All right, everybody. I look forward to this every year. I'm going to go fast. Pay attention. You don't have to write anything down because we will give you the slides towards the end. This is how I help you prepare for next year.
What's the number one question in real estate right now? How's the market? National headlines try to answer it, but they get it wrong because they report not on your street. And that's your opportunity. That's the job you do. National trends shape local markets, but it doesn't tell the story. That's like judging your kid's performance at school based on national testing scores. So, as we go, pay attention to the national headline and translate it for your market. And that's how you get loud. Make content about it. Until we help people make good decisions, uncertainty keeps them frozen.
The last 20 years were so crazy because we forgot what normal looks like. I almost called this anchored in anomaly because that's what happened. We've had two extreme markets. Rates are not going back to 2 to 3%. And guess what? The home prices aren't going to crash like 2010. And we're not going to sell 6 million homes a year anytime soon. Two things. Thank goodness for that. And that still means there's an opportunity for you to absolutely crush it. And I'm going to prove both. And I'm going to give you a playbook at the end on how to do that.
All right. General economy. I'll keep it high level. First, just a quick snapshot. The short version: the stock market is up, jobs are steady but slower, and inflation is still beating paychecks. The last one really matters to us because inflation is running higher than appreciation. So, in real nominal dollars, that means homes are slightly cheaper than they were a year ago. However, with the direction of mortgage rates, it's not going to feel like that.
Let's talk specifically about real estate. Existing home sales are up 1.6% year to date and will likely land below 4 million. First time it's happened since 1995. The median home price is about $429,000. That's up 1.6%. Guys, that's 38 straight months of gains nationally, but it's the lowest in a while. And appreciation is below inflation and wage growth is good. So that's good for affordability.
The important takeaway: that's the average. This past year, London, Kentucky had the highest drop in values at 5.12, and Austin was the largest metro drop at 4.16. However, cities like Abilene, Texas, and Wausau, Wisconsin, Rockford, Illinois had 9% year-over-year appreciation.
Now, let's talk about new homes. It's a really important part of the sector. Sales got a big boost last month, but we're still down year-over-year, 2%. And supply is at 8 and a half months. That's the largest in like 10 years. The median new home in this country is 393,000, down 5.8% year-over-year. And builders are selling fewer homes. This is the crazy stat that you guys need to be aware of. Pay attention. Median price of a new home is $36,000 below resale.
Yeah, pay attention. And builders are willing to buy down rates to sell this inventory. So you can get a new home for below resale cost with a rate maybe even in the fives. There is a reason why Berkshire Hathaway is buying up every new home builder. They're taking the bet on the long haul that new construction is an opportunity in this country. But do your buyers know that? Do your sellers know that that's who they're competing with? Also, I want to encourage you all to build referral relationships with builders and understand what's driving the migration.
Now, I've been telling agents for months, winter is here. Anyone else feel like the whole world is waiting or worried about the collapse? The collapse already happened. It happened in transaction count. Look at the graph. 1996, we sold 4 million homes. But you're forgetting an important part of that math problem. The population in the United States back then was 269 million. And this year we'll sell about 4 million homes again with 342 million. We can't stop waiting for the collapse. It already did three years ago in the number of homes we sold.
Two record-breaking booms warped our expectation. They stole tomorrow's buyers with low interest rates and a frenzy that we're just sitting through the hangover of. Most credible sources have been projecting about 4 million home sales for next year. However, with the way the interest rates have been moving and the macro, I'm going to tell you that 2027 may be the first year since 1995 that we sell less than 4 million homes with 76 million more Americans. But whether it's 3.9 or 4.1, life events drive all real estate decisions.
It will force people to move no matter what, and appreciation lets income catch up. So, let the other 1.4 million realtors hold their breath, waiting for normal to come back. For us, this is the new normal, and you have to get to work. You have to get your unfair share.
These are two different questions that you need to ask. What's supply and demand supposed to look like in your market? And do buyers and sellers understand how to take advantage of the market you're in locally? When someone asks, 'How's the market?' they're really asking you one of these questions.
You want an example of a harmful national headline? In 2025, NAR said the typical first-time home buyer is 40 years old. You guys remember that? It came in the mail as a survey. Who in their 20s or 30s opened that? Let alone mailed it back. All other reputable surveys put first-time buyers actually in their early 30s. But when 40 made all the headlines, that probably made some younger buyers go, 'Oh, maybe it is not a good time to buy. Maybe I need to wait.' Tell that to investors who've bought 30% of every home sold in this country this year. And I'm not talking about big institutional buyers. I'm talking about mom and pop buyers who own less than 10 homes. National headlines do not live on your street. Your clients need local context from you.
