{"id":187921,"date":"2026-05-19T05:00:08","date_gmt":"2026-05-19T11:00:08","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=187921"},"modified":"2026-05-19T19:10:47","modified_gmt":"2026-05-20T01:10:47","slug":"on-the-market-426","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/on-the-market-426","title":{"rendered":"Inflation Is Back, and It&#8217;s a Warning Sign for Mortgage Rates"},"content":{"rendered":"<div class=\"relative width-full grid items-start css-mvxb92\">\n<div class=\"width-full height-full \" data-testid=\"page-element:cellEditor\" data-elementtype=\"cellEditor\">\n<div class=\"\">\n<div class=\"\" aria-busy=\"false\" data-tutorial-selector-id=\"pageCellLabelPairPodcastDescription\" data-testid=\"stackedLabel\">\n<div data-testid=\"cell-editor\" data-readonly=\"true\" data-columntype=\"richText\">\n<div class=\"flex-auto flex baymax\">\n<div class=\"width-full\">\n<div class=\"flex-auto relative baymax quillWrapper readFirstRichTextCellEditor matchFormModeV2RichTextCellEditor readOnly fullyReadOnly\">\n<div class=\"ql-container ql-disabled\" data-keyboard-focus-trap=\"false\">\n<p>Just when we thought it was handled, <a href=\"https:\/\/www.biggerpockets.com\/blog\/investor-understand-inflation?utm_source=podcast&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\"><strong>inflation<\/strong><\/a><strong> is starting to surge back<\/strong>\u2014and <a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-1207?utm_source=podcast&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\"><strong>mortgage rates<\/strong><\/a><strong> are already adjusting<\/strong> fast. But, for real estate investors, there\u2019s a <strong>silver lining<\/strong>. Some markets are seeing <strong>rising rents<\/strong> <em>and<\/em> <strong>lower home prices<\/strong>, making it an ideal buying scenario for investors <em>if<\/em> they can hang on to the property during these high-rate times.<\/p>\n<p>It\u2019s been a wild week in the housing market, and we\u2019re unpacking everything in this headline episode.<\/p>\n<p>First, we\u2019ll talk about the <strong>new inflation numbers<\/strong>. You probably already know they\u2019re not great, <em>but<\/em> could they <strong>force the Fed to resume raising rates?<\/strong> We have a\u2026lively\u2026discussion about it. Next, <strong>investors lose millions of dollars in the newest <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-scams-are-getting-worse-heres-how-to-protect-yourself?utm_source=podcast&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\"><strong>real estate \u201cscam\u201d<\/strong><\/a> run by a trusted community member. This isn\u2019t something new, so we\u2019re sharing the exact steps you should take before <em>ever<\/em> wiring someone money for a real estate deal.<\/p>\n<p><strong>Big buyers gain ground on a <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-399?utm_source=podcast&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\"><strong>new housing bill<\/strong><\/a> as an amended version drops language many investors had considered a lock. Finally, we\u2019re going over the <strong>cities with the fastest rising (and falling) rent prices in 2026<\/strong>\u2014and which markets are seeing the perfect storm of rising rents and <a href=\"https:\/\/www.biggerpockets.com\/blog\/12-states-where-home-prices-are-falling?utm_source=podcast&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\">declining home prices<\/a>.<\/p>\n<p><a href=\"https:\/\/podcasts.apple.com\/us\/podcast\/on-the-market\/id1615086704\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to listen on Apple Podcasts.<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2>Listen to the Podcast Here<\/h2>\n<p><iframe loading=\"lazy\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC9464068484\" width=\"100%\" height=\"200\" frameborder=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<h2>Read the Transcript Here<\/h2>\n<div style=\"overflow-y: scroll; max-height: 400px; background: #eee; padding: 20px; border: 1px solid #ddd;\">\n<p>Dave:<br \/>\nWe&#8217;re in a stretch of the spring housing market where the stories on paper that you&#8217;re reading and the stories on the ground don&#8217;t exactly match. Listings are picking up the government is meddling in the housing market and single rate moves or single headlines can change the mood of the entire market overnight. So if you&#8217;re trying to make sense of what is actually happening, you&#8217;re not alone. I&#8217;m Dave Meyer alongside Kathy Fettke, Henry Washington, and James Dainard. And today we&#8217;re breaking down the latest housing market headlines from scary inflation to an important provision about build to rent, avoiding scams and the latest rent trends. Today we&#8217;re breaking down what you need to know. This is on the market. Let&#8217;s jump in. I&#8217;m going to go first because I am scared. I&#8217;m not really all that scared. I&#8217;m just frustrated because have you guys seen these inflation numbers the last couple of days?<br \/>\nYeah. It&#8217;s<\/p>\n<p>Kathy:<br \/>\nNot pretty.<\/p>\n<p>Dave:<br \/>\nThey suck. They just suck. That&#8217;s the only way to talk<\/p>\n<p>Kathy:<br \/>\nAbout it. We were getting control of the story and now it&#8217;s gone.