Wealth Building Through Real Estate

September 22, 2025 • Finance

Hosted by Dusty

About This Episode

Generated finance podcast with host Dusty based on prompt: Weekly Residential Real Estate updates with focus on long term wealth via real estate.

Transcript

Welcome to "Wealth Building Through Real Estate." I'm Dusty, your guide as we explore the fascinating world of U.S. real estate and uncover opportunities for long-term wealth.

Let's jump into what's been an interesting mid-September. Mortgage rates are on a downward trend, nudging prospective homebuyers and refinancers into action. The average rate on a 30-year fixed mortgage has dropped to 6.26%, the lowest since October 2024. This decrease has sparked a significant 29.7% jump in mortgage applications, with refinancing applications soaring by nearly 58%. Lower borrowing costs, combined with easing long-term Treasury yields, are bringing a breath of fresh air into the market.

Yet, despite these drops in rates, potential buyers remain a bit cautious. The median U.S. monthly mortgage payment has fallen to $2,604—over $200 less than the peak in May. However, pending home sales are only slightly up by 1.1% year over year. Many are holding out for further rate declines, highlighting the lingering impact of high rates, even as we anticipate potential Fed rate cuts.

On the home sales front, prices continue to climb. The median sale price recently hit $393,000, a 1.7% increase from last year. New listings are barely growing, up only 1.3%, indicating a tight inventory despite some improved affordability. And although pending sales have increased slightly, overall volumes remain low, emphasizing both seasonal factors and ongoing affordability challenges.

Regionally, Midwest and Sun Belt areas like Cleveland and Chicago are showing resilience. These cities have seen contract upticks, while places like West Palm Beach attract interest amid unique challenges like insurance costs. The National Association of Realtors notes that additional mortgage rate declines could spark significant activity, opening doors for millions of households currently hesitating.

In the public market, residential REITs have had a mixed performance lately. The Dow Jones US Apartment REIT index faced a slight decline, though the broader REIT index managed a modest increase. Longer-term, they continue to offer strong income streams, especially with demographic trends favoring sustained rental demand.

What does all this mean for long-term wealth building? Lower mortgage rates are boosting entry opportunities for both homeowners and rental property investors. Cities with diverse economies, such as Denver and Columbus, might offer steady appreciation and demand over time. Meanwhile, residential REITs provide portfolio diversification and potentially attractive yields, possibly outperforming traditional fixed-income investments.

As expected, continued Federal Reserve easing could lead to further mortgage rate declines, potentially dropping rates closer to 6%. That shift could stimulate broader market activity—good news for both homebuyers and rental investors. Yet, vigilance is key. Regional regulations, insurance costs in disaster-prone areas, and evolving work patterns will shape demand.

As we wrap up, remember that real estate remains a dynamic field with countless opportunities for those willing to navigate its complexities. When the dust settles, only the truth remains. Keep investing wisely and stay tuned for more insights on building wealth through real estate. Until next time, I'm Dusty. Take care.

### Mortgage Rate Movements and Buyer Activity

U.S. mortgage rates continued their downward trajectory in mid-September, providing a modest boost to prospective homebuyers and owners evaluating refinancing options. According to Freddie Mac, the average rate on a 30-year fixed mortgage fell to 6.26% in the week ending September 18, its lowest level since October 2024, down from 6.35% the prior week and 6.44% a year ago ([timesofindia.indiatimes.com](https://timesofindia.indiatimes.com/business/international-business/us-mortgage-rates-dip-to-lowest-since-october-30-year-loans-fall-to-6-26-refinancing-demand-surges/articleshow/123981503.cms?utm_source=openai)). The Mortgage Bankers Association (MBA) reported that in the week ending September 12, the overall applications index jumped 29.7%—the highest since April 2022—and refinancing applications surged by 57.7%, reflecting renewed consumer interest driven by lower borrowing costs and easing long-term Treasury yields ([reuters.com](https://www.reuters.com/business/us-30-year-mortgage-rate-drops-refinances-jump-mba-data-shows-2025-09-17/?utm_source=openai)).

