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Surviving and Thriving in 2026

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By Rick Tobin

As we kick off the new year here in 2026, many of us wonder if this year will be stronger or weaker and whether or not this will be more of a buyer’s market than a seller’s market. Either way, there will be success if we focus more on the potential solutions and opportunities more so than the temporary obstacles standing in our way.

Prices for goods, services, or assets like homes can be simplified by way of the Law of Supply and Demand as I learned in past Economics courses that I took as a student and later wrote as an author.

When supply exceeds demand, prices tend to value. Conversely, increasing demand and decreasing supply usually cause prices to rise.

Let’s review some factors that may cause home prices to be flat or drop here in 2026:

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Concerning Housing and Economic Trends

1. As of Q4 2025, U.S. home sellers or listed homes outnumbered buyers by 530,000, which was an all-time record high. This is partly due to home prices being at or near all-time record highs in most U.S. regions, while making housing costs more unaffordable.

For example, the U.S. home price-to-median household income ratio is close to 7.0x, near an all-time high. For comparison purposes, the 2006 housing bubble price peak was 6.8x.

The difference between the median U.S. home price ($426,800) and household income ($83,700) reached $343,100 in Q4 2025, which was the largest gap in history as per Barchart.

2. U.S. homebuyer demand is near the lowest level on record primarily due to how unaffordable payments and home prices are across the nation. The typical homebuyer needs to pay 39% of their gross income in order to afford to purchase a home. Sales demand plummeted to the lowest level in 40 years (only 4.7% of occupied homes sold in 2025, which was the lowest number since 1982), as per Reventure.

Please note that this is gross income (before taxes). In many states like California, the combination of state and federal taxes brings this monthly income much lower, so many buyers are paying upwards of 50% to 65% of their net monthly income to buy or lease a home.

3. We have an inverted housing market in so many different ways, especially as it relates to age. There are more home buyers over age 70 than under 35 in today’s upside-down housing market. The average U.S. home seller age in 2025 64, while the average Realtor age is 60 as per NAR. The average first-time home buyer in California last year was 49.

4. The published national home listing inventory supply is rising, while still being almost half of peak highs in 2007 when it reached near 4,000,000. Yet, this seemingly “good news” is offset by the possible “bad news” that’s included next as #4.

5. The distressed “shadow inventory” is much larger than the published national home listing supply. The national home listing inventory and published foreclosure date is nowhere close to being accurate and is artificially suppressed, partly due to the millions of distressed forbearance deal (FHA and VA loans, especially) situations where many homeowners haven’t made a single mortgage payment dating back as far as October 2020 when many of the Covid-19 forbearance plans started. As these distressed properties later become listings or go to foreclosure, the home listing supply should increase.

6. Average new U.S. home prices are now priced below older existing homes, which is something that rarely happens because most buyers are willing to pay a price premium for a new home with all of the fancy new appliances and other gadgets. Builders are so inspired to unload their unsold inventory that they’re offering massive credits to buyers to buy down their mortgage rates and pay for their closing costs.

Let’s take a closer look at data that was originally compiled by ResiClub as it relates to how unsold new home inventory increased between July 2016 and July 2025:

The unsold new home number for July 2025 was the highest number since July 2009 (126,000), which was when the housing market was near the previous bottom during the depths of the Great Recession.

7. The most important word in the “single-family home” description is family. As the family unit continues to rapidly decline, it will directly impact future home value trends.

Here’s some other family trends that I’ve shared in past articles such as The Interplay of Medical, Insurance, and Housing Financial Burdens:

* The overall divorce rate in Orange County, CA is 72%; it’s 60% in California; and 50%+ nationwide.
* 41% of first marriages end in divorce, 60% of second marriages end in divorce, and 73% of third marriages end in divorce.
* The average length of a marriage in the U.S. that ends in divorce is 8 years from start to finish.
* Since 1990, divorce rates for people over 50 have doubled; they’ve tripled for people over 65.
* The U.S. now has the highest percentage of single-person households in the world and lowest marriage rates ever.
* U.S. fertility rates are the lowest ever, as fewer babies are born.
* USA is #1 for highest teen pregnancy rate in the industrialized world.
* Approximately 50% of children are born to unmarried women under 30 here in the USA.

