BiggerPockets Real Estate Podcast: October 2025 Housing Market Update

Episode Title: Home Prices Could “Stall” for Years | October 2025 Housing Market Update
Host: Dave Meyer (Head of Real Estate, BiggerPockets)
Release Date: October 24, 2025

Overview

This episode provides a comprehensive update on the U.S. housing market as of October 2025, with host Dave Meyer diving deep into the nuanced trends behind apparent price stagnation. Dave explores the critical difference between nominal (not inflation-adjusted) and real (inflation-adjusted) home prices, analyzes inventory and rent trends, and explains how investors can adapt strategies in a market where growth is stalling in real terms. The tone is candid, data-driven, and focused on equipping real estate investors to find opportunity even in a sluggish or correcting market.

Key Discussion Points & Insights

1. Nominal vs. Real Home Prices

• Nominal Prices: What you see on Zillow, Redfin, etc.—not adjusted for inflation.
  • “When you look at nominal prices, those are actually still up right now, depending on who you ask. ... housing market still doing okay. Like that's not exciting, exceptional growth.” (02:00)
• Real Prices: Adjusted for inflation—provides a more accurate sense of purchasing power and actual return.
  • “When you look at housing in that other way, in inflation adjusted real terms, the story is different. ... prices in real terms are about 3% below their peak, which actually happened back in 2022.” (03:30)
  • Nominal prices are up 1.2% (Case-Shiller), 2% (Redfin), or flat (Zillow), but real prices are about 3% below their 2022 peak.

Why Real Prices Matter for Investors

• “As an investor, I really care about whether my home price growth is at least beating inflation. ... You as an investor want your property, your asset values to at least go up as quickly as inflation. And that's not happening right now with housing.” (05:00)
• Since 2006, real (inflation-adjusted) home prices are only up 10%, despite huge nominal increases. Much of what looks like appreciation is just inflation.
• “Appreciation might look good on paper, but when it comes to actual spending power and financial freedom, it's not as much as people think.” (08:10)

Historical Perspective

• Historically, housing offers about 1-1.5% average real return per year after accounting for inflation, with the rest coming from other benefits (cash flow, tax, leverage).
• Dave cautions against investing solely for market appreciation and instead recommends focusing on cash flow, value-add, amortization, and tax benefits.

2. Forecast: “Stalling” Real Home Prices

• Dave predicts that real home prices are likely to remain flat or decrease for several years—even if nominal prices see small gains.
  • “In the next few years, I think it is very likely that we see real home prices continue to stall out. ... Even if you see prices up 1%, if inflation's at 3%, that is a negative real return.” (10:00)
• Possible scenarios:
  • Modest nominal price increases + moderate inflation = negative real returns.
  • Modest nominal price declines + 2-3% inflation = negative 4-6% real returns.
• “Investing for market appreciation, not forced appreciation, is a bad idea in my opinion in today's market.” (11:30)
• Historic comps:
  • In the 1970s, real prices took 6.5 years to recover from a similar “stall.”
  • In the 1990s, recovery took about 11 years.

3. Understanding Today’s Market Dynamics

Affordability Crisis — The Core Issue

• The housing market isn’t crashing, but it’s constrained by exceedingly low affordability.
  • “The problem with the housing market is not that prices are going to go into a freefall. ... more people cannot afford to buy homes. And that is constraining demand, and ... supply ... leading to this weird, sluggish market.” (14:30)
• By all major metrics, affordability is at its lowest since the early 1980s.
• Inventory is up 17% year-over-year (nationally), but—relative to pre-pandemic 2019 levels—it’s still below “normal.”
  • “Inventory is about 17% higher than it was last year. ... But ... [relative to 2019] it’s still below that. ... People freaking out about inventory is a little overblown.” (16:30)
• Price softness is due to rising inventory (more supply/new listings), not collapsing demand.
• This dynamic creates a “softer market where prices are gradually coming down,” even in the hottest markets.

