CHM Blog

Appreciating non-appreciation

Real estate or the stock market? For most Americans building long-term wealth it has made sense to keep coming back to the same two choices. The math simply felt straightforward. In 2026, however, it doesn’t fly.

Writing for The Street, Joey Linn reports that mortgage rates have climbed to a range that has investor sentiment slipping noticeably, evidenced by BiggerPockets' forward-looking Pulse Index dropping from 150 in Q1 to 112 in Q2. Meanwhile, the S&P 500 keeps performing, making every dollar parked on the sidelines feel a tad more expensive by the day.

But Dave Meyer, BiggerPockets’ chief investment officer, is not ready to concede the argument to Wall Street. In an exclusive interview with Linn, Meyer made a case that cuts against the current mood — and against the way most people defend real estate in the first place.

"All these things still create a return that I believe will average better than the S&P 500 going forward, even without appreciation," Meyer told The Street.

That last part is the clincher. Most real estate arguments lean heavily on rising home values. Meyer sets appreciation aside entirely and focuses on the four things investors can actually control: cash flow, tax benefits, amortization, and principal paydown. Those pillars, he says, are enough to outperform the market on their own. If home values rise on top of that, great — but that is upside, not the foundation.

If you think about it, that’s a meaningful reframe. The COVID-era price surge made appreciation feel like a guarantee. The cooling market of 2026 has turned that same variable into a source of anxiety. Meyer's argument removes it from the equation altogether, which changes the entire conversation.

He also pointed out this is not a new way of thinking, pointing out how experienced investors from earlier decades never factored appreciation into their calculations to begin with. "And I think that's a wise course of action for investors in today's day and age."

The broader point? Staying focused on what you can control when the market gets noisy. Rates shift. Sentiment swings. Home prices go up and then cool off. But cash flow, tax advantages, and debt paydown do not disappear when the headlines turn negative.

For investors willing to look past the current moment, the long-term math on real estate has not changed — even if the short-term mood has.

TheStreet, TBWS

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Higher

Mortgage rates are under heavy pressure today. The MBS market worsened by -30 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Jobs, and 3) The Fed.

1) Geopolitical: Iran and Oil Prices will continue to be a significant driver for rates this week as the headlines will generate more market volatility than economic data will.

2) Jobs: We get a ton of job and wage related data all week long culminating in Big Jobs Friday. These include: JOLTS, ISM, ADP, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, NonFarm Payrolls, Unemployment Rate, Average Hourly Earnings and more.

3) The Fed: We will hear from a ton of Federal Reserve representatives this week. The bond market will give more weight to voting members. Gov Waller will get a lot of attention because he was calling for a rate cut and now seems to have moved off of that position.

This Week's Potential Volatility: High

This morning markets have started under heavy pressure. Volatility has started at moderate to high levels and could easily become high later in the week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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