8. The purchasing power of $1 fell to about 7 cents over the past 50 years, so most of the dollar’s decline in value has taken place during this 50-year time period that followed the removal of the dollar from the gold standard during the 1971-1973 years as I shared in the Asset Prices Surge Amidst Dollar Devaluation Trends article.

Because real estate is an exceptional hedge against inflation as home values tend to rise at least more than double the annual published inflation rates, this has actually been a positive for homeownership and a huge negative for other products and services.

9. The median household family income is not keeping up with rising costs for things like housing, cars, education and healthcare. This is partly due to rising divorce and unemployment rates and the ongoing collapsing purchasing power of the dollar.

For example, let’s compare income and expense data dating back to 1970, which was just one year before President Nixon removed our dollar from the gold standard and inflation skyrocketed, while our purchasing power imploded over the past 50+ years.

The median U.S. household income increased from $10,000 in 1970 up to $106,000 in 2025, which was an increase of 10x (or 10 times). Please note that this is household income, which may include multiple income sources from the adult occupants.

While the rising household income was a positive, the negatives were as follows during that same 1970 to 2025 timespan:

● Median U.S. home prices rose from $25,000 to $445,000 (double this amount in California), which was an increase of 17x.
● Median car prices jumped from $3,600 to almost $50,000, which was an increase of 14x.
● The median college price rose from $2,900 per year to $45,000, an increase of 16x.
● The average costs of healthcare per person skyrocketed from $350 to $14,600 per year, which was a massive increase of 42x.
Source: The Finance Newsletter

Positive Housing and Economic Trends

1. More than 40% of owner-occupied single-family homes are now owned free-and-clear with no mortgage debt. Homeowners with no debt are much more likely to not sell at hefty future discounted prices because many of these homeowners, or their heirs, can just sit back and wait for the housing market to strengthen again.

2. Large billion and trillion-dollar corporations like BlackRock, Vanguard (largest BlackRock shareholder), Blackstone (a BlackRock spinoff and the world’s largest commercial real estate owner) continue to purchase both residential and commercial real estate.

3. An increasing number of foreign buyers from places like China, Japan, and India keep purchasing U.S. real estate. As per this linked video from the Econofin team, there’s potentially a $56 billion dollar cash buyer invasion from foreign investors (a +44% foreign investor percentage surge) that is keeping real estate demand steady in many U.S. regions.

4. The ongoing “shadow inventory” of distressed residential and commercial real estate properties and mortgages, which includes the estimated all-time record high 12%+ of all FHA loans that are currently delinquent and trillions of dollars’ worth of ballooning commercial mortgages, are continued to be delayed via “extend and pretend” strategies or silently being sold off to huge investment funds. As a result, these strategies are artificially suppressing the residential and commercial real estate inventories that may keep values at least flat instead of rapidly declining.

5. Both short-term and long-term rates are expected to keep falling in 2026. Lower rates make home purchases more affordable for an increasing number of buyers. Mark Zandi, the well-known Moody’s Analytics economist, forecasts at least three rate cuts in 2026 as shared in this recent CNBC article.

6. Existing-home sales are projected to rise by around 14% in 2026, according to the National Association of Realtors (NAR) Chief Economist Lawrence Yun, partly due to lower rates and increasing home listings for sale.

7. The dollar is more likely to keep falling in 2026 which, in turn, should push asset values higher like we saw in 2025 with these asset gains:

● S&P 500: +16.65%
● Nasdaq 100: +20.14%
● Dow Jones: +13.40%
● Russell 2000: +11.31%
● Gold: +61.48%
● Silver: +139.21%

Source: The Market Hustle

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Back in Rome in 284 AD, Spain in 1607, the Netherlands in 1815, and Great Britain in 1931, each region saw the price of gold and silver triple just a few years before their economic and currency resets. We’ve seen the same thing happen here with skyrocketing gold and silver prices in the U.S. in recent times, interestingly.

