Renters Will Crash The 2026 Housing Market

Today, I want to talk about five major shifts that are happening in the housing market today that you need to be aware of, whether you are a renter, a potential buyer, or a home seller, because it affects everyone. Doesn't matter what type of home you are looking for, guys, because anybody who's been interested in selling or wants to buy a house should know about these trends that have been emerging recently because it's going to have a major impact on you one way or the other. Let's talk about the first one and probably the most obvious one, which is that a lot of sellers are completely stuck. They just can't sell anymore. And it's a very tough time to sell your house right now because a lot of people can't afford it. A lot of buyers don't qualify. In fact, only about 25% of Americans can qualify to buy the median price home in America today, which explains the record low demand that we have. And now that inventory is back to pre-pandemic levels in most parts of the country. Sellers have a lot more competition than they have had in the past five years, and they're not just competing with other sellers, but they're also competing with home builders. Home builders have been ruthless in their price cuts, as well as their incentives and mortgage rate buy downs to get people into buying homes. And we also have a situation now where there are over 600,000 more sellers on the US housing market today than there are buyers. This is pretty much unprecedented, at least going back to the 2008 housing crash. And so a lot of sellers have been frustrated. You've seen a lot of sellers remove their listing off the market if they're not able to get the price they were hoping for. But the other thing that's been happening, it's been forcing a lot of sellers into becoming an accidental landlord. And as I'm talking about this, I'm going to do something a little bit different, guys. Something a few people requested and something I've been thinking about doing, which is just showing more of where I'm at in the neighborhood and things like that while I'm talking. Still giving you the walk and talk, but you guys can see what I see. So when a seller can't sell and get their price, what they're doing is they're renting it out instead. And typically sellers who are doing this are sellers that actually can make a profit on renting out their property. People who bought and got a good deal before prices and interest rates went insane. And if you're able to make $400, $500 or $1,000 a month profit renting your property out, it might not be a bad prospect. In fact, about 2.1% of sellers recently gave up and turned their homes into rentals. And it's especially happening in places like Tampa, Houston, Denver, Miami. And these people are being called accidental landlords for obvious reason. They're not investors. They're just regular homeowners saying, I'm not going to take a loss selling this property. I'll just wait. So let me go ahead and rent it out. And because of this, rental supply is actually surging across the country, not only from accidental landlords, but also from vacancies popping up because people can't afford a lot of these places anymore and households combining, people moving in with roommates, things like that. So that increases vacancy. Plus we have a record amount of inventory of brand new apartments that have been hitting the rental market over the past couple of years and are still hitting it now. This is causing a situation where rent growth is dropping severely. In fact, rent growth is only up 2.6% year over year, which is the smallest increase in over a decade. A lot of markets are already seeing rent declines as well. So this puts renters in a situation where they have more options and also puts additional pressure on the for sale housing market. Because if you think about it, if all of a sudden there's a surge in rentals happening, that creates rental prices coming down, right? And at the end of the day, for sale listings compete with rental listings and the lower rent prices go, the harder it is to make a convincing argument that, hey, maybe we should buy instead of rent. It gets harder and harder to convince people that's what you should be doing. The bigger that spread between the cost of rent and ownership becomes. And so that actually ends up putting more downward price pressure on home sellers as well, the lower that rents go. So this is actually a great thing for buyers and people hoping that they're going to be able to buy a house soon. Check out that tree. So this is leading to the third major shift that we're seeing in the housing market, which is that renters have more leverage than they have had in a very long time. And they're actually starting to steer the direction of this market. Because where renters decide to move and how much they're willing to pay and which rentals sit vacant ultimately determines the fate of the for sale market in the area. And the more choices these renters have and the lower rent prices go, guys, I am telling you, sellers are going to be devastated by this, that have been sitting on the market for a year plus at this point, or even just a few months and not getting any activities or offers. And too many sellers are just not realizing how unaffordable buying their home is today. You have to put yourself in the position of somebody renting who would be transitioning into buying and looking at what they would be paying for your house today. Not what you pay for it on your monthly payment, because you might've bought 10, 15 or 20 years ago, have a much lower payment. Even if you bought seven years ago, you have a much lower payment. So you can't go by what you're paying as a homeowner. You have to put yourself in the shoes of a buyer. And a buyer is somebody who's most likely renting right now, who's weighing their options. And there's basically no convincing argument to buy right now instead of rent, especially when the cost difference is so much lower to be a renter. Which leads me directly to my next point, number four, is that a lot of sellers are going to be stuck waiting for a very long time if they're going to be determined to get their listing price and they don't seem to be getting much activity within the first few weeks of listing. Because too many sellers are still stuck in the past or actually refuse to give up their potential sale price because in