<\/p>\n<p>Dave:<br \/>\nI know. And just so everyone knows the headline inflation that most we talk about a lot and that you probably hear about in the media is the CPI, the consumer price index. And that wasn&#8217;t good. That has shot up to the high threes year over year, 3.8. As you probably know from listening to a show, they want it around two. We were down to about 2.5 the last couple months it&#8217;s turned around. But the thing that really worried me, Kathy, I know you saw this, you made something about Instagram about it, but the PPI, which is the producer price index, basically what it costs for manufacturers and companies to build the stuff that they sell you absolutely just skyrocketed to scary numbers. It is up 6% year over year. That is the biggest increase since December 2022, which if you remember, no one was happy in December of 2022 about what was going on with inflation.<br \/>\nI<\/p>\n<p>Kathy:<br \/>\nDon&#8217;t like the sound of that.<\/p>\n<p>Dave:<br \/>\nRight. And so I don&#8217;t know. I mean, I guess the long and short of it today, mortgage rates bounce back up. They&#8217;re at 6.6 now, bond market&#8217;s going up. So I got curious about this because I&#8217;m a dork and I was like, it just logically made sense to me. If the producer price index goes up, does the consumer price index follow the next month because there&#8217;s kind of this subsequent correlation? The answer is yes.<\/p>\n<p>Kathy:<br \/>\nNo, because the businesses love to just swallow the cost. Yeah, they don&#8217;t want to pass it on.<\/p>\n<p>Dave:<br \/>\nI feel like they used to, right? It used to be a little bit, but now people just pay it. I guess that&#8217;s what I&#8217;m curious about. Do that ever end? Because what I found is for seven months after the PPI goes up, the CPI usually goes up and the PPI is still going up. And I honestly think oil prices might go up even more than they have. So I look at this, I think mortgage rates are going to be very high and I think we&#8217;re going to see prices start to come down in the market. I just think nationally, I&#8217;ve said this for a while, but I think we&#8217;re going to have a weak housing market this year. I don&#8217;t know if you guys, if I&#8217;m overreacting, but Henry, James, what do you guys think?<\/p>\n<p>James:<br \/>\nNo, I&#8217;m loving that I&#8217;m about ready to list 15 homes in the next four weeks. Oh<\/p>\n<p>Kathy:<br \/>\nMan.<\/p>\n<p>James:<br \/>\nBut the housing market&#8217;s definitely weak right now. The demand across the board and I&#8217;m talking to builders, investors, retail people, everyone&#8217;s like in this state of shock not knowing what&#8217;s going on and they&#8217;ve just gotten through deals and they haven&#8217;t really clicked out of return, but I&#8217;m seeing some extremely good buys on dirt.<\/p>\n<p>Dave:<br \/>\nOh really?<\/p>\n<p>James:<br \/>\nI was trying to pedal a lot this week and this lot is a great location in Seattle, Columbia City, 6,600 square feet. The lot two down, same lot, sold three years ago for 850,000. The highest number a builder will pay for this lot right now is 500,000. Geez. Whoa. I was like, I&#8217;ll just keep it. What are you guys talking about? I mean, I&#8217;ll just land bank this thing because 500 grand for a site that you can potentially put four to six houses on.<\/p>\n<p>Dave:<br \/>\nIs that slow market, higher costs, both?<\/p>\n<p>James:<br \/>\nI think it&#8217;s just higher cost, controlling costs. The debt cost is really beaten up builders and then the time and duration to dispo these things with the slow housing market, the debt&#8217;s just eroding these deals. If you look at it on paper, like what they bought it for, they built it for and sell. Yes, the bill cost went up maybe 10%, but that&#8217;s not the detrimental part. It&#8217;s the forecast of the hold and the debt that&#8217;s really beating these deals up. But I mean, 500 grand for this lot was unreal. I was like, &#8220;Okay, well, maybe it&#8217;s not a good development site now, but is it a good rental site?&#8221; So there&#8217;s low demand, but then it also pops up new investment opportunities that you weren&#8217;t able to buy the last couple years.<\/p>\n<p>Kathy:<br \/>\nAre you going to build on that or?<\/p>\n<p>James:<br \/>\nNo, what I think I&#8217;m going to do on that one is just bur the property and it will be a little bit of a negative loss and then start permitting out two or three in the back of the property. I&#8217;m doing that on another site right now too that I got in cheap and the math will work, but those are really good properties to 1031 later when the dirt catches back up because dirt goes up and down. And what I do know is if someone was paying 800, 850 for that lot two, three years ago, well, it will go back up to that number or get real close because this is like a core in city and fill lot. And those are the ones that I&#8217;m really trying to focus on. Okay, how do you put that in your portfolio? You kind of eat the loss for a little bit, but the goal is really to just sell it in two years and then trade it out for higher cash flow.<br \/>\nAnd that&#8217;s where I&#8217;m seeing a lot of the opportunity.<\/p>\n<p>Dave:<br \/>\nAll right. Well, I hope you&#8217;re right.<\/p>\n<p>Kathy:<br \/>\nI have a few properties we&#8217;re supposed to be selling and maybe we won&#8217;t be. Maybe we&#8217;ll be holding a bit longer.<\/p>\n<p>Henry:<br \/>\nI got three offers this week on properties that we had listed. One has been listed for ages. The other two, one was listed for two weeks and the other one was listed for two days. That&#8217;s<\/p>\n<p>Kathy:<br \/>\nBecause you&#8217;re on the other side of the universe. The part of the country that&#8217;s actually functioning very well. It&#8217;s<\/p>\n<p>Dave:<br \/>\nSo weird. I&#8217;m selling a property in Michigan right now. I got six offers all around the same price and three of them that have canceled. They&#8217;re just all canceling the contract. It&#8217;s just super weird. People are just getting cold feet,<\/p>\n<p>Kathy:<br \/>\nI think.