Wealth Building Through Real Estate

**Mortgage Rate Movements and Affordability**
Mortgage borrowing costs continued to edge lower over the past week, offering a modest boost to housing affordability. According to the Federal Reserve Bank of St. Louis, the average 30-year fixed-rate mortgage (FRM) fell to 6.17% for the week ending October 30, 2025, down from 6.27% the week prior ([fred.stlouisfed.org](https://fred.stlouisfed.org/series/MORTGAGE30US?utm_source=openai)). Industry surveys corroborate this trend: as of October 23, daily measures showed the 30-year FRM at its lowest in over a year, averaging 6.19% and occasionally dipping to 6.17% in some lender panels ([marketwatch.com](https://www.marketwatch.com/story/mortgage-rates-drop-to-the-lowest-level-in-a-year-opening-an-important-window-for-buyers-663868f3?utm_source=openai)). Lower rates have translated into rising purchase applications and a slight uptick in buyer confidence, even as many prospective purchasers remain cautious given still-elevated financing costs relative to pre-pandemic norms.

**Supply Trends: Listings, Inventory, Prices**
Supply-side conditions reflect a market still adjusting to slower demand and higher rates. Realtor.com’s weekly survey for the week ending October 25 reports roughly 1.1 million homes actively for sale, a 14.6% year-over-year increase and marking the 103rd consecutive week of annual gains in active inventory ([calculatedriskblog.com](https://www.calculatedriskblog.com/2025/10/realtorcom-reports-median-listing-price_01315239382.html)). New listings rose 5.9% compared with the same period last year, the third straight week of accelerating new-listing growth ([calculatedriskblog.com](https://www.calculatedriskblog.com/2025/10/realtorcom-reports-median-listing-price_01315239382.html)). Despite the growing pool of options, the median listing price remained flat year-over-year, while price per square foot declined 0.8% for the eighth consecutive week, signaling that sellers may be moderating price expectations to attract buyers ([calculatedriskblog.com](https://www.calculatedriskblog.com/2025/10/realtorcom-reports-median-listing-price_01315239382.html)). Elevated inventory and lengthening time-on-market—now nearly matching pre-pandemic averages—are creating more negotiating leverage for well-qualified buyers.

**Sales Performance: Existing Home Sales, Prices, Supply**
On the sales front, existing-home transactions showed modest improvement in September. The National Association of Realtors (NAR) reported a 1.5% month-over-month increase to a seasonally adjusted annual rate of 4.06 million units—the highest pace since February—while year-over-year sales rose 4.1% ([nar.realtor](https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-1-5-increase-in-september?utm_source=openai)). Regionally, sales climbed in the Northeast, South, and West but dipped in the Midwest. The median existing-home price reached $415,200, up 2.1% from a year ago and marking the 27th consecutive month of price appreciation ([nar.realtor](https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-1-5-increase-in-september?utm_source=openai)). Inventory of unsold homes was 1.55 million units, up 14.0% year-over-year, equating to a 4.6-month supply—still below the five-to-six-month balanced market benchmark but the highest level in five years ([nar.realtor](https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-1-5-increase-in-september?utm_source=openai)). Slowing but not stalling sales and rising supply suggest that market activity is shifting from a seller’s market toward more balanced conditions.

**Rental Market Dynamics**
While for-sale housing faces headwinds, the rental segment continues to carry robust fundamentals. Realtor.com’s October Rental Report shows median asking rents dipped by $14, or 0.8%, to $1,720 month-over-year, marking the fifteenth consecutive month of rent declines for 0–2 bedroom units ([prnewswire.com](https://www.prnewswire.com/news-releases/realtorcom-october-rental-report-rents-fall-again-with-more-new-units-expected-in-2025-302313765.html?utm_source=openai)). Rental stock expansion is driving these declines: the South leads with an 8.9% increase in units since before the pandemic, followed by the West (8.6%), Northeast (5.0%), and Midwest (1.7%) ([prnewswire.com](https://www.prnewswire.com/news-releases/realtorcom-october-rental-report-rents-fall-again-with-more-new-units-expected-in-2025-302313765.html?utm_source=openai)). The softer rental market presents opportunities for investors targeting long-term wealth via buy-to-rent strategies, particularly in high-growth Sun Belt metros where supply constraints and job gains may limit rent erosion.

**Equity and Wealth Building: Home Equity Trends**
Homeownership remains a cornerstone for building household net worth. According to ATTOM’s latest U.S. Home Equity & Underwater Report, 46.1% of mortgaged homes were equity-rich (loan balances no more than half of market value) in Q3 2025, down from 47.4% in Q2, even as national median prices hit a record $370,000 ([attomdata.com](https://www.attomdata.com/news/market-trends/home-sales-prices/q3-2025-home-equity-and-underwater-report/?utm_source=openai)). Meanwhile, the share of seriously underwater homes (loan balances at least 25% above value) ticked up to 2.8% from 2.7% in the prior quarter ([attomdata.com](https://www.attomdata.com/news/market-trends/home-sales-prices/q3-2025-home-equity-and-underwater-report/?utm_source=openai)). These metrics indicate that while many homeowners have substantial equity cushions—an asset likely to appreciate over time—some markets are experiencing more modest wealth gains. Equity accumulation through principal pay-down and price appreciation remains one of the most reliable paths to long-term wealth, underscoring the importance of patience and strategic entry timing.

**Builder Sentiment and New Construction**
New-home construction sentiment offers a forward-looking gauge of housing supply. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) climbed to 37 in October, up five points from September and its highest reading since April, though still below the neutral 50 threshold for the 18th consecutive month ([nahb.org](https://www.nahb.org/news-and-economics/press-releases/2025/10/amid-market-challenges-builder-expectations-rise-in-october?utm_source=openai)). Builders cited recent declines in mortgage rates—averaging near 6.3%—as supportive of future sales, even as they continue to offer incentives such as price cuts (38% of builders reported discounting) to spur demand ([nahb.org](https://www.nahb.org/news-and-economics/press-releases/2025/10/amid-market-challenges-builder-expectations-rise-in-october?utm_source=openai)). Improved builder confidence may presage modest increases in starts and completions for single-family homes in coming quarters, helping to alleviate supply shortfalls over the medium term.

**Implications for Long-Term Wealth via Real Estate**
The combination of moderating mortgage rates, rising inventory, steady sales volumes, and robust equity levels suggests that the housing market is transitioning toward a more balanced environment. For long-term investors, this backdrop presents opportunities to acquire properties at fair valuations, capitalize on rent growth in areas with persistent demand, and build equity over time as market conditions normalize. Key strategies include focusing on markets with strong job and population growth, targeting properties with value-add potential (renovations, rental upgrades), and maintaining discipline around financing costs to optimize cash flow and equity accumulation. While short-term volatility may persist, the historical resilience of real estate as an asset class reinforces its role in diversified wealth-building portfolios.

**Citations**
turn3search2: 30-year FRM at 6.17% week ending Oct 30
turn3news14: Mortgage rates dropped to 6.19% on Oct 23
turn5view0: Realtor.com weekly trends as of Oct 25 (inventory, listings, prices)
turn4search0: NAR existing-home sales report Oct 23 (sales, prices, inventory)
turn1search0: Realtor.com October Rental Report (median rent, stock increases)
turn2search1 & turn2search3: ATTOM Q3 2025 home equity report (equity-rich, underwater)
turn7search0 & turn7news12: NAHB HMI at 37 in October (builder confidence, incentives)