8. Pending home sales jumped +3.3% month-over-month in November 2025, as per the NAR. This was the 4th-consecutive monthly gain, which matched the longest streak seen during the 2020 pandemic declaration dates. The West posted the largest pending home sales increase, which is very positive for our home state region of California and other nearby states.

9. There were almost 40 million more people who lived in the U.S. in 2025 than back in 2007. Because there’s still a shortage of affordable housing to rent or buy, the demand for properties should remain solid.

Be Proactive, Not Reactive

Whether you think that the housing market will boom, bust, or be flat in 2026 for your target housing region, there will still be opportunities.

For buyers, you may have much less competition to write up discounted offers that may be more likely to be accepted by a motivated seller with a property listing that is sluggish at 6 months DOM (Days on Market) or longer. It’s better to be the only buyer prospect than having to compete with 80+ other buyers or investors willing to pay prices well above the list price.

If both home values and rates drop significantly in 2026, it may allow you the option to buy your very first home or rental property. If so, this is positive news for you to build up your future net worth by being brave enough to purchase in today’s hectic world.

Please research on almost a daily basis to stay on top of housing market trends. In any type of housing market and economic cycle, there are fortunes waiting to be created for those people willing to take action instead of just being fearfully reactive and/or inactive.

The more you learn, the more likely that you will survive and thrive in 2026 and beyond.

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California.

Rick provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California.

Please visit his website at Realloans.com for financing options, join his investment group at So-Cal Real Estate Investors, and follow his new So-Cal Real Estate TV channel for more details.

Rick Tobin
Realloans (Real Estate Loans)
https://realloans.com/
Phone or Text: (760) 485 – 2422
NMLS 1934868
Equal Housing Opportunity / Equal Housing Lender
To quickly apply online: Loan Application
For our real estate course: Learn Real Estate

Please follow our new real estate channel (watch on television, computers, and phones): So-Cal Real Estate TV

Our Facebook business pages: Realloans, Inside Los Angeles, Inside Pacific Palisades, Inside Long Beach, Inside Huntington Beach, Inside Orange County, Inside La Jolla, Inside San Diego, Inside Lake Elsinore, Inside Temecula Valley, Inside Coachella Valley, and So-Cal Real Estate Investors.

Here are some of my articles: The Fall of 2025 and Rise of New Opportunities, The Intersection of Declining Home Sales and Creative Marketing, Are Lower Rates on the Horizon?, Weather Extremes, Homes, and Insurance Risks, The California Gold Rush Boom, and Are You Focused on Commercial Real Estate?

Please join my So-Cal Real Estate Investors group that meets at Canyon Lake Golf & Country Club, Shoreline Yacht Club in Long Beach, and online: So-Cal Real Estate Investors.

⏰ New Webinar, New Event, New Replay

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Join Us for Our NEW Investor Summit!

Thrive in 2026 – Capitalize on a Buyer’s Market

START THE NEW YEAR RIGHT – RSVP TO OUR NEW EVENT

Network with sophisticated investors from across the country in beautiful Southern California at Realty411’s NEW Real Estate Summit

To celebrate the beginning of a new year and the publishing of the latest print edition of REI Wealth Magazine #65, Realty411 is hosting a “Real Estate Investor’s Summit – Thrive in 2026, Capitalize on a Buyer’s Market!”

This one-day impactful conference is designed to help guests achieve maximum success in real estate investing and beyond. Join us on Saturday, March 28th for a one-day event featuring timely REI insight, top educators, and active investors from locally and out of state.

Realty411’s “Real Estate Investor’s Summit – Thrive in 2026!” is being held at Four Points by Sheraton Los Angeles Westside, located at 5990 Green Valley Circle, Culver City, California, 90230. The venue is located near LAX, convenient for guests visiting from out of state.

This is the place to learn real estate investing with experienced investors and real estate professionals who have personally invested both locally and throughout the United States.