<\/p>\n<p>Dave:<br \/>\nYeah,<\/p>\n<p>Kathy:<br \/>\nGetting spooked.<\/p>\n<p>Dave:<br \/>\nGot it under contract the fourth time at the same price that I wanted. Hopefully this one will go through. It&#8217;s just super weird.<\/p>\n<p>James:<br \/>\nIt is weird because I would think the high interest rates would affect a little bit more of the first time home buyers and the kind of more affordable price point. But those are the listings that we are selling. We&#8217;re actually selling a bunch of homes for a hedge fund where they&#8217;re newer construction priced in the three to fours, couple hours out of Seattle. Those are all selling. The in- city metro properties are the ones that are sitting a lot more, which that&#8217;s actually where the money is. So I feel like everything&#8217;s out of whack right now.<\/p>\n<p>Henry:<br \/>\nYes.<\/p>\n<p>Kathy:<br \/>\nYeah. I mean, coming back to the story on how inflation is going to affect us and the fact that we see it moving in a trajectory that&#8217;s the wrong one. It&#8217;s going up, which means rates are going up, which means the Fed is probably not cutting rates, which was their plan. The plan has been to like two rate cuts this year. It could be two rate hikes this year. So a lot of people in commercial real estate are in for some more pain.<\/p>\n<p>Henry:<br \/>\nDo you think the new Fed share is going to hike rates?<\/p>\n<p>Kathy:<br \/>\nYeah.<\/p>\n<p>Dave:<br \/>\nIt&#8217;s not up to him. He&#8217;s one of 12 voters.<\/p>\n<p>Kathy:<br \/>\nAnd I think he&#8217;s going to be independent.<\/p>\n<p>Dave:<br \/>\nLet&#8217;s hope. I hope that&#8217;s true.<\/p>\n<p>Kathy:<br \/>\nI know that&#8217;s Henry does not agree. We shall see.<\/p>\n<p>Dave:<br \/>\nBut it&#8217;s not up to him. He does not unilaterally decide monetary policy. That&#8217;s<\/p>\n<p>Henry:<br \/>\nMattered on anything else that&#8217;s happened so far. It<\/p>\n<p>Dave:<br \/>\nDoes. There&#8217;s voters. 12 people vote on monetary policy. And last time, last vote, 11 of them voted to keep rates the same. Only one person voted to cut rates last time. So even if Warsh votes to cut rates, that&#8217;s two out of 12. Maybe he can convince everyone, but the data is suggesting the other. I&#8217;m not expecting rate cuts anytime soon.<\/p>\n<p>Kathy:<br \/>\nAre you expecting rate hikes? Because I kind of think that&#8217;s where we&#8217;re headed.<\/p>\n<p>Dave:<br \/>\nI think that might be politically too far. I think there&#8217;s probably, if I had to guess, they&#8217;re just going to keep it where it is. But I think you&#8217;re right, Kathy. The big losers here are probably going to be existing multifamily operators. People who have been trying to kick the can down the road. To rates drop. Because just so everyone knows, commercial loans are much more correlated with what the Fed&#8217;s doing than residential. Residential is really much more about the bond market. That&#8217;s going up. That&#8217;s not looking pretty, but it&#8217;s not going crazy. And there&#8217;s not the sense of urgency in the residential market for people to refinance. In the multifamily, large multifamily space, there absolutely is. And I was already starting to hear a lot of grumblings about distress in multifamily and I think we&#8217;re going to just have more and more of that.<br \/>\nThere&#8217;s<\/p>\n<p>Kathy:<br \/>\nGoing to be more.<\/p>\n<p>Henry:<br \/>\nThe time&#8217;s coming because it&#8217;s not just the operators that were banking on the rates to drop. They&#8217;ve been getting extensions from banks because the banks are hoping that the rates drop and these things stay in the grain and then they&#8217;re not giving them anymore.<\/p>\n<p>Kathy:<br \/>\nThey&#8217;re done with the extend and pretend. They&#8217;re foreclosing. I&#8217;m literally signing a purchase sale agreement right now on an apartment and it looked great, but now with rates going up, I&#8217;m not sure.<\/p>\n<p>Dave:<br \/>\nAll right. Well, we got to take a quick break, but we&#8217;ll be back with three more headlines right after this. Welcome back to On the Market. I&#8217;m Dave Meyer here with James, Kathy, and Henry going over the headlines. Before the break, we all complained about inflation for a little while, but we have other real headlines to go over. So Kathy, what&#8217;s your story this week?<\/p>\n<p>Kathy:<br \/>\nWell, these are headlines that just come up way too often more than they should. And I just feel like I am doing everything I can to help people not fall for fraud. This AP article came out ex- Brooklyn judge accused of swindling real estate investors out of millions of dollars. So basically a former New York City judge who resigned last year while under investigation for professional misconduct was charged Wednesday. In November of 2024, prosecutors say that he offered two investors an opportunity, an opportunity. That&#8217;s a word that scares me whenever I see it in an email, to buy commercial real estate in New Jersey through a bankruptcy auction. And he said, &#8220;Look, I&#8217;m an attorney. I have a trust account just deposit six and a half million in here so that we can buy this in the auction. We got to have the cash ready.