When Participation Drops, Advantage Rises.

[Rob Bergeron]

There’s a difference between price data and behavior data.

Price data lags.

Behavior shows up first.

Right now, behavior is flashing.

Google searches for “can’t sell house” have surged to the highest level in over a decade.

That’s not inventory talking.

That’s frustration talking.

Now stack that on top of the hard numbers.

Nationally:

– Pending home sales just printed an all-time low going back to 2021.
– There are materially more sellers than buyers in the market. 600,000 more home sellers than buyers. The largest gap ever recorded.
– 3% of all mortgages are at least 25% underwater, up from 2.5% a year ago.
– Foreclosure starts are up 32% year over year.

Deep negative equity is concentrated in:

Louisiana
Mississippi
Kentucky
Iowa
Arkansas

Kentucky is on that list.

Equity-rich homes — where total debt is less than half the property value — slipped from 46.1% to 44.6% in one quarter. Not collapse. Rebalancing.

Now look at multifamily.

Freddie Mac serious multifamily delinquencies are at 0.48%, the highest level in over 21 years.

Fannie Mae serious multifamily delinquencies are at 0.75%, the highest since 2021.

Both have doubled in the last two years.

From 2014 to 2019, multifamily 90+ day delinquency rates averaged between 0.01% and 0.10%.

For comparison, the 2008 peak was roughly 0.80%.

We’re not in crisis territory.

But pressure is clearly building — especially in leveraged assets facing higher refinancing costs.

Now bring it local.

Greater Louisville market.

February 15–21:

Listings
2025: 320
2026: 391

Sold
2025: 183
2026: 171

Year-to-date:

Listings
2025: 2,527
2026: 2,947

Sales
2025: 1,504
2026: 1,421

More supply.

Fewer closings.

And now rising search behavior from sellers who can’t move inventory.

This is how leverage shifts.

In 2021, sellers dictated terms.

In 2026, math dictates terms.

Add in one more structural shift.

There are now more 6%+ mortgages outstanding than sub-3% mortgages.

The share of 6%+ loans has climbed above 21% — the highest since 2015 — and now exceeds the share of ultra-low-rate mortgages (sub 3% interest).

That changes mobility over time.

When a larger share of owners are already at 6%+, the psychological barrier to selling weakens. The lock-in effect doesn’t disappear overnight — but it softens.

So what does this environment reward?

Execution.

Lower cash offers that actually close.
Hard money with clean, tight timelines.
Seller financing where equity is thin but the payment structure works.

You will not win every negotiation.

You don’t need to.

You need alignment with sellers whose incentives have shifted.

Spring historically brings renewed energy to the market. In March, home sales typically jump around 33.5%, driven by better weather and anticipation of summer moves. When demand picks up, timelines compress and leverage narrows.

30 year fixed rate mortgages just hit 5.76% 👀