Wealth Building Through Real Estate

## Mortgage Rates & Financing Conditions

Mortgage rates saw mixed movements during the week of September 22–28, 2025, remaining elevated by historical standards but near recent lows. According to Freddie Mac’s Primary Mortgage Market Survey, the average 30-year fixed mortgage rate edged up 4 basis points to 6.30% as of September 25, 2025, following markets’ reaction to the Federal Reserve’s guidance on future rate cuts and data dependency ([realtor.com](https://www.realtor.com/research/freddie-mac-mortgage-rates-september-25-2025/?utm_source=openai)). However, broader capital-market data indicate the average 30-year rate had fallen to 6.26% by September 18, marking the eighth consecutive weekly decline and reflecting ongoing easing since the Fed’s first rate cut in December 2024 ([nmbnow.com](https://nmbnow.com/capital-market-update-for-september-22-2025/?utm_source=openai)). While the slight uptick at week’s end underscores persistent volatility tied to Fed communications, rates remain near 11-month lows, offering potential refinancing and purchase opportunities for long-term investors.

## Home Sales, Prices & Inventory

Data published during this week show U.S. existing home sales remained subdued in August, with a seasonally adjusted annual rate of 4.00 million units—down 0.2% from July and the slowest pace since June—despite a late-summer slide in borrowing costs ([apnews.com](https://apnews.com/article/791674c172aa60f7ea4e0ee2a720e75e?utm_source=openai)). The national median existing-home price rose 2.0% year-over-year to $422,600, marking a record high for August and the 26th consecutive annual price increase ([apnews.com](https://apnews.com/article/791674c172aa60f7ea4e0ee2a720e75e?utm_source=openai)). Inventory of unsold homes ticked up slightly to 1.53 million units, equivalent to a 4.6-month supply at the current sales pace, still below the long-run balance threshold and indicating ongoing structural tightness ([apnews.com](https://apnews.com/article/791674c172aa60f7ea4e0ee2a720e75e?utm_source=openai)).

## New Construction & Builder Sentiment

Builders’ responses to affordability challenges were evident in weaker housing-start figures and widespread incentives. In August, total housing starts fell 8.5% to an annualized 1.31 million units, driven by a 7.0% drop in single-family starts; multifamily starts also declined by 11.7% ([mckissock.com](https://www.mckissock.com/blog/appraisal/september-2025-housing-market-updates/?utm_source=openai)). Inventory of newly completed homes stood at 124,000 units—four times the 2022 low but still limited relative to long-term averages—while total unsold new homes tightened to 490,000 units (7.4 months’ supply) ([mckissock.com](https://www.mckissock.com/blog/appraisal/september-2025-housing-market-updates/?utm_source=openai)). Builder confidence, as measured by the NAHB/Wells Fargo Housing Market Index, held at 32 in September, with future sales expectations climbing to 45—a six-month high—underscoring builders’ cautious optimism amid competitive price cuts (averaging 5% among 39% of builders) and incentives used in 65% of transactions ([mckissock.com](https://www.mckissock.com/blog/appraisal/september-2025-housing-market-updates/?utm_source=openai)).

## Regional Divergence

Residential activity diverged across U.S. regions in August. The Midwest and West posted modest gains in existing home sales, benefiting from relatively more affordable prices, whereas the Northeast and South saw declines amid persistent cost pressures ([reuters.com](https://www.reuters.com/world/us/us-existing-home-sales-dip-august-2025-09-25/?utm_source=openai)). First-time buyers represented only 28% of existing-home purchasers, up slightly year-over-year but still below pre-pandemic norms, highlighting the challenge of entry-level affordability ([reuters.com](https://www.reuters.com/world/us/us-existing-home-sales-dip-august-2025-09-25/?utm_source=openai)). Investor-share activity rose to 21% of existing home sales, indicating increased confidence among portfolio buyers seeking long-term rental yields, even as all-cash transactions eased to 28% ([reuters.com](https://www.reuters.com/world/us/us-existing-home-sales-dip-august-2025-09-25/?utm_source=openai)).

