All about Life & Real Estate in Silicon Valley – Broker Michael Koo's Blog.

Home price growth needs to stabilize while mortgage rates drop below six percent.

If incomes grow 3.9% annually and rates fall to 5.5%, normalization depends on price trends.

Market could normalize by November 2027 if home prices decline 2% yearly.

If home prices stay flat, the market may normalize by January 2029.

Rising home prices and high rates could delay housing normalization until 2032–2034.

Slide 1
Experts predict mortgage rates will hover around mid-6% through most of 2026.

Slide 2
Fannie Mae forecasts 6.5% by end-2025, easing to 6.1% by end-2026.

Slide 3
MBA and NAR project 6.7% by late 2025, gradually dipping to 6.0–6.5% in 2026.

Slide 4
NAHB sees 6.6% now, moving slowly down to 6.32% next year.

Slide 5
Deloitte and Goldman Sachs tie rates to Treasury yields, expecting 6.0–6.2% for 2026.

Home prices expected to grow modestly in 2026 after slower activity in 2025.

Tech employment trends continue influencing demand in Bay Area and Silicon Valley.

Inventory remains tight in Los Angeles and coastal metros, limiting sales volume.

Inland markets like Sacramento show more affordability-driven migration.

The Fed’s first 2025 rate cut pushed HELOCs to 7.88% and home equity loans to 8.19%.
By year’s end, HELOCs may hit 7.3%, loans near 7.9%.

Total Fed cuts from Sep 2024–Dec 2025 could reach 175 basis points, further lowering rates.

Homeowner equity totals $17.5 trillion, about $307,000 per household.

Home equity lending surged 16% last quarter, $52 billion pulled out.