&#8221; They did it and days later millions were gone and spent in his own account.<\/p>\n<p>Dave:<br \/>\nImagine that.<\/p>\n<p>Kathy:<br \/>\nIt&#8217;s like tricky because here&#8217;s this judge and people are like, &#8220;Well, he must be &#8230;<\/p>\n<p>Henry:<br \/>\n&#8221; Trustworthy?<\/p>\n<p>Kathy:<br \/>\nTrustworthy. He might be it. But the bottom line is it does not matter if it&#8217;s your mother. Don&#8217;t do things no matter who it is, if you&#8217;re not protected. And was it really a trust account? No, it was not clearly. Especially, this is the thing that always blows me away when people do this with millions of dollars. I see it all the time. Okay, maybe you gamble with 10,000, still a lot of money and still a bummer to lose, but millions?<\/p>\n<p>Dave:<br \/>\nWhy is there so much scams in real estate? Because<\/p>\n<p>Kathy:<br \/>\nIt&#8217;s so easy because people get excited and especially if there&#8217;s any kind of credibility like that, like, &#8220;Oh, they have a podcast. Somehow that makes you credible.&#8221; Right?<\/p>\n<p>Dave:<br \/>\nWell, not in any of our cases.<\/p>\n<p>Kathy:<br \/>\nYeah. But it&#8217;s true. I mean, I don&#8217;t care if people feel like they know you because you&#8217;re a celebrity, it should be no different than, like I said, with your own family. Yo know them pretty well and you still shouldn&#8217;t do certain things. It just all needs to be done properly. And that&#8217;s why we have escrow accounts. That&#8217;s why we have title companies. It&#8217;s why there&#8217;s real estate attorneys. There are places you can go, especially when we&#8217;re talking millions of dollars to make sure your funds are secure.<\/p>\n<p>Dave:<br \/>\nSo just what could people do if you&#8217;re interested, because there are real opportunities, not all syndications are scams. There are good real deals out there. How should people do this diligence?<\/p>\n<p>Kathy:<br \/>\nWell, in a syndication, you have a private placement memorandum, you have an operating agreement, you read those things to make sure you understand what the deal is, where the money&#8217;s going, how the money&#8217;s going to be spent, the underwriting for that. That should all be spelled out in there. And then when you wire the money, you are part of the operating agreement, you&#8217;re part of the LLC. At least that&#8217;s the way we structure it. Also, I mean, that&#8217;s just with syndications, but with other deals, I&#8217;ve got a colleague who has now been accused of fraud. I probably know 20 people who have been accused of fraud and many of them are in jail. One of the ways that I&#8217;ve seen this happen is people taking promissory notes. So it&#8217;s just not secured to anything. It&#8217;s just you&#8217;re just giving people money and you get a note in return.<br \/>\nAnd right now, one of the most popular things right now is note investing. Everybody talks about it like it&#8217;s the safest way. And if you&#8217;re not experienced, you might think, &#8220;Well, I have a note I invested with this person and we signed an agreement, but it&#8217;s not secured against the real estate, gone through a title company. You just literally wired this person money and they gave you a promise to pay, which if they don&#8217;t pay, you&#8217;re out of luck. There&#8217;s no collateral to take the property. So I think, Dave, there&#8217;s a lot of ways that people find themselves in a fraudulent situation. So have at least an attorney review what you&#8217;re doing.<\/p>\n<p>Henry:<br \/>\nAnd in this situation, it sounds like they really just threw money into an account with no deal or property named that they were going to purchase. And that&#8217;s got to be the first red flag if you&#8217;re investing in some sort of syndication to just throw money somewhere to buy a potential property at a foreclosure. That&#8217;s weird.<\/p>\n<p>Dave:<br \/>\nIt&#8217;s just if it sounds too good to be sure. That&#8217;s just weird. Just question it. That&#8217;s just weird. Yeah, it&#8217;s so bad.<\/p>\n<p>James:<br \/>\nYeah. There&#8217;s gap funding where a lender will say, Hey, can you just fund this? We&#8217;ll pay you off. Buy it at the auction on Friday. We&#8217;ll pay off by Monday. And that does happen.<\/p>\n<p>Henry:<br \/>\nYeah, but it&#8217;s still tied to a particular property at that point, right?<\/p>\n<p>James:<br \/>\nIt is. Yeah. Or if you&#8217;re getting a promissory note, I mean, promissory notes float around everywhere and those are as good as an IOU. If the person doesn&#8217;t have assets and the promissory note, if you&#8217;re not getting a promissory note and you haven&#8217;tvetted the person, their finances, what they&#8217;re worth, what kind of liquidity, it is worth nothing. You always want to have it secured against the property.<\/p>\n<p>Kathy:<br \/>\nIt&#8217;s worth nothing. It&#8217;s a promise.<\/p>\n<p>Dave:<br \/>\nIt&#8217;s literally called the promissory note. It&#8217;s like, I promise to pay you back. I mean, there are other kinds of investments where it makes sense, but real estate absolutely does not make sense.<\/p>\n<p>James:<br \/>\nI mean, at the end of the day, no matter what, if you&#8217;re investing in anything, have attorneys read the paperwork. Amen.<\/p>\n<p>Henry:<br \/>\nYes.<\/p>\n<p>James:<br \/>\nAnd there&#8217;s a difference between bad operations and fraud. That&#8217;s fair. And the fraud word&#8217;s getting thrown around right now and it has nothing to do with fraud. It&#8217;s just they had a bad proforma and they structured the deal wrong and they can&#8217;t cover. But at the end of the day, before you decide to give anybody money, read the paperwork and understand the risk. No matter what, this is not Sunshine and Bunnies.