2025 was SO last year (but let’s talk about it anyway)

If you thought the Bay Area market finally fell apart in 2025… well, Redfin’s data did not get the memo.

San Jose held onto its crown as the most expensive major metro in the country. The median sale price averaged $1.62M, rose 3.3% year over year, and peaked at $1.7M in April. Homes moved fast too, averaging just 17 days on market. Expensive and decisive!

San Francisco followed at $1.52M, while everyone debated whether it’s “back.” Inventory barely budged, homes sold in about 3 weeks, and a quarter of purchases were made by investors. Good homes moved, while questionable ones waited, and condos were still a mixed bag.

Oakland landed around $930k, which nationally sounds crazy but locally feels totally normal. Inventory jumped 35.4% YoY, thanks mostly to sitting condos, yet homes still sold in 23.5 days as single-family homes did the heavy lifting. More choice didn’t mean cheaper, it just meant buyers had the luxury of being pickier.

The six most expensive metros in the U.S. were ALL in California. The takeaway: prices here are already high (duh), the good stuff is still scarce, and demand doesn’t even need to be crazy to keep things moving.

Also, based on nothing scientific except vibes and anecdotal evidence, 2026 already seems to be off to a hot start!

Only costs $200B to bring rates down

If you can’t control the Fed, just take lots of shortcuts around them.

Last week, trump ordered Fannie Mae and Freddie Mac — the two government-backed giants behind most home loans — to buy up to $200 billion in mortgage bonds. (I, too, would like a government-sponsored shopping spree.)

The idea is that when they buy more of these bonds, fewer are left floating around. Scarcity pushes prices up, and when bond prices rise, mortgage rates tend to come down (or at least stop climbing so aggressively).

Markets liked this news, so rates went down and real estate stocks went up. For a brief, fever-dream moment, rates dropped below 6% for the first time in three years.

Supporters say this matters because the Fed has stepped back from buying mortgage bonds, and if no one fills that role, the market can get shaky. Critics are basically asking: how much is too much, is it worth the risk, and hellooo have we learned nothing from 2008? (direct quote, probably)

Also worth noting: the mortgage bond market is huuge. $200 billion is meaningful, but it’s not a magic wand. Still, for buyers looking right now, every little bit helps. Even a half-point drop can be enough to pull some people off the sidelines.

But of course, there’s a catch. Lower rates make borrowing easier, not homes more plentiful. So when cheaper money pulls a new wave of buyers into a market that’s already short on supply, we don’t get “affordable.” We get more competition. Which eventually leads to higher prices. Today you save on interest. (yay) Tomorrow you overpay for the house. (boo)

Remember 2021? That.

The villain is clear. The math is not.

Okay, now for trump’s (other) new proposal: ban large institutional investors from buying more single-family homes. “People live in homes. Corporations don’t.”

Sounds great. Fewer Wall Street buyers. More homes for families and first-time buyers. A clearly labeled villain and a refreshingly simple fix. What’s not to love?

Buuuut institutions (owners of 100+ homes) only make up about 1% of the total single-family housing stock. And their footprint is even smaller in high-cost markets like the Bay Area. So it all sounds like a big deal, but it probably doesn’t change much. At least not outside of markets like Phoenix, Atlanta, Dallas, Charlotte, Houston, and Tampa, where large investors are way more concentrated.

Most housing markets are still shaped by regular buyers, mom and pop landlords, and zoning rules that make new construction painfully slow. A ban on tomorrow’s purchases doesn’t force anyone to sell today. It doesn’t unlock inventory. If the core problem is scarcity, you can’t regulate your way out of it without… you know, building more houses. So while this proposal scratches a very satisfying affordability itch, the real issue always comes back to the same old boring one: we didn’t build enough homes.

(hi, my name is michaela, and i’m a broken record.)