Wealth Building Through Real Estate

## Mortgage Rate Trends in Mid-October 2025
The 30-year fixed mortgage rate dipped slightly to an average of 6.27% in the week ending October 17, down from 6.30% the previous week, while the 15-year fixed rate fell to 5.52%. This modest decline comes amid expectations of further Federal Reserve rate cuts to support slowing inflation and employment concerns. The 10-year Treasury yield, a key driver of mortgage rates, slipped to about 4.02%. Despite these improvements, borrowing costs remain elevated compared with pre-2022 norms, constraining many prospective buyers and dampening refinancing activity—total mortgage applications fell 1.8% last week even as adjustable-rate mortgages gained share, accounting for 9.3% of new applications. ([apnews.com](https://apnews.com/article/c30936bfb9ab1eb0823f7b28e92807ad?utm_source=openai))

## National Weekly Housing-Market Snapshot (Four Weeks Ending October 12, 2025)
- Median sale price: $389,750, up 1.9% year-over-year—the largest gain in over six months outside late September.
- Median asking price: $399,947, rising 2.3% year-over-year.
- New listings: 89,756, up 4.1% year-over-year, marking the biggest annual increase in over four months.
- Pending sales: 78,677, down 1.2% year-over-year, the sharpest decline in five months.
- Active listings: 1,205,710, up 7.5% year-over-year, the smallest rise since February 2024.
- Months’ supply of inventory: 4.5, up 0.3 points—within the 4–5-month “balanced market” range, but trending toward better buyer choice.
- Share of homes off market in two weeks: 30.8%, down from 33% a year ago.

These data reflect a market in gradual rebalancing: more sellers are testing the waters due to slightly improved affordability, but persistent price resistance and economic jitters keep many buyers on the sidelines, lengthening the typical time on market to 48 days—a week longer than last year. ([redfin.com](https://www.redfin.com/news/housing-market-update-new-listings-rise-pending-sales-fall-october-2025/?utm_source=openai))

## Affordability Improvement and Mortgage Monitor Highlights
According to the October 2025 Mortgage Monitor, with 30-year rates averaging 6.26% in mid-September, the principal and interest payment on an average-priced home dropped to $2,148 per month, or 30% of median U.S. household income—the best affordability level since early 2023. Although still above the long-run average of 25%–26%, this marks a meaningful improvement from 32% earlier this summer and a peak of 35% in late 2023. Home-price growth firmed to +1.2% in September after eight months of deceleration, driven by tightening inventory and these modest cost reductions. However, coastal markets such as Los Angeles remain outliers, requiring over 60% of median income to carry a mortgage payment on an average-priced home. ([mortgagetech.ice.com](https://mortgagetech.ice.com/resources/data-reports/october-2025-mortgage-monitor?utm_source=openai))

## Home Equity and Wealth Accumulation Through Real Estate
Homeowners continue to benefit from significant equity gains. As of late 2024, household equity in residential real estate reached a record-high $35 trillion, creating a stark median net-worth gap between homeowners ($415,000) and renters ($10,000). This wealth accumulation underscores real estate’s role as a primary vehicle for long-term personal finance growth. Nearly one-third of repeat buyers now leverage home equity to fund their next purchase, reflecting the “lock-in effect” where existing homeowners—often with sub-6% mortgages—use accumulated value to transition into larger or more desirable properties. ([nar.realtor](https://www.nar.realtor/newsroom/nar-chief-economist-lawrence-yun-forecasts-9-percent-increase-in-home-sales-for-2025-and-13-percent-for-2026))

## NAR 2025–2026 Outlook: Continued Price Gains and Sales Recovery
At December’s NAR Real Estate Forecast Summit, economists projected:
- Existing-home sales: +7% to +12% in 2025; +10% to +15% in 2026.
- New-home sales: +11% in 2025; +8% in 2026.
- Median existing-home price: +2% in 2025 (to $410,700); +2% in 2026 (to $420,000).
- Mortgage rates: stabilizing near 6% through 2025 and 2026.
- Job gains: near 2 million net new positions each year.

These forecasts presume continued inventory gains—listings are up roughly 20% year-over-year in October—and moderating but still positive price growth. A more balanced market, combined with stable rates and job growth, should unlock additional affordability for roughly 6.2 million prospective buyers if 30-year rates fall to the mid-6% range. ([nar.realtor](https://www.nar.realtor/magazine/real-estate-news/more-home-buyers-expect-rosier-2025-housing-outlook))

## Regional Highlight: San Diego Metro (Week of October 12–18, 2025)
San Diego homebuyers enjoyed the most favorable purchasing conditions of the year during October 12–18. Listing prices were 6.5% below the seasonal peak, while active inventory climbed 17.7% above the average for the period. These trends, driven by typical autumn price adjustments and seller incentives, delivered enhanced buyer power and selection. Industry analysts note similar optimal windows in other high-demand metros such as Houston and Denver. ([axios.com](https://www.axios.com/local/san-diego/2025/10/14/best-time-buy-san-diego-home-october?utm_source=openai))

## Regional Highlight: Kansas City Metro (October 2025)
- Existing-home sales: 4.00 million SAAR in September, virtually unchanged month-over-month (–0.2%) but up 1.8% year-over-year—driven by the Midwest’s relative affordability (typical home price ~22% below national median).
- Median sales price (existing): $300,500, up 1.9% from a year earlier.
- Inventory: +10.6% year-over-year for existing homes (4.6-month supply at current sales pace); new-construction supply nearly flat.
- Days on market: +10.0% year-over-year for existing homes.

Rapid population expansion (+8.9% from 2014–2024) and housing-unit growth (+10.6%) have kept KC’s market fluid, though high mortgage rates continue to test affordability for first-time buyers. Home prices are beginning to plateau in some submarkets, giving local buyers a modest negotiating edge. ([soldbylong.com](https://soldbylong.com/october-2025-kansas-city-housing-market-update/?utm_source=openai))

## Building Long-Term Wealth Through Residential Real Estate
Residential real estate remains a cornerstone of long-term wealth strategies due to:
- Leverage: Mortgages allow investors to control appreciating assets with modest equity outlays.
- Price appreciation: Even modest 2%–3% annual real gains compound significantly over decades.
- Equity growth: Principal reduction and rising home values build non-taxable equity that can be tapped for investment or retirement.
- Income potential: Rentals, short-term leasing, and accessory dwelling units provide ongoing cash flow.
- Diversification: Real estate often exhibits lower correlation with stocks and bonds, offering portfolio stability.

Current market dynamics—moderate price growth, improving affordability, and record household equity—reinforce the value of early entry. Prospective buyers and investors should target metros with balanced supply/demand profiles, positive job and population trends, and opportunities for incremental value creation through renovations or income-generating property structures. ([nar.realtor](https://www.nar.realtor/newsroom/nar-chief-economist-lawrence-yun-forecasts-9-percent-increase-in-home-sales-for-2025-and-13-percent-for-2026?utm_source=openai))

## Conclusion and Investor Considerations
During the week of October 13–19, 2025, gradual declines in mortgage rates and elevated home-equity levels painted a cautiously optimistic picture for U.S. residential real estate. While price resistance and elevated borrowing costs persist, improved supply and stabilizing rates set the stage for a more accessible market—particularly in select metros like San Diego and Kansas City. For long-term investors and homebuyers, the window of opportunity lies in locking in financing at sub-6.5% rates, focusing on markets with supportive economic fundamentals, and leveraging real estate’s historical track record of wealth accumulation through equity growth and income generation.