<\/p>\n<p>Henry:<br \/>\nYou should be able to read through the documents, understand what they&#8217;re buying, how they&#8217;re buying it, why they&#8217;re buying it, when you&#8217;re supposed to get payouts, when you&#8217;re not. What&#8217;s the history of this operator? Have they done this successfully before? If you can&#8217;t check all of those boxes, then you either need to run this by somebody who has more experience than you or don&#8217;t do it. It&#8217;s not worth it.<\/p>\n<p>Kathy:<br \/>\nYeah.<\/p>\n<p>James:<br \/>\nTotally agree.<\/p>\n<p>Kathy:<br \/>\nPut your money in the stock market, an index fund, and just forget about it if you&#8217;re not going to do the work to learn what you&#8217;re investing in.<\/p>\n<p>Dave:<br \/>\n100%. I do want to echo what James said though is there is a difference between a scam, a bad deal that could not just be a bad deal, that could be a poorly structured deal, an overly-<\/p>\n<p>Kathy:<br \/>\nOverly optimistic?<\/p>\n<p>Dave:<br \/>\nYeah, overly optimistic or just a high fee deal, which is not a scam. It&#8217;s like they shouldn&#8217;t do that, but that&#8217;s in you to avoid. That&#8217;s the easiest due diligence you could do. Look at the fees. Figure out are they charging too much?That is the easiest thing you can do. You don&#8217;t even need to know anything about the asset.<\/p>\n<p>Kathy:<br \/>\nAnd the expenses.<\/p>\n<p>Dave:<br \/>\nAbsolutely.<\/p>\n<p>Kathy:<br \/>\nThat&#8217;s been a gray area in some of the deals I&#8217;ve done. And if it&#8217;s not fully outlined, if there&#8217;s a little line that says there&#8217;ll be office expenses or whatever, what does that mean? Does that mean we&#8217;re paying for your whole office, your assistant? You&#8217;ve got to spell it out and how much?<\/p>\n<p>James:<br \/>\nPool boy. If you&#8217;re paying the pool boy, we&#8217;re<\/p>\n<p>Kathy:<br \/>\nIn the other way. Can&#8217;t pay the pool boy.<\/p>\n<p>Henry:<br \/>\nThey do like to skim off the top.<\/p>\n<p>Dave:<br \/>\nThat&#8217;s a perfect out. Let&#8217;s move on. All right. And with that, Henry, give us a story. You&#8217;re the only one making sense right now. So you just give us a story.<\/p>\n<p>Henry:<br \/>\nAll right. I brought an article from the real deal. It says House Knox bill to rent provision from amended Senate bill. So this is about the Road Housing Act, which had bipartisan support, which in this day and age is pretty hard to come by. But the House just released its amended version of the Road Housing Act and it dropped two major provisions from the bill. The first provision it dropped was the provision around institutional buyers. So the original bill said, no institutional buyers. If you have more than 350 homes, you cannot buy single family homes. That is not the case anymore. They have dropped that from the bill.<\/p>\n<p>Dave:<br \/>\nShocking.<\/p>\n<p>Henry:<br \/>\nYeah. Right? So that is out. And the other thing that they changed in the bill was they removed the seven year selloff rule for bill to rent. So in other words, if you&#8217;re building a bill to rent community, the previous bill said that you have to sell the properties within seven years. So you can build them and you can rent them, but then you have to sell them. Obviously many bill to rent operators didn&#8217;t like this, that they were going to lose a lot of their profitability. It wasn&#8217;t going to be worth it. And so there was going to be this big problem with all of this inventory that they were building. That has now been dropped. The seven year provision has been dropped. So now they don&#8217;t have to sell within seven years. They can essentially continue with build to rent communities.<\/p>\n<p>James:<br \/>\nWhy would that be in there in the first place though? You don&#8217;t put handcuffs on people that are providing housing.<\/p>\n<p>Kathy:<br \/>\nYeah. Here we are bringing on more housing for renters. It&#8217;s almost like there&#8217;s so much focus on buyers. What about the renters who would love to have a beautiful home to rent that&#8217;s new? I know. We have our build to rent community and we would have sold it within those seven years anyway. That&#8217;s part of our business plan, but who&#8217;s going to buy it? They&#8217;ll only get to hold it for seven years where they might want to hold it longer. But the bottom line is this is bringing on new supply. It happens to be for renters, but don&#8217;t renters get a voice. Don&#8217;t they get to have a nice place to live? So I&#8217;m really glad this was dropped. There were so many build to rent communities that just stopped. They just have been sold. The owners didn&#8217;t go forward with construction. So that was really not good for the market.<\/p>\n<p>Henry:<br \/>\nThis says that provision originally ended up freezing about 3.4 billion in build rent investments across 14 firms. So that&#8217;s roughly 10,000 units that operators just stopped building. So it was essentially going to stop this inventory that&#8217;s going to come online and that seems to have been what was a big driver in them dropping this part so that that inventory now will come online. It&#8217;ll come online for renters, but they were hoping it seems like that they wanted to bring that inventory on for the traditional family or home buyer.