Okay, next big question. Are prices going to go down? And will they? Yeah, maybe in a few places, but they're going up in more. No one expects a Great Recession-level crash. We just don't have the inventory. We don't have those foreclosures. We don't have the adjustable-rate mortgages that are going to blow up. South Florida, Austin, Boise, Phoenix, Denver, they all got headlines. But that wasn't a sign of what's to come. It was a hangover of what happened during the COVID frenzies. Some places builders overbuilt, but these economies aren't crashing and homes are still selling.
Listen to this stat. A year ago, 109 US metro markets were declining. Today, it's only 54. And the decline was between 2 and 4%, not 20 or 30% that we saw during the Great Recession. And again, the majority of those markets are still seeing home price growth, just at a slower pace. How's appreciation in your market? What does that mean for your clients?
Now, what about rising inventory? Last year, inventory jumped 28.9%. This year, it's only grown by 5.9% to 1.6 million listings. But still, we're 9.6% below COVID levels of inventory. Month supply is up barely 0.3 months. Here's what it actually looks like across the top 300 markets. If you're one of the gray or blue markets, set expectations to win on pricing and if needed, reductions.
eXp University interviewed 26 icon listing agents for its new 'Price It Right, Get It Sold' course. Put that on your list. You can now just ask Claude through our MCP server whether your sellers need funds to prepare the home to compete better. Use eXp Ready. It is a differentiator, and we need to be talking to buyers about the opportunity in those markets. Again, we will have millions of homes that need to sell. Find your opportunity.
Next, the question on both buyers' and sellers' minds: Will rates go down? A few thoughts for when you're having conversations or you're creating content. We got anchored in anomaly. Since 1971, the average rate in the United States is actually 7.7. So, we're still below historic averages. And the September hike did change the median home price payment by only $65. Tell people that. Explain the monthly payment difference.
Second, 2 to 3% rates felt like finally it's how it should be. But remember what got us there. Only twice since 1954 has our Fed cut to zero. One was the Great Recession, which was the second worst housing economy ever, and it took us seven years to recover from a job placement. And COVID, the deadliest pandemic in our lifetime.
Third, mortgage rates don't follow the Fed. They follow the 10-year Treasury because mortgages are sold as an investment to compete with bonds. With a crowded bond market, high national debt, the Treasury has to keep yields high. So, I don't see rates coming down anytime soon. And by the way, that's the consensus from the NAR, Fannie Mae, and others that have rates flat or even higher in 2027. And I'll tell you, we could see a rate with an eight in front of it way before we see one with a five.
Now, does that really matter to your clients? Four conversations you need to use today. One, waiting won't pay. A quarter-point rate change was about $58 on the median home price. Two, 40% — this is super important. Did you know 40% of homeowners own their homes outright? Many are aging out of them, and if they borrowed money for the move, it would be a tiny, tiny mortgage.
Three, the 20% down payment is a myth. There are over 2,000 down payment assistance programs. By the way, Verboten Mortgage works with those. But could you name one in your county, in your state?
Four, FHA, VA, USDA loans are assumable. There are stipulations, but sellers can sell that way. You need to show them how that works. And now you can leverage Assumable, which, by the way, we're the only company in the country to have an enterprise relationship with them. Whether they can, but you can explain it.
Next question that's on both buyers' and sellers' minds: Is now the right time for sellers? We've talked about rate lock every year that I've done this presentation. However, we actually just hit a tipping point. There are more homeowners with a rate above six than homeowners with a rate below three. It just happened. And the low rates have been in place between four and six years.
The national average of a homeowner staying in their home is about 12 years. But when we look at the data on the people who actually have their homes for sale right now, they're averaging 8.4 years of ownership. They are moving because life's making the move, and it always has been and it always will. People are waking up to the fact that rates and prices are here to stay, and the 3Ds and relocation will make a reluctant buyer or seller make a decision.
This is very important. Baby boomers are entering the downsizing years. An NAR statistic from last year said 23% of all transactions were about moving closer to family. Befini made an interesting point recently, saying that people are willing to take less to make that move happen. Do you guys remember my story from last year? My parents are a perfect example. We finally sold their house in Boise just so they could be down the street from their grandkids.
