Wealth Building Through Real Estate

**Mortgage Rate Movements**
The U.S. housing market saw a modest reprieve in borrowing costs during the week ending December 4, 2025, as Freddie Mac’s Primary Mortgage Market Survey reported the average rate on a 30-year fixed-rate mortgage (FRM) fell to 6.19%, down from 6.23% the prior week and its lowest level since late October 2025. The 15-year FRM likewise declined to 5.44% from 5.51% a week earlier, marking the second consecutive week of declines and offering borrowers a slight lift in purchasing power compared both to recent weeks and to the 6.69% 30-year average a year ago ([nasdaq.com](https://www.nasdaq.com/press-release/mortgage-rates-move-down-2025-12-04?utm_source=openai)). Despite these gains, affordability remains a challenge: elevated home prices have offset much of the benefit from rate relief, keeping monthly payments near multi-year highs ([apnews.com](https://apnews.com/article/f400f31b011a071d3545b06d5ce4c6a1?utm_source=openai)).

**Federal Reserve Policy Outlook**
Market expectations have coalesced around a 25 basis point rate cut by the Federal Reserve at its December 9–10 meeting, a view held by 82% of economists polled by Reuters between November 28 and December 4, 2025. Those surveyed cited the need to support a cooling labor market and to follow up on an October easing, even as some Fed officials remain wary of persistent inflation above the 2% target ([reuters.com](https://www.reuters.com/business/economists-double-down-december-fed-cut-despite-policymaker-divide-2025-12-04/?utm_source=openai)). Major Wall Street strategists have revised their forecasts accordingly: Morgan Stanley, after initially predicting no change, now sees a quarter-point cut in December and further reductions into 2026, driving an 87.2% probability of a Fed move into year-end ([reuters.com](https://www.reuters.com/business/jumped-gun-says-morgan-stanley-reverses-dec-fed-rate-call-25bps-cut-2025-12-05/?utm_source=openai)). With bond yields and monetary policy turning more accommodative, mortgage rates are poised for further modest declines, underpinning housing demand into early 2026.

**Supply and Turnover Trends**
Homeowner behavior remains a key driver of inventory dynamics. A recent Redfin analysis through September 2025 shows just 2.8% of U.S. homes changed hands year-to-date— the lowest annual turnover rate in at least three decades. In markets like San Diego, turnover was even more muted at 1.6%, as homeowners cling to low mortgage rates secured in prior years and potential sellers hesitate amid affordability uncertainties ([axios.com](https://www.axios.com/local/san-diego/2025/12/01/housing-turnover-san-diego-2025-mortgage-rates-redfin-report?utm_source=openai)). This “lock-in” effect shrinks for-sale supply, reducing competition and supporting price appreciation, but also constrains purchase opportunities for prospective buyers and dampens market liquidity over the long run.

**2026 Housing Market Forecasts**
Looking ahead, economists foresee a gradual thaw in housing dynamics in 2026. Redfin’s “Great Housing Reset” predicts a flattening of home-price growth to approximately 1%, against steady wage gains near 4%, which would marginally improve real affordability. The 30-year FRM is expected to average about 6.3%, sparking a refinancing wave as homeowners seek to lower costs. Home-sale volumes may tick up to roughly 4.2 million transactions, up from near 4.0 million in 2025, yet first-time and younger buyers are likely to remain constrained, with many opting for shared living arrangements or postponing purchases altogether. Artificial intelligence tools are also projected to play a growing role in property searches, further reshaping the home-buying process ([businessinsider.com](https://www.businessinsider.com/housing-market-2026-outlook-mortgage-rates-prices-buying-a-home-2025-12?utm_source=openai)).

**Zillow’s 2026 Outlook**
Echoing these trends, Zillow economists on December 4 forecast a modest 1.2% rise in national home values next year, a notable improvement from near-flat performance in 2025. They project existing-home sales of about 4.26 million—a 4.3% increase over 2025—driven by slightly eased borrowing costs and pent-up demand. On the rental side, multifamily rents are expected to stabilize, rising just 0.3%, offering renters modest relief and potentially nudging some toward ownership as the market warms ([investors.zillowgroup.com](https://investors.zillowgroup.com/investors/news-and-events/news/news-details/2025/Zillow-economists-say-the-housing-market-will-warm-up-in-2026-with-more-sales-and-modest-price-growth/default.aspx?utm_source=openai)). These moderate gains underscore the resilience of real‐estate wealth accumulation even amid tighter affordability.

**Regional Spotlights**
Geography will matter more than ever in 2026. Fairfield County, Connecticut—adjacent to New York City—is forecast by Redfin to rank among the nation’s hottest markets, with home prices poised to climb 6.9% next year on returning commuter demand and suburban desirability. Stamford’s median price already exceeds $710,000, and listings there are seeing renewed bidding war activity ([ctinsider.com](https://www.ctinsider.com/business/article/fairfield-county-ct-redfin-housing-forecast-21220482.php?utm_source=openai)). Conversely, markets once fueled by pandemic-era relocations to Texas and Florida are expected to cool: San Antonio and Austin may see price and sales declines as remote work reversals and rising insurance costs weigh on prospects, potentially offering value opportunities for long-term investors ([mysanantonio.com](https://www.mysanantonio.com/realestate/article/austin-housing-market-21218322.php?utm_source=openai)).

**Data Transparency and Climate Risk**
Information flows are shifting too. On December 1, Zillow removed in‐site climate risk scores—designed to flag flood, wildfire, and heat hazards—from its listings after objections by multiple listing services over data verifiability. While Zillow now redirects users to First Street Foundation’s external site for risk details, the change highlights tensions between comprehensive disclosure and market sensitivities. Critics warn that reduced on-platform risk visibility may leave buyers underinformed about long-term asset exposure, a key consideration for wealth preservation in climate-vulnerable regions ([theguardian.com](https://www.theguardian.com/environment/2025/dec/01/zillow-removes-climate-risk-data-home-listings?utm_source=openai)).

**Implications for Long-Term Wealth**
Together, these developments paint a nuanced picture for real estate investors aiming to build lasting equity. Lower, but still elevated, mortgage rates extend purchasing power; limited supply and low turnover sustain price momentum; and targeted regional plays offer both growth and value propositions. Meanwhile, reliable data—on market fundamentals, climate risks, and policy shifts—will be critical for informed decision-making. For long-term wealth accumulation, the coming year appears poised to deliver measured appreciation against a backdrop of steady demand, moderate financing costs, and evolving market transparency.