• Mortgage rates dropped this week from 6.83% to 6.81% for a 30-year fixed-rate home loan. What a difference a year can make: At the same time a year earlier, this number hovered at 7.17%. This rate lull bodes well for the spring season. Now, the bad news…
• Listing prices inched up by 0.6% compared to the same week last year, with the median nationwide at $424,900. This marks the first significant price hike after a lengthy limbo of flat or falling prices since June. Plus, the percentage of homes with price cuts didn’t budge (17.5%), which suggests that home sellers are standing their ground.
• The number of homes for sale surged by 30% compared to this week a year earlier, notching the 76th consecutive week of expanding inventory. Although the number of new sellers entering the market dipped by 1.6% after 14 weeks of gains, that’s likely because of Easter and Passover. Next week, fresh listings are expected to rebound big-time.
• Homes lingered on the market for four extra days compared to this week last year, with the typical listing spending 53 days up for grabs before finding a buyer. The pace of sales has been slowing for around a year, although it’s still faster than it was before the pandemic. This indicates how tight today’s housing market truly is despite high mortgage rates and home prices.

Not feeling so great about the state of real estate? Join the club.

Real estate investor optimism sank for the second straight quarter to its lowest level on record, according to the RCN Capital/CJ Patrick Company Investor Sentiment Index, which tracks how real estate investors across the country feel about the housing market. The Q1 2025 optimism score of 88 is down 36 points from last fall’s peak of 124.

More than one-third of survey respondents believe conditions are worse today than a year ago—a significant increase from last quarter’s one in four. Investors’ biggest beefs are spiraling costs (60%), supply chain disruptions (47%), and thinner profit margins on flips and rentals (40%).

“Investor sentiment is trending along the same lines as homebuilder sentiment and consumer sentiment, which recently recorded their second-lowest score in over 50 years,” noted RCN Capital CEO Jeffrey Tesch. “Our survey results suggest that enthusiasm among both rental property and fix-and-flip investors is being challenged by economic uncertainty, rising home prices and insurance prices, and high finance costs.”

Despite the bleak outlook, it’s not all bad news: Although 35% of flippers and 28% of landlords plan to buy fewer properties this year than they did last, many are simply adjusting their investment strategy to use the adversity as an opportunity. Here’s a sneak peek at their new plans.

Pivot from flips to rentals

“I am hoping to buy more properties this year but am moving away from fix-and-flips and focusing more on long-term rental properties,” says Jack O'Neill, who has renovated more than 250 homes in Virginia over the last decade.

The reason: “I’ve had 10 properties sitting on the market for 50-plus days with lower showing activity than in years past. I put these same properties up for rent and received over 20 applications in a week, and I rented them all above asking price. There’s a huge pool of qualified applicants looking at rentals; maybe fear of a downturn is keeping them from wanting to be homeowners. I have noticed a major uptick in sellers wanting to offload their properties, whereas in the last few years, sellers acted like they were sitting on gold with their homes.”

Wholesaling for fast cash

“I flipped a lot of houses in Pennsylvania in 2023, and this strategy worked well for a while, but as interest rates began to rise, the cash conversion cycle started to slow down,” says Austin Glanzer of 717HomeBuyers.com, based in Lancaster, PA.

“As a result, I’ve pivoted over the past year toward wholesaling and listing more houses. While I may be giving up the potential for higher profits on each deal, I’m able to generate cash much faster.”

Creative financing

“For 2025, I’m shifting toward creative financing like subject-to and seller-financing deals,” says Mike Wall, from Dayton, OH–based EZsellhomebuyers.com. “These allow me to acquire properties with built-in equity or below-market rates without relying heavily on traditional funding sources that are increasingly expensive. I’m also targeting distressed sellers and leaning into buy-and-hold rentals in undervalued Midwest markets, where affordability still exists and rents remain strong. So while I may do fewer flips, I’ll be doing smarter deals—ones with cash flow from day one and that hedge against the volatility we’re seeing in capital markets.”

Treat tenants like a stock portfolio

“I’ve noticed 2025 feels less like a slowdown and more like a sorting mechanism: The economic climate is forcing out the speculative players and giving room to those of us who think long-term,” says investor Ali Zane at iMax Credit.

“I’m treating tenant screening like a financial portfolio. Economic volatility means that renters with strong payment histories and stable employment are an asset in themselves. The way I see it, real estate in 2025 is less about scaling fast and more about building quietly, using leverage wisely, and staying liquid enough to pounce when the math works.”

Build-to-rent

“This year, we’re not seeing investors pull back entirely, but we are seeing a real change to how and where they buy,” says Troy Evans, director of Investor Services at Marketplace Homes. “In certain markets, especially ones that had large population swings in the last few years, flipping has begun to slow down. Higher overall costs are causing investors to look into build-to-rent or long-term rental paths that may offer a bit more stable income. In the past, we saw many investors chase volume. In 2025, investors are being much more selective and targeting markets with strong fundamentals and year-over-year rent growth.”

Buy and hold until prices go up

“As a property investor and flipper in the Northeast, my plans are still to acquire, hold, and flip,” says Ralph DiBugnara, president of Home Qualified. “Higher home prices, property taxes, and insurance, as well as high interest rates, make it very hard to turn a profit with income from rent. But I believe when mortgage rates do come down, home prices will rise significantly due to increased demand and affordability. That is the reason I’m still very interested in buying: A house bought today will be worth more over the next few years and will prove to be a worthwhile investment.”