Guests who join us will gain specialized knowledge and learning in diverse real estate investing topics and subjects. Our featured educators have decades of personal experience in real estate investing and will answer your complex questions.

If you are serious about positioning yourself for maximum success in 2026, join us! Learn about top markets, success strategies, insider tips, private capital, commercial real estate, and so much more.

As a bonus, all guests will receive the latest print edition of REI Wealth Magazine #65, published by Realty411.com. The latest edition of Realty411 magazine will be available, as well as past editions, too.

Realty411’s Webinar –
Surviving and Thriving in 2026

Join us online for Realty411’s latest webinar and gain access to wonderful REI education, off-market property strategies, plus insider insight from top professionals.

Our goal is to make a fantastic online and offline environment where learning and growing are key. We hope to assist as many estate investors as possible on their journey towards success.

Register now for our Surviving and Thriving in 2026 Webinar!

OUR FEATURED SPEAKER
RICK TOBIN – REAL LOANS

Rick Tobin, owner of Real Loans, has had an experienced and diversified background in the real estate, mortgage, and development fields over the past 30+ years. His affiliate companies have funded, built, and sold more than a billion dollars’ worth of residential and commercial properties over his career at various office locations in the counties of Orange (his hometown of Huntington Beach), Los Angeles (near Santa Monica and Pacific Palisades, where he was a long-time resident), and Riverside (Rancho Mirage and near Canyon Lake).

Rick has held eight (8) different real estate, securities, and mortgage brokerage licenses to date. He has been interviewed as the main guest on various television and radio shows over the years. Rick is also a University of Southern California (USC) graduate who studied Economics and Real Estate Finance. To date, Rick has had several million words published over the past 30 years about real estate, finance, economics, investing, taxes, and other topics.

Rick is on the Board of Directors for the Trusted Business Partners networking group, with chapter locations throughout many parts of Southern California, as well as on the Board of Directors for the Canyon Lake Chamber of Commerce. He is an active member and supporter of the Lake Elsinore Chamber of Commerce and the Menifee Chamber of Commerce as well. He also proudly serves as the First Commander at our nearby Sons of the American Legion.

Rick also leads the So-Cal Real Estate Investors group where he teaches people how to creatively buy, finance, and sell real estate. Rick has hosted several events over the years with many groups and with Realty411 at locations such as Canyon Lake Golf & Country Club, the Laguna Cliffs Marriott Resort in Dana Point, and at Shoreline Yacht Club in Long Beach.

Be sure to join us for this informative session filled with strong statistics, fun facts, timely trivia, and loads of holiday fun. 

Webinar Replay with:

Amanda Hart – Easy Street Capital

For those who attended last weeks’ webinar in person, thank you. If you missed the live webinar, we do have replay for you to watch. The video is a segment of the webinar.

Amanda’s presentation on Hard Money Lending was extremely insightful and she breaks down complicated financial concepts in an easy format, be sure to watch this informative video replay.

Amanda Hart has been lending with Easy Street Capital since 2021, now working exclusively with investors on their rehabs, rentals, and new build construction goals.

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NEW EDITION

The Fall of 2025 and Rise of New Opportunities

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By Rick Tobin

“All the trees are losing their leaves, and not one of them is worried.”
– Donald Miller

Our lives have often been compared to the four seasons of spring, summer, fall, and winter. Regardless of whether you perceive your current situation in life as bright and sunny or dark and doomy, each season of life is a new opportunity for positive growth that you should embrace.

It’s generally much easier to be grateful when life seems easiest, most fun, and when you have plenty of cash in your pockets. However, some of our best learning experiences tend to happen during our most challenging seasons of life if we’re willing to focus on the potential solutions and opportunities more so that the temporary obstacles standing in our way.

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When many of us think of the fall season, it can be described as a time when natural beauty nearby is filled with colorful trees and more vivid sunsets and weather temperatures are seemingly ideal in most regions.

However, the word “fall” also has negative connotations such as the “Fall of Rome” era, or the end of the Western Roman Empire, that happened near 476 AD when the most powerful region in the world collapsed due to massive health challenges and death from the bubonic plague or Black Death which, in turn, led to hyperinflation, numerous unusual firestorms, a devalued currency system, and war.

