#119: The 2026 Real Estate Report: An Investor’s Unfiltered Take

Hey all, it’s MMV.

If you’ve been looking at your brokerage accounts lately, you probably noticed that the account looks different every time. My portfolio looks VERY different than it did in the beginning of 2026 for several reasons:

All these factors - geopolitical impacts, AI disruption, softening labor market, tariffs, and sticky inflation - might have you consider whether the stock market is the right place to be putting money into right now.

And if not the stock market, is real estate the asset class to invest in?

The honest answer is that it’s complicated, but I’ll start with the macro perspective and then get into what I’m experiencing as a real estate investor.

💰 A typical U.S. family needs annual income of $145,000 to thrive, study finds. About half fall short.
About 49% of Americans live below this financial threshold.

🏡 More homes went under contract last month, but higher mortgage rates could undo that progress
Mortgage rates hit 3.5 year low but with Iran conflict, mortgage rates can go up which will hurt home affordability.

🏦 Expectations for the next Fed rate cut get pushed back after hot inflation report
Wholesale inflation numbers for February were higher than expected so traders assume the Federal Reserve WON’T be lowering rates at all this year.

The U.S. real estate market feels like it’s been frozen for a few years now.

As an investor who is very observant on the market, I’m observing that real estate is not crashing, but it’s not thriving either. Ever since its highs in 2021-2022, it dipped and I feel like it’s stayed there.

The National Association of Realtor’s (NAR) most recent data shows 4.09 million existing home sales in February 2026, at a median price of $398,000, with just 3.8 months of supply.

Redfin reported that homes are sitting on the market for an average of 66 days (nine days longer than a year ago).

After nearly doubling in value over the last decade, U.S. home prices are now expected to stall at 0% growth nationally in 2026, according to J.P. Morgan Global Research.

Based on the recently published data, the NAR describes the housing market as “the most balanced it’s been in almost a decade,” with sellers having to be more flexible and buyers gaining some leeway in deals and affordability.

So with this “balanced” market, the almost frozen home values, fears of inflation re-igniting, and potential rate cuts, is it time to focus on real estate again?

I’m going to share the bull and bear cases for investing in real estate as well as my personal take and what I plan to do.

This is the strongest reason why I’m bullish on real estate.

This is the reality with high home prices and 6%+ mortgage rates is that a lot of would-be homebuyers are priced out of homeownership for the foreseeable future. Therefore, these would-be buyers are renting.

This sustained rental demand is the single strongest argument for owning residential investment property in 2026, particularly single-family rentals.

According to Experian’s 2025 State of the Rental Housing Market report, the length of time renters stay renters is increasing.

Major metros are experiencing an oversupply problem of apartments, but a well-located single-family rentals isn’t. These are two completely different markets.

Even in the DC market, there are a lot of vacant apartments for rent, but single-family rentals (or in DC, row houses), are limited and they get off the market quick because apartment renters and single-family renters are very different.

Right now, I’m house shopping as a renter and I’m not even considering apartments, but I’ve seen offers from apartments like one-month free and very low security deposits required. Still, it’s just not for me and my wife and I’m assuming many other people, especially families.

Short-term rentals exploded during 2021-2023. It was easy because everyone was traveling domestically due to COVID and remote work so anyone could just furnish a place with minimal furniture and make money.

Eventually, markets became oversaturated with short-term rentals with inflation hurting bank accounts, travel demand slowing, and competition amongst existing supply. This forced investors to lower prices to get bookings which hurt profitability.

The short-term rental market is experiencing a shift with less sophisticated investors selling/leaving and more sophisticated investors surviving the over-saturation shakeout. The short-term rental market is evolving to a more mature one with the best rentals staying booked and the “average” vacation rentals experiencing lower revenue.

You can’t just buy a house and furnish it to make money. To actually be profitable, it often requires major renovation to create an experience and theme while maximizing the use of every space available to force up the nightly rate.

To be successful in the short-term rental market, investors need to take it to the next level. Investors are buying/creating boutique hotels or camping compounds and operating them as operators. This is so they can focus on guest experience and have complete ownership of their own marketing via off platforms like Airbnb and VRBO.

The good news is that investors don’t have to worry as much about NEW entrants because it’s just not like 2021-2022 where everyone was creating an Airbnb listing. It’s more expensive to get involved and the ones who were doing it for a quick buck are disappearing and the ones who cannot adapt are losing money.

AirDNA called 2026 the best year to invest in short-term rentals since 2021 because of improving conditions for investors. Their report points to cooling home prices, steadier revenue trends, slower listing growth, and stronger average daily rate growth as the main reasons conditions have improved.

The vacation rental market’s long-term trajectory is still up. The demand for vacation rentals is intact as people will always travel and need accommodations, even before Airbnb was created.

Institutional investors have been net sellers of existing single-family homes for six consecutive quarters, redeploying into build-to-rent communities at scale according to research from Parcl Labs.

At the end of 2025, 91% of investor-owned homes were held by small landlords with 10 properties or fewer. Rental properties have always been a small operator’s game and with institutional investors leaving, it’s getting less crowded.

Not only are they selling single-family homes, but they’re also going to be banned (temporarily) thanks to the housing bill that passed the Senate. This is a direct ban on large institutional investors purchasing single-family homes. The bill does have exceptions for institutional buyers like they can buy distressed homes and can build-to-rent.

This gives small operators an advantage to better manage rehab and monitor expenses to improve cash flow more efficiently.

This is the banking tool I use for my entire real estate portfolio. It has built-in bookkeeping, tax form generation, and cash flow analytics.

If you sign up using my link, I’ll help you get set up.