some cases they can't. We've talked about this before. Sometimes this is someone's whole nest egg or retirement fund and they need to get a certain price in order to make it worth it to sell. But the problem is at this point, the longer people wait, then the more unaffordable things become for buyers. Take a look around, guys. Nothing is getting cheaper. We're seeing massive increases in the cost of everything, especially with the war in Iran now and how much gas prices have gone up and how much that's bleeding into the rest of the economy. People's utility bills, insurance bills, and everything else that's mandatory that people have to pay for is rising much faster than incomes, which means people have less money to spend on a monthly house payment or rent payment. If you're a seller who is maybe doing okay right now and is looking at this like, well, maybe I will be okay for a little while, but I really got to get this house sold within the next six months or so, you got to start getting serious about the asking price and bring it to a point where someone can actually buy it. You could also become one of these accidental landlords, but that's easier said than done. A lot of people don't realize the amount of effort and headache it can be to become a landlord. People just see all this stuff on TV and hear about people making real estate investments and all of that and think that it's just an easy thing to do and it's just passive income. You just sit back and watch the checks roll in, but it really couldn't be further from the truth, guys. I've been a landlord. It is not that simple. It can be easier if you hire a property management company, but it is by no means just passive income. You just buy it and never think about it again. It doesn't work like that. And something that's definitely going to force more people to sell in the near future is the rising mortgage delinquencies, guys. The stress for people being able to afford their mortgage payments is continuing to increase month after month right now. It's not like it's just hitting renters who are considering whether or not to be a homeowner. It's also existing homeowners, okay? In fact, serious mortgage delinquencies are at their highest level since 2022. We have about 878,000 mortgages that are 90 plus days late right now or are already in foreclosure and that's up 25% just in the past four months. That's a tremendous increase, right? Is this at panic levels right now? No. We have like 10 million foreclosures hitting the market all at once back during the 2008 housing crisis, so it's not at crisis numbers. But the alarming part is just how fast these delinquencies are rising. And it's no surprise that people who have the lowest amount of equity are the ones who are getting hit the hardest and first. FHA borrowers are people that put lower down payments and don't have the greatest credit scores and essentially have no equity or could even be underwater with the equity of their home literally days after purchase depending on which direction their housing market is going. And they are at the top of the list for these defaults. But the problem is people who are falling behind are staying behind. They're not recovering and many of them are transitioning into the foreclosure phase. According to VantageScore, their data is showing that delinquencies at all stages of delinquencies are up and serious delinquencies are up 18% year over year. And the main drivers of these delinquencies are higher mortgage rates combined with rising insurance costs and overall household budget strain. So the overall household budget strain hits everybody from all walks of life, doesn't matter if you are a homeowner or a renter. Because another thing you got to remember is it's not just mortgage delinquencies that have been going up. We've also been seeing auto loan delinquencies rise, credit card delinquencies rise, student loan delinquencies rise. So I think one problem that a lot of sellers who are just taking the wait and see approach and thinking, well, maybe I'll just try later in the year or next year will be better. Things like that are not paying attention to these overall trends that are putting more and more downward pressure on rent prices and then inevitably home prices. And I'm not telling anybody you should panic or do anything drastic. I'm just letting people know that these are the trends. These are the data points. These are the facts that are driving the market right now. And all of this is going to have a downstream effect six to 12 months from now. And it's going to be a much different market than we're even in right now. Most likely, buyer demand is not going to make any sort of meaningful recovery. Even mortgage rates have been ticking up quite a bit over the past few weeks since the beginning of the war. And with all of these additional financial pressures closing in on folks, don't count on there being any sort of buyer demand recovery anytime soon. So do what you will with that information. Now we just talked about the delinquencies from mortgages going up. But did you know that Google searches for help with mortgage have surged to the highest level on record recently? And these are people who maybe haven't defaulted yet, right? Once you've already defaulted, it's almost kind of too late. If you don't do anything about it and you enter that 90 days plus delinquent phase, you're going into foreclosure, guys. Unless you have some sort of miraculous recovery and you're able to turn things around, you're going to lose the house. But people who aren't there yet and are maybe a month or two away from not being able to pay the bills, maybe somebody who was recently laid off, something like that, they're the ones typing in these searches, okay? In fact, these searches are so high, they're even higher than they were before the 2008 housing crash. So you have more people worried right now they won't be able to pay their mortgage than we had back then. And I just said we're not at crisis levels of delinquencies, but that could be a sign that we could be headed in that direction. Here's a great example of a house that's been for sale for over a year now with no traction. It listed back in February of 2025 for 7.95 million, and this was probably a tear down. They rebuilt this house from the ground up, so it is a brand new home. But now they've cut the price down to 7.495 and no takers. So $500,000 