Alan Ratner on Housing Market Comeback Potential in 2026

Housing Affordability Challenges

• 🏠 Housing affordability remains a complex issue with significant attention from the administration and industry.
• ⚠️ The primary bottlenecks are identified at the local municipality level, including impact fees and approval delays.
• 🔑 Federal government intervention is seen as potentially beneficial but unlikely to make a huge dent without local involvement.

Interest Rates and Mortgage Outlook

• 📉 While the Federal Reserve controls short-term rates, the 30-year mortgage rate is influenced by the 10-year Treasury yield and inflation expectations.
• 📊 Even with Fed rate cuts, there hasn't been a commensurate drop in 30-year mortgage rates.
• 💡 Potential improvements like LLPAS and Fed buying MBS are being considered, but a huge reduction in mortgage rates for 2026 is considered unlikely.

Impact of Tariffs on Housing Costs

• 📦 Concerns that incremental tariffs would increase home production costs by $5,000-$10,000 per door have not materialized for large public builders.
• ⚖️ Builders have used their scale to push back on trades and suppliers, absorbing tariff costs.
• 📉 New home prices have declined this year, partly due to incentives like mortgage rate buy-downs, suggesting reversing tariffs might not benefit consumers.