Housing Market Update 2026 — The Hidden Costs Are Surging

[00:01] housing market updates. We're going to cover home prices, interest rates, and how the hidden costs are surging in the US. Let's start with home prices. This is a 5-year chart of median home prices in the US. It currently stands at

[00:15] prices in the US. It currently stands at $429,226. year. So, it should be very clear that there is no housing market crash. During the last housing market crash, median home

[00:30] 30%. And again, right now home prices are up by 0.9%. Okay, maybe you agree that home prices have not crashed yet, but maybe you

[00:43] crash soon. So listen, if that's what you believe or I'll tell you that it just all boils down to simple economics, supply and demand. And just think about it logically.

[00:57] For home prices to crash, you need much more supply than there is demand. And the supply side. So, there are currently 1.7 million homes listed for sale, and this is slightly down compared to 12 months ago.

[01:12] Okay, so a supply is down, but maybe demand has fallen more than supply. you would see a you know, the home prices crash, and home prices have been

[01:24] going up. Okay, so home prices have not been crashing, they haven't even been going down because the supply of homes is not surging up. Okay, so a supply is not surging up, but maybe not yet, but maybe it will. Maybe

[01:37] the supply of homes will shoot up when there's a massive wave of foreclosures. deeper down this like rabbit hole. And you know what? I'd say okay, yes, foreclosures are rising, it's true. So, does this spell trouble?

[01:52] And I want to show you the data. So, here's the foreclosure activity by year. you to take a look at where we stand as of December 31st, so end of the year 2025. Foreclosure starts are up by 14%

[02:06] So, take a look at that tiny little number in 2025. Add about 14% to that, and if you do that, I would say that's not alarming. And as a matter of fact, there are fewer foreclosures right now than there were

[02:21] back in 2005. And look at when foreclosure activity peaked in the last housing market crash. From 2005, it took 5 years for foreclosures to peak. And again, we're not even at 2005 levels

[02:34] yet. And just so you know, home prices didn't bottom out until 2012. So, if we follow a similar trajectory, maybe we're going to get a housing market crash and a home prices are going to bottom out in 2034.

[02:49] out last time. And it took a great financial crisis to make it happen. So, listen, I just I rest my case. Home prices are up, supply is down. I do not

[03:01] see a flood of inventory coming online anytime soon. that home prices are going to increase by 1.3% in 2026. Reuters economist poll says 1.8% home price growth. National Association of Realtors says 2

[03:17] to 3% growth. And in my opinion, as I said, late in 2025, 2026 is probably going to be a boring year, close to flat. So, what I'm saying is basically no housing market crash, again. Now, let's take a look at

[03:32] mortgage interest rates. This is a 5-year chart coming from the Federal Reserve. It shows the average interest rate on a 30-year fixed in the US. And as you can see, we're stalling around the 6% mark. And why is this

[03:45] happening? It's because mortgage interest rates are correlated to the interest rate on the 10-year Treasury notes. So, this is a Back when the interest rate on the 10-year note was so low, I mean, we're

[03:58] talking around 1.4%. We had mortgage interest rates of 3%. Now that the 10-year notes is around 4.2%, we have mortgage interest rates Now, I want to point this out to you. You see this little tick up, okay?

[04:14] That's because of the conflict that's going on right now. Interest rates on the 10-year notes went higher. That's because of rising inflation expectations. That's due to higher oil prices.

[04:27] So, you see how all of this is connected. If you're going to lend money note, and you expect the rate of inflation to increase, then you're going interest rates. And that's what we're seeing. So, the

[04:42] up, and that makes mortgage interest rates go up, or at least stop going But yeah, that's what's happening right now. And if the war ends, and oil prices

[04:54] come down, then you're going to see mortgage interest rates go down. that's happening right now, it's affecting millions of Americans that want to buy a home, because your mortgage interest rates is actually a

[05:06] big part of the home buying equation, of course. that it's not affecting just home buying, because it's affecting refinancing as well. Because if you refinance to a lower mortgage interest

[05:19] rates, of course, that can save you a lot of money on your monthly payments. rates, we were headed in the right direction, but that came to a hard stop, and it reversed over the past few weeks. But listen, I want to be absolutely

[05:33] I cannot promise you that the home affordability situation is going to improve once the war is over. That's because our country does not have the money for war. And of course, going to war is expensive. So, what's the

[05:47] What they always do. They're just going to print money to fund the wars, which of course is going to cause inflation, which is going to cause home prices to And the longer that this conflict drags on, the more money that they're going to

[06:02] have to print, and the more inflation that it's going to cause. the war. I'd rather talk about the hidden costs of owning a home. So, here's how much the average total payments for owning a home has gone up

[06:15] over the past few years. This is a 10-year chart. So, notice how it really accelerated after the pandemic, obviously because of all the money printing and inflation. Okay, so this is the total average

[06:28] But this, like this line that I've circled in red, is how much property insurance has gone up, and we are seeing no relief. And the next one I just circled is property taxes. Since 2019, insurance costs are up 72% and property

[06:45] So listen, I want you to think about that, because even if mortgage interest rates fall, then of course, yeah, that's going to help out home affordability. However, the affordability situation can continue to get worse

[06:59] if insurance and property taxes keep rising like this. nuts. Like it's wild. It's out of control. the situation. Like if you try to make the arguments

[07:12] that it's better to rent than own a home, then, you know, to that I would say that I agree with you if you're going to move less. But I just want you to understand that

[07:24] if you're renting, your landlord is just passing down these costs to you. So, you're paying for this one way or another, as a renter or as a homeowner. Anyways, that's why the home affordability index remains depressed

[07:38] levels. If it's at 100, that means that a median income family in the US can barely afford the median priced home in the US. paycheck to paycheck, and if there's any surprise expenses that pop up, then

[07:54] you're basically going to be screwed, and it's going to be going to the credit card or leaning on retirement plan early withdrawals. So, yeah, we might be slightly over 100, but I'm telling you that's nothing to

[08:06] but I'm telling you that's nothing to brag about. I mean, we were at 160, 170 last thing that I want to show you because I haven't showed this to you in because I haven't showed this to you in probably, you know, good 6 months or so.

[08:18] So, this shows you which states that people are going to and are leaving. darker the blue, the more people are leaving. The orange amber color means that people are going there. So, I want you to notice how Texas has

[08:33] basically reached an equilibrium. There was a big flood into Texas, but now it's stabilizing. Number three where people are leaving is Illinois. Number two is New York, and number one is California.

[08:48] And the number one state that people are relocating to is still Florida. Like, I Florida, but there's still more people going there than leaving. one surprising, and if someone wants to explain this to me, I'd really

[09:03] appreciate it because I don't know California as well as I'd like. The number one city that people are leaving in the country is Los Angeles. And although California as a state is losing people, the number one city where

[09:17] people are moving to in the US is actually Sacramento. So, what's going on updates. Please subscribe. Thank you for the support, and I wish you a very nice the support, and I wish you a very nice day. Take care.