price cut, nothing's happening. But again, who can afford $7.5 million for a house, guys? This is like only America's elite have the money for something like this. Now, most likely whoever buys a house like that isn't going to be somebody typing in help with my mortgage on Google. But who is typing in that search are people who have been affected by this horrible job market. You know, we've seen a ton of people lose their jobs without the ability to recover. You know, applying for a new job right now is a death sentence in many cases, and good luck trying to replace your old salary. This is the biggest challenge a lot of people who have been recently laid off are having, and the extended unemployment without a serious emergency fund or advanced preparations for that is really bulldozing people's finances. So on the one hand, it's good that people who realize they're kind of in trouble right now and might not be able to pay the mortgage pretty soon are already starting to think ahead and do something about it, which is good because sometimes you can recover from it, right? If you go into a forbearance or you do a loan modification before you end up delinquent, then you might have a great chance at actually recovering, especially if you're able to fix your income, right? The problem is if things don't align like that, then you don't get so lucky. I want to shift gears a little bit and talk a little bit about the condo crisis in America because here's the thing. Most people typically never were really interested in buying a condo, and still more people would prefer to buy a single family home than a condo, and that's what people traditionally did up until a couple of decades ago once housing started getting more expensive. Once people couldn't afford single family homes as a starter home, a lot of people turned to condos as the more affordable option, and they definitely used to be with used to be being the key word here, but condos have been facing all sorts of problems over the last few years. First of all, the price of condos aren't really that cheap anymore. The HOA fees have absolutely exploded, and the size of special assessments can be almost like a second mortgage sometimes because they can be that large. It's not uncommon. We've heard all the time of people getting hit with six-figure special assessments with condos. They're no longer the affordable entry-level housing market option for people that want to get into homeownership. On top of that, a lot of the condos that are being built these days are geared strictly towards luxury buyers, guys. That is 100% clear here in Miami, but it's also clear in other areas across the country. This is a trend that's actually bleeding over into the single family home market as well, at least in existing neighborhoods like here in Miami. That brand new house I showed you guys a little while ago, that's all they build here now. If you were to tear down any of these houses here in Miami, that's what you're going to build. You are not going to build a house that looks just like one of these old houses in its place. It's not going to happen. The same is true for these condos. A lot of these condo projects from 50, 60, 70 years ago get torn down and demolished, and what do they build in its place? Something that is 10 or 20 times more expensive per unit than what used to sit there. Another hiccup with condos that's made them very difficult to purchase is the financing for condos can be very sketchy at best because a lot of lenders want a much larger down payment. It is almost impossible to buy a condo with an FHA loan. It is not impossible. There's a list of condos across America that actually qualify for those low down payment loans, but that list is very small. In fact, the other list that's usually not talked about, which is the Fannie Mae and Freddie Mac blacklist, are condos that are absolutely ineligible for traditional financing. If you want to buy a condo, you might have to put a significant amount of money down, maybe 25 or 30% out of pocket, and still be faced with these high HOA fees and potential special assessments. One important thing to take note of is it's not just housing prices that are a problem right now. It's all the new stuff that builders in general are choosing to build, guys. They are choosing to build huge condos that are worth millions of dollars, that only the elite can afford. Same thing goes for a lot of single family developments and neighborhoods like this. The only new properties you can typically buy that make any financial sense are these homes from the home builders like Lenar and DR Horton and those guys that still build homes that you can buy today in the $300,000 price range for a brand new house. That's basically it, and I'm not saying it's never a good idea to buy a condo these days. It still can be a good buy depending on how healthy the condo association is and how high the dues are and the amount of maintenance that needs to be done on the property, especially where it's located, things like that, can make it still a decent buy. But a lot of first time home buyers are going to have to accept the reality that they're either going to have to pay these high HOA fees and potential special assessments, or you buy a single family home and you have all the extra unexpected expenses that come up with that that are all your responsibility as well. So there's really no escaping these extra costs with homeownership. And with how many people have been defaulting lately on their mortgages and how many people are unable to sell, I would just think twice about buying any type of property right now and make sure you fully understand what you're getting yourself into and really figure out if it's the right decision for you before pulling the trigger because you have time. At this point, there is nothing that should be creating FOMO or pushing you hard to buy a property before it's too late, so to speak. That's not the case anymore. So let me know what you guys think about this different format here. Obviously, it's still walk and talk, but I'm not showing my face the whole time and showing you guys the surrounding neighborhood and things like that. Let me know what you think about this, if you like this style or not. And if you enjoyed this video, make sure you're subscribed to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here, and I'll see you in the next one.