Redfin says mortgage rates, profits are hitting real estate now | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

While mortgage rates remain stubbornly high — compared to their pandemic-era lows of around 3% for a 30-year fixed mortgage rate — important developments in the housing market are taking shape.

As of Dec. 4, 2025, the average rate for a 30‑year fixed mortgage stood at 6.19%, showing a slight decline from the previous week’s figure of 6.23%, according to Freddie Mac. In contrast with the same period a year earlier, when the 30‑year fixed rate was 6.69 percent, today’s rate reflects a modest improvement.

The 15‑year fixed mortgage followed a similar pattern, the government-sponsored enterprise reported, averaging 5.44%. This marks a decrease from last week’s 5.51 percent and is also lower than the 5.96% recorded at this time last year.

Home values have recently grown, as the median U.S. home-sale price rose 2.3% during the four weeks ending Nov. 16 — the most significant increase in seven months, according to Redfin.

But these numbers, along with other factors, are coinciding with a relatively flat market for real estate investing.

“Still-high home prices and elevated mortgage rates mean both flippers and landlords are paying more upfront while earning smaller yield,” Redfin wrote. “Even all-cash investors are facing a tough equation, because investors often take out other types of loans.”

Redfin explains current real estate investing landscape

Investor participation has leveled off for the same reasons the broader housing market has slowed. The conditions driving today’s market are a reversal of those that spurred the surge in investment during the pandemic, leaving many prospective buyers unable to afford entry.

On top of that, investors are encountering further challenges, with fewer opportunities to generate strong returns through property flips or rental income.

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“Investor activity is stuck in neutral because profits are harder to come by, more homes are selling at a loss, and the rental market has softened,” said Sheharyar Bokhari, a senior economist at Redfin. “Investors aren’t completely retreating, but they’re not driving the housing market forward.”

Real estate investors bought 17% of U.S. homes sold in the third quarter of 2025, up only a bit from 16% a year earlier.

“The mostly unchanged investor market share signals that the sluggishness of investor activity mirrors that of the larger homebuying market,” wrote Redfin data journalist Dana Anderson. “In fact, overall existing U.S. home sales are posting roughly the same modest increase as investor purchases.”

Redfin says real estate investor activity is slow

Investor activity in the U.S. remained subdued during the third quarter, with home purchases by investors rising only 1% compared to the same period last year and their overall market share edging up only slightly, Redfin reported.
The pace of buying has largely stalled because turning a profit through flipping or renting has become more difficult, and the proportion of investor-owned properties selling at a loss has climbed to its highest point in two years.
Even so, some investors continue to act, capitalizing on reduced competition in the market.
Condo purchases by investors slipped just a bit from last year but remain close to a ten‑year low.
The sharpest pullbacks are being seen in Las Vegas and Florida.

Real estate conditions keeping investor market flat

Redfin emphasizes several factors contributing to cooling real estate investing trends.

Home prices are beginning to stabilize, and investors no longer anticipate the rapid double‑digit gains that characterized the pandemic housing surge. With values leveling off in many regions — and even declining in some — the potential rewards from speculative purchases have diminished.
Rental growth has slowed, while vacancy rates are climbing. This reduces the appeal of rental properties, particularly for landlords seeking immediate returns. In addition, the short‑term rental sector has cooled in certain markets due to stricter regulatory measures.
Broader economic uncertainty is encouraging caution. Factors such as tariffs, global instability, and a softening labor market are prompting investors to hold back, both because they are more protective of their own finances and because they anticipate weaker demand for homebuying and rentals.
Profitability has weakened. In the third quarter, 8 percent of investor‑sold homes closed at a loss, up from 6.5 percent a year earlier and marking the highest share in over two years. The average capital gain from selling a property was $182,688, a decline of about 1 percent compared with last year. This stands in sharp contrast to late 2020 and early 2021, when investor returns were climbing at double‑digit rates.

Redfin says investor buying is steady

Redfin notes that it is important to recognize that, while investor purchases are sluggish, they aren’t falling.

Several factors help explain this trend.

“First, there is a base effect at play,” Redfin wrote. “Investor purchases had already dropped to an eight‑year low last year, leaving little room for further decline.”

“Second, long‑term investors who intend to hold onto properties for many years are less discouraged by elevated prices and interest rates, since they are banking on future growth in both home values and rental income,” the company added.

“Finally, some investors are inclined to step in when the market slows, taking advantage of reduced competition and the possibility of finding favorable deals.”