4. Rents & Rental Market Update

• Rents nationally range from +4% to -1% year-over-year, a major slowdown from the 10-30% surges seen during the pandemic.
  • “Almost every market in the country, the rate at which rent is growing is declining.” (21:15)
• The largest rent weakness is in multifamily, due to a wave of new construction hitting the market—what Dave calls a “historic level of deliveries.”
  • “Most of the weakness in rent ... comes from multifamily. ... We are still in a historic level of deliveries on multifamily.” (22:10)
• The weakening labor market (e.g., jobs, consumer confidence) is also dampening rent growth and household formation.
  • “When people feel constrained financially, they don’t go out and rent a new apartment. ... when there’s less household formation, that means there’s less demand for rental units.” (25:10)
• Dave is more cautious about a strong rental rebound in 2026 due to ongoing labor market weakness and the possible impact of AI on hiring.

5. How Investors Should Adjust Their Strategy

Key Takeaway: Don’t Fear a Sluggish Market—Adapt to It

• “I really want to stress ... The market is not your enemy. ... Don’t try and time the market. This data is there not to scare you, but to guide you.” (30:10)
• The current market—declining (real) prices and flat rents—offers an opportunity to buy better assets at more attractive prices and to be more selective.
  • “This is, I feel like, the thing that real estate investors have been asking for for years. ... These are the opportunities that come with a housing correction.” (32:20)
• Flipping and short-term strategies are now riskier (“I only recommend flipping ... for people who are very experienced ... or willing to take a lot of risk.”) (33:10)
• Buy-and-hold is preferable, but adjust your short-term expectations—focus on cash flow and long-term upside, not overnight riches.
  • “If you need to generate an amazing cash on cash return and you want on paper growth every single year that you hold your property—probably not the right time for you to invest.” (34:00)
• Institutional investors plan for 5–10 year hold periods—retail investors should as well.

Notable Market Opportunities

• Investors can now prioritize “precision over scale” and be selective (“This is the first time in years I feel like I can be picky.") (36:00)
• Deals meeting the 1% rule (monthly rent ≈ 1% of purchase price) are reappearing in some markets for the first time since 2019.

Notable Quotes

• “A weakening housing market can actually mean better buying opportunities than we’ve seen in years.” (00:10)
• “As an investor, I really care about whether my home price growth is at least beating inflation ... you don’t want to make an investment ... that is going to appreciate lower than the pace of inflation.” (05:00)
• “Much of what you see as price increase is actually just inflation.” (07:00)
• “Even if you see prices up 1%, if inflation’s at 3%, that is a negative real return. That means prices in reality are actually pretty stagnant right now.” (10:20)
• “The housing market is just in an affordability crisis ... more people cannot afford to buy homes. That is constraining demand, and it is also constraining supply.” (14:40)
• “Flipping is always risky. ... if you need to sell something quickly in this kind of market, there’s a lot of uncertainty about that.” (33:10)
• “If you go into this market with the mindset of thinking, ‘I am just trying to buy great assets at great prices and I’m going to hold on to them for five to ten years so that I can capture the next spurt of real price growth,’ that’s the right mindset.” (35:10)
• “This is the time that you get to be a selective buyer. ... Value precision over scale. ... There is a very good chance that you’re going to be very happy with the decisions you make right now, five to ten years from now.” (36:30)

Timestamps for Important Segments

• 00:00–11:30: Deep dive—Home prices: nominal vs. real, long-term context, 1970s/1990s comps
• 14:24–20:00: Why prices are stalling—The affordability crisis, inventory, demand/supply dynamics, implications for investors
• 20:00–27:30: Rent trends—Multifamily supply glut, slowing household formation, labor market’s chilling effect, what to expect in 2026
• 29:56–37:30: Actionable advice—How to invest in a stagnant market, why now favors buy-and-hold, precision over scale, adjusting expectations

Conclusion & Actionable Takeaways

• Focus on long-term buy-and-hold strategies; look for deals with solid cash flow and strong fundamentals.
• Don’t let the headlines scare you: price softness is not a sign of collapse but an opportunity for selective buying.
• Be patient: returns will likely take 5–10 years; set appropriate expectations.
• Be selective: higher inventory and softening markets mean investors can be picky and find better-quality assets.
• Monitor rent and labor trends: especially in markets affected by multifamily oversupply or slow job growth.

For questions, connect with Dave Meyer on Instagram @thedatadeli, YouTube, or Spotify comments.