- InGeniusly Speaking
- Posts
- Affordability Edicts?
Affordability Edicts?
By Jeff Walton & Kelly Guest
Table of Contents
With affordability in the news, some are wondering if it’s better to ban institutional investors from buying single-family homes as President Trump suggested, or offer incentives like reduced capital gains to motivate them to sell. The American Enterprise Institute floated the idea of a “capital gains tax holiday” for seniors to motivate them to move on to housing – like 55+ communities – that don’t compete with first-time buyers. A 10% interest rate cap for credit cards was also floated by the President, but banks will likely sink that.
CHATTER
MBA's Fratantoni on JOLTS Report: “This report is fairly neutral with respect to its implications for the housing and mortgage markets. It reinforces the sense that the economy is slowly growing but does not increase the urgency for additional rate cuts. As we look ahead to the spring housing market, these trends are likely to support only modest improvement in the pace of activity.”
Still an Issue: ATTOM's Q425 Affordability Report
ATTOM’s Q4 2025 U.S. Home Affordability Report shows home affordability remained worse than historical averages in nearly every U.S. County, underscoring continued pressure on buyers nationwide.
Enticing Downsizers
American Enterprise Institute Proposes Cap Gains Holiday for Seniors
A capital gains tax holiday would boost supply/improve affordability/reduce market frictions in four ways:
Lead to downsizing as baby boomer homeowners sell these locked-in homes and move to smaller ones.
About 25-30% of baby boomers moving out of single-family homes will move into types of housing that do not compete with single-family homebuyers.
It is estimated that hundreds of thousands of family-sized homes are sitting vacant, with heirs awaiting the death of a loved one, so as to benefit from the step-up in basis at death.
The filtering down process would apply to the move-up buyers purchasing the homes freed up by the capital gains tax holiday.
Retention Intentions
What they say and what they do: 79% of repeat buyers say they would consider working with the same agent again, only 13% ultimately hired their agent based on their past experience with them. Zillow's 2025 Consumer Housing Trends Report for Agents found that repeat buyers have become more experienced and intentional. The gap between those who say they’ll use their agent again and those who actually do reflects common realities — moves to new markets, agents who have retired, or life changes. Nearly half of repeat buyers interviewed two or more agents, often narrowing their short list through online research before making contact.
MOVING & SHAKING
Finance of America appointed Angela Tribelli CMO.
MLB Wholesale named Laura Brandao President of its correspondent and wholesale division (NMP).
MAXEX named John Levonick as general counsel.
PMSI promoted Jeff Choi to COO.
American Business Media LLC, publisher of National Mortgage Professional, has announced the acquisition of the assets of HomeQB LLC, a certification and software suite that helps loan officers build strategic partnerships with financial planners to grow their business.
MARKET/INDUSTRY
Bill Bodnar talks about the industry news in relation to the industry and how various proposals and initiatives may move the markets in his latest Master the Markets segment.
Mortgage Rates Stable, Purchase Demand Rising: Freddie 1-8-26
In the first full week of the new year, mortgage rates remained within a narrow range, hovering close to the 6% mark. The combination of solid economic growth and lower rates has led to improving momentum in for-sale residential demand, with purchase applications up over 20% from a year ago.
Mortgage Applications Decreased 9.7% from Two Weeks Earlier: MBA Weekly Survey for the week ending January 2, 2026. The results include an adjustment for the holidays.
The Market Composite Index decreased 9.7% on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 28% compared with two weeks ago.
The holiday adjusted Refinance Index decreased 14% from two weeks ago and was 133% higher than the same week one year ago. The unadjusted Refinance Index decreased 31% from two weeks ago and was 108% higher than the same week one year ago.
The seasonally adjusted Purchase Index decreased 6% from two weeks earlier. The unadjusted Purchase Index decreased 23% compared with two weeks ago and was 10% higher than the same week one year ago.
Tightwads: Mortgage Credit Availability Down in Dec
Mortgage credit availability decreased in December according to the Mortgage Credit Availability Index (MCAI). The MCAI fell by 2.6% to 104.7 in December. Mortgage credit availability increased on an annual basis in December due to increased loan program offerings and industry capacity compared to the end of 2024. However, on a monthly basis, credit supply declined to its lowest level in three months. The conforming and jumbo indexes both saw declines in December, with the conforming index hitting its lowest level since the survey’s inception in 2011.”
Analysis Over Assumption
Rate Lock Effect Debunk: HW's Logan Mohtashami Finds the Lock Effect is Easing
Homeowners with mortgage rates at 6% or higher:
Q1 2022: 6.99%
Q3 2025: 21.2%
Homeowners with mortgage rates at 3% or lower:
Q1 2022: 24.58%
Q3 2025: 20%
Homeowners with rates between 3% and 4%:
Q1 2022: 40.48%
Q3 2025: 31.5%
He concludes that we “clearly have growth in higher rates and a decline with those who had lower rates.”
Agents Beware: Clients Check the Net First - Zillow
36% of sellers now find their agents through online channels, more than double the 15% share in 2018.
33% of buyers say online research played a key role in how they chose their agent.
Repeat buyers account for 55% of all home purchasers, bringing greater experience, higher expectations and a more deliberate approach to hiring an agent.
Scorched Earth
Redfin Says Investors Snapped up Over 40% of Scorched So Cal Lots
Real estate investors are buying roughly 40% of the land selling in areas impacted by the January 2025 California wildfires.
In the 90272 zip code (Pacific Palisades), investors purchased 48 of the 119 lots (40.3%) that sold in the third quarter. That compares with zero lot purchases a year earlier—from both investors and other buyers.
Millennial Mindset
Hands Off My Latte: Clever Offers’ 2026 Millennial Home Buyers Report
What motivates them: Millennials are motivated to buy a home in 2026 for a number of reasons, including needing more space (42%), building long-term wealth (28%), and wanting a family (20%). But just 22% say they want to buy because they have enough money saved, according to our recent survey of 1,000 millennial home buyers.
What are they willing to do? 44% would be willing to spend half of their monthly income on housing. A majority, however, would not reduce their spending on gym memberships (77%), subscription services (71%), or coffee (67%) to afford a home.
Remorse denial: 82% of first-time millennial home buyers are confident they will have no regrets about their home after purchasing it, but the same percentage of millennial homeowners (82%) have at least one regret about their previous home purchase.
Top Home Searches of 2025: Zillow Zeitgeist
In 2024, Americans longed for space, with searches for features like “acreage,” “mansion” and “luxury” rising to the top. In 2025, they shifted their focus from square footage to what spaces can offer. From ADUs to waterfront views, the idea of a “dream home” leaned more toward lifestyle than layout.