<\/p>\n<p>Dave:<br \/>\nYeah. I get both sides, but I do think it doesn&#8217;t really make sense. We need more housing units. It&#8217;s just like, what&#8217;s the difference between building a multifamily and a build for rent community? It&#8217;s just like the type of asset. Why would you disadvantage people who are creating single family homes for rent versus apartments for rent? This just seems kind of like a trivial distinction to me. Yeah,<\/p>\n<p>Kathy:<br \/>\nIt&#8217;s just a horizontal apartment really.<\/p>\n<p>Henry:<br \/>\nI said when the bill first came out that institutional or when we were talking about the ban on institutional investors, I&#8217;m just like, there&#8217;s a lot of wealthy institutional investors with a lot of pull in Washington. So I&#8217;m not surprised that it changed. It hasn&#8217;t completely ruled them out. There&#8217;s just less restrictions in what they&#8217;re really calling an institutional investor and what they can buy, but it&#8217;s<\/p>\n<p>Dave:<br \/>\nA<\/p>\n<p>Henry:<br \/>\nLitle funky. All<\/p>\n<p>Dave:<br \/>\nRight. Well, if it does actually pass, we will do another episode or segment on the show to remind everyone what&#8217;s in there, because there are some really interesting things in there in addition just to the build to rent stuff. So we&#8217;ll get to that. Today though, we do have one more story from Mr. James Dainard, but we got to take one more quick break. We&#8217;ll be right back. Welcome back to On The Market. James, you&#8217;re up. Regale us with your stories.<\/p>\n<p>James:<br \/>\nAll right. Well, I just got done paying a big nasty tax bill and I&#8217;m starting to rethink my life.<\/p>\n<p>Kathy:<br \/>\nMan, I&#8217;m so curious how much you paid.<\/p>\n<p>James:<br \/>\nNot a good number.<\/p>\n<p>Kathy:<br \/>\nYeah.<\/p>\n<p>James:<br \/>\nYou know what? For people to say investors don&#8217;t do anything for people, I pay a lot for roads and all the things. So I feel like I contribute.<\/p>\n<p>Dave:<br \/>\nNot enough, dude. The roads in Seattle suck. It is<\/p>\n<p>James:<br \/>\nRude here.<br \/>\nAbsolutely terrible. They&#8217;re not taken care of. And also now we have this millionaire tax coming in through another 10% in income tax. For me, I do a lot of passive blending. I like it. It&#8217;s very, very passive, headache free. But once the return really starts, the after tax return is starting to shrink and shrink and shrink. And so I&#8217;m going, okay, well, how do I repurpose this, reposition this? And part of that is I&#8217;m going out of state for some other types of loans. But right now with the market, the way it&#8217;s going and with the inflation reports, and I do think we&#8217;re going to see some dips across the board. I&#8217;m starting to see across our portfolio, like I was talking to actually Dave about this, like something in West Seattle. It&#8217;s hard to find rental units right now in these metro areas and rents are going.<\/p>\n<p>Henry:<br \/>\nYep.<\/p>\n<p>James:<br \/>\nSo this article says where rents increased or decreased the most in 2026. Because right now depending on where you invest, for me in Seattle, not the most landlord-friendly state, more and more restrictions are coming through. It&#8217;s harder to get property to get the cash flow. And then as the market levels off, is the equity growth slowing down? And so I&#8217;ve been trying to figure out, okay, where can you pick up? Because I love cashflow, but most importantly, I like buying upside growth markets. Things that have a little bit of path of progress and they can run. And so I was a little surprised by where the rent increases were, but the top 10 cities was San Francisco that grew 13.94% in rent. Wow.<\/p>\n<p>Kathy:<br \/>\nOh my gosh.<\/p>\n<p>James:<br \/>\nIt went from 3,362 up to 3,830 in one year.<\/p>\n<p>Kathy:<br \/>\nYikes.<\/p>\n<p>James:<br \/>\nAnd then Reno, Nevada 6.5, Chicago 6.5, Virginia Beach, New York 5.3. And it goes on and then it goes into the biggest declines, which Austin, Texas, I think we&#8217;re not surprised by that. It&#8217;s just the constant skid down, but that is down 2.8%. Then St. Petersburg, Florida is down 2.19% and Washington DC is down 1.99%. Now 1.99% down 1%, I don&#8217;t think that&#8217;s a big deal.<br \/>\nRents are going to go up and down depending on the season. But as I&#8217;m trying to plan this out, something that I&#8217;m kind of passionate about is, okay, well, how do you buy in the low, but then get the upside out of it? And so I took all these markets and I was looking at, okay, what&#8217;s the year over year medium home price gain on these? What markets are going up and going down? And I&#8217;m looking for the markets that are declining right now but still getting the rent growth. And that&#8217;s kind of what we&#8217;re feeling in Seattle a little bit. In Seattle we&#8217;re seeing that rent growth was up 1.8%, but the median home price is down 1.6%. And that&#8217;s how we can kind of create some more cashflow in these markets. And out of all the cities in a lower 10, it was kind of bizarre.<br \/>\nI was looking at Tampa, for example, median home prices up 4.2%, but rents are down 1.4%. And so randomly out of all the growth, San Francisco hit a 13.94% growth, median home growth was up 19% year over year. Does that sound right?<\/p>\n<p>Dave:<br \/>\nIt&#8217;s just AI boom, I think. I think people have a lot of money there and a lot of people are moving there for AI. I feel like San Francisco is like on its own island out there. It&#8217;s not an island. I don&#8217;t mean that geographically. It&#8217;s just different than everywhere else.