“All roads lead to Rome,” as the old saying goes, because history tends to repeat itself, for better or worse.

The Fall of 2025’s Economic Data

Let’s take a closer look below at some concerning economic data that’s been recently shared:

* Foreclosures increased 20% in October 2025.
* Job layoffs in October were the most in 22 years. Published year-to-date job layoffs in 2025 have surpassed year-to-date job losses in 2008.
* New job hires are the slowest since 2009.
* The savings rate is the lowest on record.
* 12.1% of FHA loans are delinquent and make up almost 50% of all Q3 foreclosures.
* Consumer Credit Applications are now being rejected at nearly 25%, the highest rejection rate ever recorded, according to Charles Schwab and the New York Fed as of 10/31/25.
* Mortgage refinance application rejection rates hit 45.7%, an all-time high.
* Average past-due utility bills hit an all-time high at $789, as per The Century Foundation & the University of California Consumer Credit Panel.
* Car repossessions are the highest since 2009.
* The 60-day delinquency rate for subprime automobile loans just reached an all-time record high of 6.65% in October 2025.
* Automobile loan rates are approaching record highs, especially for subprime borrowers (13% to 30%+ rates).
* Student loan delinquencies are the highest ever with nearly 20% of borrowers at 90 days or longer for missed payments.
* Unpaid credit card debt balances reached a record $1.233 trillion in Q3 2025.
* Credit card APRs (rates and fees) are near the highest ever (24%-40%+).
* Early paycheck advance loan rates are as high as 400% to 520% APRs.
* More than 50% of Americans use Buy Now, Pay Later (BNPL).

Worsening Debt Trends

In addition to all-time record highs for unpaid credit card debt reaching 1.233 trillion dollars in the third quarter of 2025, the US credit card capacity, or maximum credit card limits, reached a new record high of $5.3 trillion, according to the New York Fed.

However, there’s still nearly $4 trillion dollars in available unused credit for US borrowers to access from their credit cards.

Credit rejection rates for most types of new credit applications continue to soar to new highs, as per New York Fed data and The Kobeissi Letter.

For example, let’s review the percentage rates for credit application rejection rates in recent times:
● Automobile loan rejection rates: 15.2% (second highest on record)
● Credit card rejection rates: 21.2%
● Overall credit application rejection rates: 24.8% (new record)
● Mortgage application rejection rate: 45.7% (new record)

These rejection rates have accelerated at a faster pace since 2020 for many lenders. For example, the overall rejection rate for credit applications has risen by +10.4% between February 2020 and Q3 2025.

Snowballing Federal Debt

In 1790, US national debt was just $70 million. By 1980, it reached $1 trillion for the very first time, which took 220 years to reach. Now, we’ve surpassed a staggering $38 trillion in debt.

It took more than 200 years for the federal debt to surpass the first $1 trillion dollar debt balance number in October 1981. Now, the US federal debt compounds and increases by another $1 trillion every 75 days or so.

The US Treasury posted a $284.4 billion deficit in October, which was the worst opening month to any fiscal year in history.

October’s Interest payment on US debt was a record $104.4 billion, as per Stock Sharks. To put this into better daily perspective, US federal debt is growing at a pace of $22.5 billion every single day.

How is all of this federal debt good for real estate investors?

Answer: It’s more likely than not that inflation will keep rising and the dollar’s purchasing power will keep falling. Because real estate is an exceptional hedge against inflation and an imploding dollar, home prices may either stabilize or keep increasing even if the overall economy keeps on weakening.

Positive Housing Trends in 2nd Half of 2025

Now, let’s review some more positive housing data for Q3 2025:

Single-family home prices had positive gains in 77% of 2350 metro areas in Q3 2025, according to NAR.