## Rental Market Snapshot

The single-family rental market displayed signs of cooling rent growth, with annual increases slowing below long-run averages. Cotality’s Single-Family Rent Index reported July 2025 rent growth of 2.3% year-over-year—down from 3.1% a year earlier—which marks the first significant deceleration since early 2024 ([cotality.com](https://www.cotality.com/press-releases/single-family-rents-weak-july-2025?utm_source=openai)). Meanwhile, apartment rents saw minor month-over-month declines in September across small and large cities, with RentCafé noting 59% of small cities and 56% of large cities registering rent dips; in Provo, Utah, rents fell by 2.2%, and North Charleston, SC, by 1.5% ([housingwire.com](https://www.housingwire.com/articles/rentcafe-average-u-s-rent-declines-for-first-time-in-2-years/?utm_source=openai)). Slower rent growth and rising vacancy rates—single-family vacancies hit 6.3% in Q1 2025, the highest since 2016—offer modest relief for renters but underscore the importance of strategic pricing and property upgrades for buy-and-hold investors ([rentometer.com](https://www.rentometer.com/rentometer-mid-year-report-2025-national-trends-in-single-family-rental-markets?utm_source=openai)).

## Residential REIT Performance

Real estate investment trusts (REITs) remained sensitive to interest-rate fluctuations and broader equity markets. The Vanguard Real Estate ETF (VNQ) closed at $91.67 on September 22, 2025, before sliding to $90.13 by September 25—a weekly decline of 1.64% as investors weighed rate outlooks and Fed policy statements ([stockanalysis.com](https://stockanalysis.com/etf/vnq/history/?utm_source=openai)). VNQ declared a quarterly dividend of $0.8716 per share on September 23, payable September 26, which underscores REITs’ continued role for income-seeking investors, despite near-term price volatility ([gurufocus.com](https://www.gurufocus.com/news/3117748/vanguard-reit-etf-vnq-declares-dividend-of-08716?utm_source=openai)). Among pure-play residential REITs, Invitation Homes (INVH) saw its stock decline 1.62% to $29.21 on September 24, underperforming the broader market amid an FTC inquiry into its leasing practices and “junk fees” allegations—factors warranting close monitoring by income-focused investors ([marketwatch.com](https://www.marketwatch.com/data-news/invitation-homes-inc-stock-underperforms-wednesday-when-compared-to-competitors-ad8e42bb-3308813b5103?utm_source=openai)).

## Outlook for Long-Term Wealth Accumulation

Despite short-term headwinds, long-term residential real estate remains a proven wealth-building asset. Historical data from the S&P CoreLogic Case-Shiller U.S. National Home Price Index show annual price gains averaging 3.4%–4.1% in early 2025, with the 10-City Composite returning 4.8% in March and the 20-City Composite 4.1% ([spglobal.com](https://www.spglobal.com/spdji/en/index-announcements/article/sp-corelogic-case-shiller-index-records-34-annual-gain-in-march-2025/?utm_source=openai)). Over multi-decadal horizons, residential real estate has delivered nominal returns of roughly 5%–7% annually, plus the potential for leverage-enhanced equity growth and tax benefits such as mortgage interest deductions and depreciation (where applicable) ([businessinsider.com](https://www.businessinsider.com/housing-market-mortgage-rates-home-sales-prediction-fannie-mae-outlook-2025-9?utm_source=openai)).

Fannie Mae projects that as mortgage rates moderate further—forecast to average 5.9% by end-2026, the lowest since 2022—home sales could rebound substantially, with existing home sales rising 9.6% and new home sales 6.9% year-over-year in 2026; this underscores periods of affordability relief as attractive entry points for long-term investors ([businessinsider.com](https://www.businessinsider.com/housing-market-mortgage-rates-home-sales-prediction-fannie-mae-outlook-2025-9?utm_source=openai)). By focusing on markets with strong employment growth, favorable demographics, and limited new-supply pipelines, investors can position portfolios for both capital appreciation and stable rental cash flows, benefiting from a diversified approach across owned homes and REITs to optimize risk-adjusted returns over time.