Play the long game

“Higher interest rates and uncertainty have cooled the market, but fewer buyers and sellers often create the very conditions that favor investors who are ready and well-informed,” says Dani Beit-Or, CEO of Simply Do It, who has been involved in more than 5,000 real estate transactions in over 40 US markets. “The best opportunities in 2025 won’t come gift-wrapped. They’ll require diligence, negotiation, and a clear investment plan. I’m being more selective, prioritizing strong markets with stable job growth, and leaning on creative funding options like self-directed IRAs. If history has taught us anything, it’s that the moments of greatest uncertainty often create the best long-term gains for those who act strategically.”

Homebuyers are bailing. A Redfin report found that Trump’s tariff turmoil has convinced nearly one in four Americans to cancel plans for a major purchase, such as a house. Even among buyers who’ve made an offer, 13% backed out in March. To entice jittery buyers across the finish line, 44.4% of home sellers offered concessions in the first quarter of 2025 (such as mortgage rate buydowns).

Foreclosures are rising fast. Foreclosures rose in March to 35,890 filings—up 11% month-over-month and 9% year-over-year, according to property data firm ATTOM. According to CEO Rob Barber, this “Suggests that some homeowners may be starting to feel the pressure of ongoing economic challenges. However, strong home equity positions in many markets continue to help buffer against a more significant spike in distress.”

New-home sales remain surprisingly strong. Purchases of brand-new single-family homes surged in March by 7.4% to a seasonally adjusted annual rate of 724,000 properties. This defied expectations, with research firm Pantheon Macroeconomics calling it “hard to explain” given all the economic headwinds working against it. Some say it’s due to falling mortgage rates and falling prices. The average new home is 7.5% cheaper than it was a year ago and runs around $403,600.

Home maintenance costs more than you think. Nearly one-in-three real estate investors named “unexpected maintenance costs” as the most underestimated risk in owning a rental, per a survey by ResiClub/Flock Homes conducted between March 31 and April 7. Still, 41% of respondents believed that their real estate investments delivered returns that were “far better” than what they would have earned if they’d placed that money into stocks.

Canadians are scrapping vacations to the US. Canadian travel to their southern neighbor plummeted 12.1% year-over-year in March, according to short-term rental data site AirDNA. Although Canucks make up only 2.6% of STR demand, they dominate in certain areas such as Buffalo/Niagara Falls (21%), coastal Maine (17%), the Big Island of Hawaii (9%), and Fort Lauderdale, FL (7%).

Car-free cities are gaining ground. With automobile prices expected to rise, Realtor.com released its list of the top cities where you can live car-free. Their top city is Hoboken, NJ, where 80% of residents rely on public transit, bikes, or their own two feet to commute to work, followed by Cambridge and Brookline, MA.

If you’ve ever dreamed of owning a patch of paradise in a foreign country, you’ve got company. Interest in purchasing property abroad is on the rise among Americans who hope to either to live in these homes, rent them out, or do some combo of both. In 2022, Tennessee real estate agent Barry Richards joined in on the fun by purchasing a condo in Ambergris Caye, Belize. Here’s what he learned about navigating real estate rules abroad in case you’re inspired to follow in his sandy footsteps.

How did you end up buying this condo? “When researching investment properties, my wife and I considered Florida and Puerto Rico before looking elsewhere in the Caribbean. We had never visited Belize, but our daughter visited as an undergraduate and raved about the experience. Belize is the only Central American nation where English is the official language. Their currency is tied to the value of the US dollar, and US cash is welcomed almost everywhere. Ambergris Caye is the largest island in Belize and accounts for about 70% of the country’s annual tourist income. We specifically wanted something we could use as a vacation property to visit multiple times a year that also had the potential of generating rental income.”

How did you find the homebuying process there? “It was very eye-opening, especially compared to our experience in US real estate. Real estate agents are not licensed or regulated there. We started by identifying a reputable attorney who is experienced in both the US and Belize. We reviewed several available properties online before our first trip, narrowed them down by drive-bys once we arrived, and saw our top three choices. We returned home to the US, made an offer on our top choice, and conducted all further negotiations, inspections, and closing with a great deal of assistance from our agent and attorney.”

How much did the condo cost? “$155,000, which included furnishings. Real estate taxes and attorney fees amounted to an additional 10%.”

How much rental income does it make? “We purchased it at the end of the pandemic with no guarantee of a recovery for tourism. Fortunately, tourism has rebounded, and 2024 resulted in a net gain of approximately $7,000 after expenses.”

What advice would you have for others? “Do as much due diligence as possible. That includes the actual property as well as the HOA (if applicable), and rental property management, which may be a different entity. If possible, make multiple trips to different areas during different seasons to give you greater confidence in your investment. Since purchasing, we have formed relationships with several local real estate agents and have heard horror stories of ill-informed buyers who have invested in developments that were never completed. We have referred several buyers to agents we trust with great results, investing in this beautiful country.”

As foreclosures rise in certain areas of the US, you might start seeing more of what’s called the 30-60-90 pre-NOD. This term refers to a list of property data leads where homeowners are 30, 60, or 90 days late on mortgage payments, but no Notice of Default (NOD) has been filed yet.

Real estate investors often purchase pre-NOD lists because they allow them to find and approach homeowners, making an offer to buy their house, typically at a bargain price, before the property is officially put up for foreclosure and becomes public knowledge. Kristen Conti, a broker with Peacock Premier Properties in Englewood, FL, says that the recent downturn in her market has her planning to pursue these leads as she did during the last recession in 2008.

“I do outreach to these people who are in trouble and help them get out of their homes into something more affordable as opposed to foreclosure,” she says.

In other words, these lists can turn into a win-win for struggling homeowners and investors alike and could be worth exploring if the housing market continues to deteriorate.