, don't forget to subscribe to our YouTube channel for more information just like this. I'm Dave Meyer for BiggerPockets. Thank you so much. We'll see you next time.

• 37:52Speaker 03

  Hey, Bose here. On your next track, listen for the decisions. Distortion on the bass, the vocal right up front. Every choice deliberate. With Bose, you'll hear it all. Your music deserves Bose.

• 38:07Speaker 04

  Mr. Monopoly here. Miss me? Monopoly is back at McDonald's with millions of prizes. A 2027 Jeep Cherokee, a Carnival Cruise vacation, gift cards from DoorDash, and Best Buy. Feel then play in the McDonald's app. Get your bag. No purchase necessary. 50 U.S. and D.C. Age 18+. See playatmcd.com for rules and playatmcd.com/amoe for info and playing without purchase by mail by November 2. Chance card game ends November 8. Game ends November 22, 2026. See rules for prize details. Monopoly is a registered trademark of Hasbro.