<\/p>\n<p>James:<br \/>\nI mean, those are huge numbers. I mean, the one thing I like is Seattle kind of gets dragged up with it typically, but we&#8217;re not seeing that right now. But the areas that were the most attractive to me is like, what can you buy on the cheap? So areas like Oakland, for example, they are down 3.3% median home price, but the rents are up 5%.<\/p>\n<p>Dave:<br \/>\nBetter cash flow.<\/p>\n<p>James:<br \/>\nThere&#8217;s cashflow, right? So that&#8217;s how you find the cash flow. I&#8217;m like, where can I find the cash flow that has the upside that has growth, it has not only economic growth, but what can you buy on a dip? And that&#8217;s really what I&#8217;ve been looking at most. And even in Seattle, what we were talking about was like, you can find properties now on a major dip because the demand&#8217;s down and the rent growth is going. I think Seattle is going to actually jump a lot further than 1.8%. I think we&#8217;re going to get into two, 3% in the next 12 months because rents are flying right now. In a market and when we have inflation and things are flat, how do we find the pop? And that&#8217;s kind of what I&#8217;m starting to look at is, okay, what is down, but what also has massive rent growth up?<br \/>\nAnd I mean, just some of these numbers were just kind of shocking to me. The rent growth, San Francisco, New York, everyone was predicting everyone&#8217;s leaving, rent&#8217;s going to fall down, but we&#8217;re still seeing these steady growths and most of the time the median home price is going up, but then there&#8217;s this very small, there&#8217;s only two markets on this list where it&#8217;s going down but the rents are going up at the same time. And so I do think this is a good opportunity to build out a portfolio to get some equity gains.<\/p>\n<p>Dave:<br \/>\nI do think just like the big picture thing, even in markets like in the Midwest markets I&#8217;ve invested in that are up on paper, there are better deals in those markets too. The stuff that needs work is going down, even though the headline big<\/p>\n<p>Henry:<br \/>\nPicture<\/p>\n<p>Dave:<br \/>\nMedian home sale price is going up. So if you&#8217;re willing to buy, do a burr, do value add, the rent to price ratio on acquisitions is getting better. I just think I&#8217;m seeing that sort of like across the board and I know it&#8217;s still not great. It&#8217;s not 2015, but that is the silver lining of the situation we&#8217;re in right now.<\/p>\n<p>Kathy:<br \/>\nYeah. And we&#8217;ll probably continue to be so now that we&#8217;re seeing inflation and rates going up, there&#8217;ll probably be more opportunity if you can be a buyer.<\/p>\n<p>James:<br \/>\nWell, I mean, we&#8217;re definitely seeing renter demand is substantially higher than it was 18 months ago. And I think that&#8217;s part of it. Everyone starts rushing towards one market, start looking at the ones where not. And that&#8217;s why I keep looking at Austin because I&#8217;m like,<\/p>\n<p>Henry:<br \/>\nAll right, this<\/p>\n<p>James:<br \/>\nThing has just been skidding out. It&#8217;s<\/p>\n<p>Henry:<br \/>\nGoing to come back for<\/p>\n<p>James:<br \/>\nToo long. No one likes it. And it&#8217;s like, well, I might need to take a trip out to Austin.<\/p>\n<p>Henry:<br \/>\nAustin, Phoenix, I think those are places with great opportunity to get in now where you know it&#8217;s going to come back.<\/p>\n<p>Dave:<br \/>\nThe challenge in those markets though is that it&#8217;s hard to get them to cashflow to sit on it. I&#8217;d take break even in a market like that. So if you could just basically bank it and wait for it. It&#8217;s speculation. It&#8217;s risky for everyone out there. Not saying this is the most conservative approach, but in a market, if you know it well, you could absolutely do that. But I think the problem is a lot of them you&#8217;re going to have to come out of pocket to carry, which adds a lot of risk to it. But if you could find something break even in Austin right now, I&#8217;d probably buy it.<\/p>\n<p>James:<br \/>\nLet&#8217;s buy a value ad. That&#8217;s where you got to buy fixers, create the equity and let it in, let it grow.<\/p>\n<p>Dave:<br \/>\nAll right. Well, good luck to you, James, with your 15 properties you&#8217;re listing, Kathy and your negotiate. Henry, all the deals you&#8217;re working on. Hope you all are navigating the confusing market that we&#8217;re seeing right now. But as you&#8217;ve heard in this episode with confusion often comes opportunity. It&#8217;s about having the discipline, staying informed and making sure that you make good disciplined moves in this kind of market. Hopefully this episode has helped you do just that and we&#8217;ll be back with more episodes like this in just a couple days. James, Kathy, Henry, thanks for being here. We&#8217;ll see you all next time.<\/p>\n<\/div>\n<h2 id=\"watch-the-episode-here\">Watch the Episode Here<\/h2>\n<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/jlJTjoGGNDY?si=u9IhR1FOtltq5Sn_\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>Help Us Out!<\/h2>\n<p>Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found <a href=\"https:\/\/www.biggerpockets.com\/forums\/25\/topics\/161423-do-you-listen-to-the-bp-podcast\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>. Thanks! We really appreciate it!