Inflation isn’t fully under control yet. The Fed’s preferred measure shows prices rose 2.8% year-over-year in November, up from 2.6% the year before. It’s a small move, but an important signal: inflation remains sticky.
With employment still strong, the Fed has little incentive to rush into rate cuts. Unless unemployment rises meaningfully, any cuts are likely delayed until late spring or summer, and even then, probably limited. The market is currently pricing in only two quarter-point cuts this year.
For buyers:
This environment continues to reward conservative underwriting. Deals can still work—but only with realistic ARVs, sufficient margin, and enough room for higher carry costs. Counting on rapid rate relief is a risky assumption.
For wholesalers:
Buyers are underwriting more defensively. Deals priced off peak comps or thin spreads are increasingly hard to execute. The cleanest deals today are the ones that leave room for time, rates, and profit.
If growth accelerates in the coming months, that only strengthens the case for a higher-for-longer rate backdrop.
Closing thought:
This is a market where discipline wins and optimism gets stress-tested.
Question for the room:
👉 Are you underwriting 2026 deals assuming rate cuts? or assuming rates stay higher longer?