Redfin’s latest housing-market update through September 7 shows the median U.S. monthly mortgage payment declined to $2,604—more than $200 below May’s all-time high—as the daily average mortgage rate dipped to an 11-month low of 6.28% ([redfin.com](https://www.redfin.com/news/press-releases/redfin-reports-lower-mortgage-rates-trim-hundreds-off-monthly-payments-yet-homebuyers-are-still-cautious/?utm_source=openai)). Despite this improvement in affordability, Redfin agents report that many buyers remain cautious, with pending home sales up only 1.1% year over year and the Homebuyer Demand Index down 2% from a month earlier, as prospective buyers await further rate declines before committing to a purchase ([redfin.com](https://www.redfin.com/news/press-releases/redfin-reports-lower-mortgage-rates-trim-hundreds-off-monthly-payments-yet-homebuyers-are-still-cautious/?utm_source=openai)). This dynamic underscores the lingering impact of high rates on housing demand, even as monetary policy signals point toward potential Fed rate cuts in the weeks ahead.

### Home Prices, Sales, and Inventory Trends

While mortgage rates have eased, home-sale prices remain elevated, reflecting constrained inventory in many markets. Redfin data for the four weeks ending September 7 indicates the median sale price reached $393,000, up 1.7% year over year—the second-largest increase since April—and median asking prices climbed 3.1% to $399,634 ([redfin.com](https://www.redfin.com/news/press-releases/redfin-reports-lower-mortgage-rates-trim-hundreds-off-monthly-payments-yet-homebuyers-are-still-cautious/?utm_source=openai)). New listings grew by just 1.3% year over year—the smallest increase since early spring—while active listings rose 10.8%, suggesting that seller caution is limiting inventory growth even as buyer affordability improves modestly ([redfin.com](https://www.redfin.com/news/press-releases/redfin-reports-lower-mortgage-rates-trim-hundreds-off-monthly-payments-yet-homebuyers-are-still-cautious/?utm_source=openai)).

Despite price gains, macro-level home-sales volumes remain subdued. Pending home sales, a leading indicator of closed transactions, are essentially flat compared to year-ago levels, reflecting both seasonal normalization and ongoing affordability challenges. According to Redfin, pending sales rose a mere 1.1% over the year, the smallest increase in two months, and show no sign of the rapid recovery that followed prior rate declines ([redfin.com](https://www.redfin.com/news/press-releases/redfin-reports-lower-mortgage-rates-trim-hundreds-off-monthly-payments-yet-homebuyers-are-still-cautious/?utm_source=openai)). Industry observers warn that unless inventory replenishes more robustly, especially in entry-level segments, overall transaction volumes may persist at multi-decade lows.

### Regional Market Performance and Price Growth

Regional disparities in price growth and sales activity remain pronounced, with some Midwest and Sun Belt metros exhibiting stronger resilience. The National Association of Realtors’ chief economist Lawrence Yun notes that places such as Cleveland and Chicago have seen modest upticks in contract signings, while West Palm Beach is among Florida markets showing renewed buyer interest despite insurance and hurricane-related concerns ([barrons.com](https://www.barrons.com/articles/home-sales-mortgage-rates-housing-market-295aafb4?utm_source=openai)). Yun projects that U.S. home sales could climb by 10% to 15% if mortgage rates fall further toward the 6% threshold, which would unlock affordability for an estimated six million additional households currently sidelined by borrowing costs ([barrons.com](https://www.barrons.com/articles/home-sales-mortgage-rates-housing-market-295aafb4?utm_source=openai)).

Redfin’s monthly press release confirms a broader uptick in price momentum: seasonally adjusted home prices rose 0.5% in September—the fastest monthly pace since April—and year-over-year gains eased to 6%, the smallest annual advance since December 2024 ([investors.redfin.com](https://investors.redfin.com/news-events/press-releases/detail/1196/redfin-reports-u-s-home-prices-grew-0-5-in-september-the?utm_source=openai)). This moderation, combined with selective regional strength, suggests that buyers facing less competition may find opportunities to lock in homes at relatively favorable valuations, provided they navigate local market nuances and insurance-cost dynamics.