<\/p>\n<h2>In This Episode We Cover<\/h2>\n<div class=\"relative width-full grid items-start css-mvxb92\">\n<div class=\"width-full height-full \" data-testid=\"page-element:cellEditor\" data-elementtype=\"cellEditor\">\n<div class=\"\">\n<div id=\"pageCellLabelPair\" class=\"\" aria-busy=\"false\" data-tutorial-selector-id=\"pageCellLabelPairPodcastDescription\" data-testid=\"stackedLabel\">\n<div data-testid=\"cell-editor\" data-readonly=\"true\" data-columntype=\"richText\">\n<div class=\"flex-auto flex baymax\">\n<div class=\"width-full\">\n<div class=\"flex-auto relative baymax quillWrapper readFirstRichTextCellEditor matchFormModeV2RichTextCellEditor readOnly fullyReadOnly\">\n<ul>\n<li><strong>Inflation <\/strong>surges, but what <strong>effect <\/strong>will it have <strong>on mortgage rates<\/strong>?<\/li>\n<li>The <strong>cities that saw the highest rent increases in 2026<\/strong> (and where rents are falling)<\/li>\n<li>The <strong>newest passive investing \u201cscam\u201d<\/strong> that\u2019s costing real estate investors millions<\/li>\n<li><strong>Big buyers aren\u2019t getting banned?<\/strong> A new update to the latest housing bill<\/li>\n<li>The argument for the <strong>Fed <\/strong>reversing course and <strong>raising rates<\/strong> once again<\/li>\n<li>And <strong>So<\/strong> Much More!<\/li>\n<\/ul>\n<h2>Links from the Show<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<ul>\n<li><a href=\"https:\/\/www.fundrise.com\/bpmarket\" target=\"_blank\" rel=\"noopener\">Join the Future of Real Estate Investing with Fundrise<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/signup?utm_source=owned_media\" target=\"_blank\" rel=\"noopener\">Join BiggerPockets for FREE<\/a><\/li>\n<li><a href=\"https:\/\/biggerpockets.com\/bpcon2026\" target=\"_blank\" rel=\"noopener\">Join us at the BiggerPockets Conference October 2-4 in Orlando. Buy tickets<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/email-subscribe?utm_source=youtube&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\">Sign Up for the On the Market Newsletter<\/a><\/li>\n<li><a href=\"http:\/\/biggerpockets.com\/findlenders\" target=\"_blank\" rel=\"noopener\">Find Investor-Friendly Lenders<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/users\/davem27?utm_source=youtube&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\">Dave&#8217;s BiggerPockets Profile<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/users\/henryw22?utm_source=youtube&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\">Henry&#8217;s BiggerPockets Profile<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/users\/jdainflips?utm_source=youtube&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\">James&#8217; BiggerPockets Profile<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/users\/kfettke?utm_source=youtube&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\">Kathy&#8217;s BiggerPockets Profile<\/a><\/li>\n<li><a href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-399?utm_source=podcast&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\"><em>On the Market <\/em>399 &#8211; Buying (and Building) Houses Could Get a LOT Easier (New Bill)<\/a><\/li>\n<li><a href=\"https:\/\/therealdeal.com\/national\/2026\/05\/15\/house-axes-build-to-rent-provision-from-amended-senate-bill\/\" target=\"_blank\" rel=\"noopener\"><em>TheRealDeal<\/em>: House knocks build-to-rent provision from amended Senate bill<\/a><\/li>\n<li><a href=\"https:\/\/apnews.com\/article\/judge-real-estate-scam-arrest-brooklyn-7d590d695fadfe912dcbfa3ecdb8c155\" target=\"_blank\" rel=\"noopener\"><em>AP News<\/em>: Ex-Brooklyn judge accused of swindling real estate investors out of millions of dollars<\/a><\/li>\n<li><a href=\"https:\/\/smartasset.com\/data-studies\/rent-increases-2026\" target=\"_blank\" rel=\"noopener\"><em>SmartAsset<\/em>: Where Rent Increased and Decreased Most \u2013 2026 Study<\/a><\/li>\n<li><a href=\"https:\/\/store.biggerpockets.com\/products\/real-estate-by-the-numbers?utm_source=youtube&amp;utm_medium=description&amp;utm_campaign=none\" target=\"_blank\" rel=\"noopener\">Grab Dave\u2019s Book, <em>Real Estate by the Numbers<\/em><\/a><\/li>\n<\/ul>\n<p><em>Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em><a href=\"mailto:advertise@biggerpockets.com\" target=\"_blank\" rel=\"noopener noreferrer\"><em>advertise@biggerpockets.com<\/em><\/a><em>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Just when we thought it was handled, inflation is starting to surge back\u2014and mortgage rates are already adjusting fast. But, for real estate investors, there\u2019s a silver lining. Some markets [&hellip;]<\/p>\n","protected":false},"author":613609,"featured_media":187926,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7320],"tags":[],"class_list":["post-187921","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-on-the-market-show-notes"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/187921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613609"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=187921"}],"version-history":[{"count":3,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/187921\/revisions"}],"predecessor-version":[{"id":187925,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/187921\/revisions\/187925"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/187926"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=187921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=187921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=187921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}