2027 Housing Market Insights for Investors

Mid-term elections & new policies will impact the market. Here’s what you need to know to prepare. 

As investors are wrapping up the year seeing through Q4 and strategizing how to keep the momentum going into 2027, key shifts are already happening in the housing market. In the new year, investors are going to be seeing less competition from big companies and more discounted properties. 

If you’re looking to grow your portfolio and scale your success even further into the new year, now is the time to plan, strategize, and prepare for the shifts in the market. Understanding where the housing market is going and knowing how to pivot in favor of these changes will ultimately make or break any investment strategy.  

How are Mortgage Rates Changing in 2027?

According to National Mortgage News, rates have fallen three weeks in a row. While rates peaked at around 7.4% in mid-October, they have since been in continual decline, now sitting at 7.18%. This is important to note, because even small drops in rates can lower monthly payments on 30-year conventional DSCR loans.  

Smart buyers and investors know how to act quickly when rates improve, causing an immediately favorable response in demand.  

While MBA expects rates to stay above 7%, Goldman Sachs actually expects rates to ease to about 6.4%. Should this happen, it could support a gradual recovery in the second half of 2027.  

Especially in today’s political climate, it’s also worth noting the near direct influence that the mid-term elections had and will have on rates for this year and going into 2027.  

How are Mid-Term Elections Impacting Rates?

With both the Senate and the House of Representatives having flipped to Democratic control, the election directly helped with November’s decrease in rates. The bond market’s reaction pushed the 10-year Treasury yield down to 4.83%, which directly correlates to the overall cost of capital.  

Election influence also extends into oil prices; because post-election prices fell sharply, inflation expectations are starting to ease. If this level of certainty continues, this could also lead to rates drifting even lower and mortgage rates softening as time goes on.  

While the election moved mortgage rates and housing stocks early on, we won’t be seeing the bulk of its effect until 2027, when the new Congress will be sworn in and new policies will begin to be enacted.  

How is Rental Demand Changing for 2027?

As far as renting goes, rental demand across the U.S. is up 19.2% from last year, according to Zillow, as buying costs rise nearly twice as fast as rent. Many of these renters are looking for a single-family home with room to settle in, which is why demand for single-family rentals jumped 21.6% (more than twice the growth we’ve seen in multifamily). 

Likewise, the start of January also brings into effect the 21st Century ROAD to Housing Act, which was passed earlier in 2026. Opportunities for small to mid-size investors will rise as larger-scale investment companies will have a specific limit on the amount of properties they can purchase, essentially removing them as competition in certain markets.  

What is the 21st Century ROAD to Housing Act?

The 21st Century ROAD to Housing Act is a federal effort to address the national housing supply shortage by reducing the barriers that slow residential construction: zoning restrictions, permitting delays, and policies that limit density. 

Starting January 7th of 2027, large-scale companies that own 350 single-family homes or more are going to be restricted and face more limitations when it comes to purchasing or acquiring additional properties. This should hopefully lead to housing availability improving, albeit gradually, as housing construction increases. Some housing markets may also see less involvement from larger institutional investors, which could lower competition in certain markets. 

These changes won’t happen overnight, and local implementation will take time—but the directional shift is clear. With the new restrictions targeting specifically large-scale institutional investors, small to mid-sized investors who work with ABL would be able to take advantage of even more new construction and build-to-rent opportunities.   

How Investors Should Plan for 2027

While the market always holds some level of uncertainty, smart investors know the actionable steps they can take to ensure another successful year. With current rates, policies, and current new year predictions in mind, here are a few things investors should plan around for 2027.  

Underwrite next year’s deals for today’s market.

Redfin reports that U.S. home prices were down 0.35% compared to last year, selling for a median price of $388,634, while appreciation has slowed over the past few years. And with rental demand for single-family homes on the rise, going into the new year with this in mind can help you target highly desired properties with a stronger margin for profit. If the deals you’re underwriting now work in today’s market, they will likely continue to work in future market predictions with more certainty.  

Don’t count on appreciation.

Every major forecast has 2027 price growth under about 1%, so a flip or value-add deal has to make money from the purchase discount and the renovation alone. Now is the time to buy properties at a discount and plan for longer holds, as homes are taking longer to sell. It would benefit investors of all levels to budget extra months of holding costs and keep an extension option in loan terms. Refinancing into a long-term DSCR loan could also be an option for those looking to rent out their properties instead.  

Consider looking into buying distressed properties.

Distressed properties are rising from historically low levels, and REOs are up sharply year-over-year, resulting in more auction and bank-owned inventory than in recent years. These properties offer incredible opportunities for savvy investors, as they are more often than not sold below market value. Even with the cost added for repairs and renovations, the right property can still create a higher return on investment when an investor does their research and plans accordingly. To compete for distressed properties, investors generally need fast financing and the ability to close quickly. 

Prepare for 2027 by Partnering with ABL

Shifts in the housing market and staying ahead of the game as an investor means working with a hard money lender that moves as fast as your deals. Whether you’re purchasing a distressed property, investing in rentals or fix-and-flips, or starting a ground-up construction project, ABL’s got you covered. At Asset Based Lending, you’ll work with a human-first team of loan experts ready to offer loan programs tailored directly to your investment needs.  

With 2026 coming to a close and 2027 being right around the corner, it’s never too early to get pre-qualified for your next big deal. Filling out our pre-qualification form only takes a few minutes and minimal paperwork—we won’t ever need tax documents or income verification. It’ll only take 24-48 hours for you to hear back from us, and if your deal is a good fit, we can get you to close in as few as 20 days.  

Ready to get started? Pre-qualify with Asset Based Lending today!