Millennials have long been the real first-time buyer age, early 30s, not 40s. And their average home ownership rates are well below the national averages. 72% of renters are over 30. For renters ages 35 to 44, the average income in this country currently is around 89,000, slightly above the US median. They need to understand the math of renting versus buying.
So now, is now the right time to buy? Yes and yes for two types of buyers. First, homeowners, and second, investors. The average rent in this country is $2,000 a month. Renters are effectively burning $24,000 a year, and the money's gone. Buyers get appreciation for savings account in the way of principal, which on the median price home is $13,000 a year.
Also, for the last three quarters reported, investors bought over 30% of the homes. Again, I said it earlier, 90% of them are mom and pop. They see the opportunity. So three things, pay attention. Find investors and put deals in front of them. Brandon Bringham has expanded investing sessions. He'll show you how they think. Make sure you attend one of those sessions.
Second, become an investor yourself. You don't need the money. You just need to find the deals. Again, Brandon will show you how. And third, tell your regular buyers the stat about investors. Explain to them what the opportunity is.
Once you help buyers and sellers decide if this is in their best interest to act, the only question is why you? The real estate industry keeps changing. Regulatory fights, consolidations, with some people racing to prop up broken business models by keeping listings off the market to double-end them, knowing that hurts the seller. These are the fights we'll keep fighting for you so you can stay focused on your business.
So, let's talk about why you. In 2021, the business looked easy. 3% rates, homes sold in days, and that's exactly why the amount of agents ballooned to a record 1.8 million agents. But let me be honest, right now you're not competing with 1.4 million realtors. You're just simply not. This market requires skills to compete. And for a professional like you, that's the edge because work is the moat.
Work exposes people who are never building a real business. Work separates the agents willing to invest in themselves. Like everyone in this room, you made the time and the investment to be here. When you put work, your business takes off. And those who stay consistent in the market are the ones that survive. You will claim your unfair share from the people that didn't do the work. Look at the decline in agent count over the last three years. Home sales are expected again to stay low. It's already begun.
Here's what work actually means. And it's simple. It's just not easy. Pick three lead generation sources. Work them every single day. Ask yourself one question daily: How do I grow my business today? No excuses. Today's business is never the reason for you not to have tomorrow's business. Look, everyone has a realtor cousin. And if you wait for people to ask you, they could call their cousin instead. Our opportunity is to reach out and help them understand the national headlines because those don't live on the street.
Let me show you how this is actually happening as your advantage. Your database, social media, whoever, whatever you choose, just get in front of people daily. Act as if you're their agent before becoming their agent.
All right, let's make this as easy as possible. We're going to give you exactly what to do. In addition to our two-time award-winning FastCap program, eXp University has interviewed the top icon agents doing SOI, open house, and social media-driven business. In the University Icon Lead Mastery series, those icons shared their most effective posts, SOI reach-out ideas, open house strategies, and many other ideas.
In our training, the university compiled those into 12 months of engagement plans, each with a lead gen source, literally day by day, week by week. The strategies that you need are all in there. Here's the entire fourth quarter of icon ideas from several of those classes. And in this package, you can access our AI tools created with their research that will allow you to tailor these strategies to your market.
For example, the social media tool can even give you everything for the post: the hook, the script, the caption, the visuals. And now you can use the eXp MCP through your favorite LLM. This QR code will give you this all for free in a package. And it also gives you the deck, which includes the social media-ready versions. So, some of the visuals we've walked through, all you have to do is act.
Let me challenge you, social media agents. Will you commit to one post a day? I'm not asking you for 30 like Gary did. By the way, I'll do it with you. Hold me accountable. I'll hold you accountable.
SOI focus agents, you've seen the results of FastCap. The minimum standard is to have five real conversations per day. Can you commit starting Monday when you get home to at least do that with your own database?
Open house agents. Pacin Robertson did 100 open houses in 100 days. They weren't even his listings. There's no excuses. Hunter and Clay on Dylan Naka's team did 30 in 30 days. We're going to give you their actual playbooks. How many can you guys do in the next 30 days? We now have the ShowGo app to assist you.
Whatever form of lead gen you use, can you commit to the next 30 days to sprint starting Monday and set yourself up for a stretch goal so you can kick off 2027 the right way? Yes, guys.
We don't get paid to fill out contracts. We don't get paid to coordinate parties. We get paid to help people navigate one of the most important financial decisions of their lives. Thank you so much.