### Residential REIT Performance and Rental Wealth

In the public markets, residential real estate investment trusts (REITs) delivered mixed returns during the week ended September 12. The Dow Jones US Apartment REIT index, a key benchmark for residential income assets, fell by 1.09%, underperforming industrial, healthcare, and self-storage REITs, which posted gains of 0.90% and 0.88% respectively ([spglobal.com](https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/9/reit-replay-reit-stocks-underperform-broader-market-during-week-ended-sept-12-92839050?kw=%25257bkeyword%25257d%3Fkw%3D%25257bkeyword%25257d%3Fkw%3D%25257bkeyword%25257d%3Fkw%3D%25257bkeyword%25257d&utm_source=openai)). The broader Dow Jones Equity All REIT index inched up 0.30%, lagging the S&P 500’s 1.59% advance, reflecting investor caution amid expectations of moderate economic growth and potential Fed easing ([spglobal.com](https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/9/reit-replay-reit-stocks-underperform-broader-market-during-week-ended-sept-12-92839050?kw=%25257bkeyword%25257d%3Fkw%3D%25257bkeyword%25257d%3Fkw%3D%25257bkeyword%25257d%3Fkw%3D%25257bkeyword%25257d&utm_source=openai)).

Apartment REITs have been pressured by slowing rent-growth expectations and concerns over near-term occupancy trends, even as longer-term demographics support sustained rental demand. Current dividend yields on leading apartment REITs remain above 4%, offering attractive income streams for investors focused on long-term wealth preservation and inflation hedging. Analysts highlight that single-family rental REITs, like Invitation Homes Inc., may benefit from strong suburban demand, though they too saw modest share-price declines in early September.

### Implications for Long-Term Wealth Building

The current market environment presents a nuanced landscape for building long-term wealth through residential real estate. Lower mortgage rates and more favorable price growth trajectories can enhance entry opportunities for owner-occupiers and investors seeking to buy rental properties. Refinancing activity, up nearly 58% from a year ago, offers existing homeowners a chance to reduce monthly payments and redirect savings toward home improvements or additional property acquisitions ([reuters.com](https://www.reuters.com/business/us-30-year-mortgage-rate-drops-refinances-jump-mba-data-shows-2025-09-17/?utm_source=openai)).

For buy-and-hold investors, elevated home prices and tight inventory underscore the importance of thorough market selection and due diligence. Metros with diversified economies and stable population growth—such as Cleveland, Denver, and Columbus—may offer more resilient appreciation and rental demand over time. Meanwhile, exposure to residential REITs can provide portfolio diversification and liquidity, with current yields potentially outpacing traditional fixed-income investments in a low-growth, moderate-inflation scenario.

In the medium term, continued Federal Reserve easing is expected to support mortgage rate declines, potentially pushing the 30-year rate toward 6%. This would align with Lawrence Yun’s threshold for a meaningful sales rebound and could catalyze broader market activity, benefiting both homebuyers and rental investors ([barrons.com](https://www.barrons.com/articles/home-sales-mortgage-rates-housing-market-295aafb4?utm_source=openai)). However, investors should remain vigilant regarding regional regulatory risks, insurance-cost inflation in disaster-prone areas, and the evolving remote-work landscape, which continue to reshape demand patterns.

Overall, the week of September 15–21, 2025, reinforced key themes in U.S. residential real estate: modestly easing borrowing costs, persistent home-price gains, selective regional strength, and cautious but growing investor interest in rental housing assets. For those focused on long-term wealth building, opportunities exist across owner-occupied homes, rental portfolios, and residential REITs, provided strategies are tailored to evolving market dynamics and individual risk tolerances.

Wealth Building Through Real Estate