Rising Home Prices in Most Metros – Q3 2025

“Home prices rose in Q3 2025, with national median prices up 1.7% to $426,800. Monthly mortgage payments increased to $2,187. The median family income needed for a 20% down payment is $104,996.”
– NAR Research

The Top 5 single-family areas with the highest home appreciation rates in Q3 2025 were are as follows:

1. Owensboro, KY
2. Rockford, IL
3. Springfield, IL
4. Cape Girardeau, MO-IL
5. Fond du Lac, WI

The Top 5 Most Affordable Housing Regions

Here are the Top 5 most affordable cities in America as of October 2025, which have much lower percentage of income to monthly household payment numbers:

Out of the 100 major cities analyzed by RealtyHop, an estimated 68 of the cities had homebuyers paying more than 30% of their monthly income towards household expenses.

Unaffordable Housing Challenges

The dollar’s purchasing power continues to fall at a rapid pace. As a result, it’s still quite challenging to purchase groceries, clothing, cars, or homes at seemingly affordable prices.

The Top 5 Most Unaffordable Housing Regions

Two of the top 5 most unaffordable housing regions in America are located in Southern California – #1 Los Angeles and #2 Irvine, as per the RealtyHop Housing Affordability Index for October 2025.

Average families who earned the median income in Los Angeles must now spend a shockingly high percentage of 84.16% of their income on home ownership costs, as discovered in this RealtyHop survey. If true, the average Los Angeles resident would have just over 15% of household income left over to purchase groceries and pay for utilities, automobiles, clothing, home maintenance, and other basic necessities if they were actually able to qualify for a home mortgage with those very high debt-to-income ratios.

2025’s Most Unaffordable Highest Home Price-to-Household Income Ratio

In 2025, the Top 10 most unaffordable cities with the highest home selling price-to-income ratio are as follows:

1. Los Angeles, CA (12.2x),
2. San Jose, CA (11.0x),
3. Long Beach, CA (10.4x),
4. San Francisco (10.0x),
5. New York, NY (10.0x),
6. San Diego, CA (9.6x),
7. Miami, FL (8.5x),
8. Boston, MA (7.7x),
9. Oakland, CA (7.7x)
10. Seattle, WA (7.2x).
Source: Constructive Coverage

Income & Home Price Disconnection

Sadly, household income has not been rising as quickly as home prices over the past several decades, especially in California. This is partly why more family members are co-signing for mortgages to help buyers qualify.

● Median U.S. household income in 1968: $7,700/year

● Median U.S. household income in 2025: $66,000/year

● Median U.S. household income percentage increase between 1968 and 2025: +764%

● Median U.S. home price percentage increase between 1968 and 2025: +1,967%

Sources: Realtor.com, US Census, and SoFi

Increasing Mortgage Purchase Applications

In spite of mortgage application rejection rates hitting new all-time highs at 45.7%, US consumers are filling out mortgage applications at a faster pace. This may be partly due to so many lenders rejecting mortgage applications and borrower prospects may be completing multiple mortgage applications to qualify.

“US mortgage applications surged to the highest level since 2023 last week.

The Mortgage Bankers Association’s index of home-purchase applications jumped 7.6% to 181.6 in the week ended Nov. 21, 2025.”
– Yahoo Finance

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Buyer and Borrower Opportunities

The combination of falling rates and falling prices usually inspires more buyers to start looking at properties to purchase. For those buyer prospects who’ve been struggling to qualify for homes priced near all-time record highs in their region may now be pleasantly surprised to learn that they now can actually buy a home.

It’s never been more important than this season of your life to work with experienced mortgage and real estate licensee professionals who have been through the numerous booms and busts of the real estate seasons over the years or decades.

If you have credit or income issues, then please focus on ways to better improve them sooner rather than later so that you’re more likely to later qualify to buy your dream home or the next investment property for your portfolio.

Since the average buyer and seller age these days are within the 59 to 64 age range, many of these same buyers and sellers also made it through both the dark and doomy real estate investing eras up until they started to see more daylight in the perceived sunnier-like seasons.

Tenacity is what’s needed through each season. Instead of worrying about the coldest and darkest days, just remember that it’s always darkest before dawn because the sun does rise every single day just like you do when you rise up out of bed.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

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