Expect higher mortgage rates for the rest of the year

Who are you targeting

One of the biggest mistakes agents make is trying to speak to everyone. When your prospecting and messaging are too broad, your approach gets watered down, and it becomes much harder to stand out.

In today’s Foundation Plans, we tackle one of the most important questions you can ask about your business: Who are you targeting?

If you don’t have a clear answer, I’ll help you narrow it down. Because the better you understand who you’re trying to reach, the more focused — and effective — your prospecting, marketing, and overall business will become.

- James

Expect mortgage rates to remain high for the foreseeable future

Mortgage rates edged lower this week, but the relief may be short-lived. The average 30-year fixed rate slipped to 6.65% (Freddie Mac), even as turmoil in the bond market and a sharply higher forecast from Fannie Mae point to elevated borrowing costs into 2027.

Here are the key points to know:

• Rates fell, but the trend is still up. The 30-year fixed slipped from 6.67% to 6.65%, but it’s now 7 basis points above a year ago and 12 basis points higher than three months ago.

• Bond markets are flashing warning signs. The 10-year Treasury yield climbed to around 4.70%, while the 30-year Treasury hit a nearly 20-year high. With mortgage rates closely tied to the 10-year, there appears to be more upward than downward pressure on borrowing costs.

• Fannie Mae just raised its outlook significantly. It now expects the 30-year mortgage rate to average 6.8% in Q4, up from its July forecast of roughly 6.4%, with rates remaining around 6.7%–6.8% throughout 2027.

• Higher rates are already weighing on demand. July pending home sales fell 2.3% month over month and 2.2% year over year, while purchase mortgage applications dropped another 2% in the latest week.

• Buyers are getting more options — but at a price. New listings rose 1.2% week over week, the strongest increase in three months. The catch is that buyers waiting for both lower rates and more inventory may not get them at the same time.

My take

The real story isn’t the two-basis-point dip to 6.65% — it’s that the number was already stale when it was published. Freddie Mac’s rate is a backward-looking average, and the bond market is pointing toward more upward pressure ahead. Meanwhile, Fannie Mae has sharply raised its forecast, with rates now expected to hover near 6.8% through 2027. That’s less a temporary setback than a reset in expectations. And the timing couldn’t be worse for buyers: inventory is finally loosening just as financing is getting more expensive. Waiting for both supply and rates to improve at the same time is starting to look less like a strategy and more like a gamble.

Zillow's Unlock 2026 conference: registration is open

Zillow's Unlock 2026 is worth getting on your calendar now. The 3-day conference brings together agents from across the country to share real strategies, not just theory, on how to grow your business in today's market. Past attendees consistently say the peer-to-peer sessions are the most valuable part - it provides practical advice they could apply the moment they get home. It's happening October 12–15 in Las Vegas, registration is now open to the public, and early access pricing is available for a limited time. Secure your spot at unlockconference.com.

Active inventory is at the highest level since 2019

Active inventory climbed toward 1.2 million this week — up 3.6% year over year and the highest level since November 2019 — even as the median listing price fell 1.3% year over year to $424,500, marking 31 straight weeks of annual declines. That’s according to Realtor.com’s latest market update.

Here are the main takeaways:

• The inventory rebound comes with a catch. Supply is at its highest point in nearly seven years, working through the pandemic-era shortage, but it's still below pre-pandemic norms — and the mix has shifted upmarket. Homes under $370,000 made up nearly half of listings in 2021; now they're just 42.2%.

• Price drops may reflect discipline, not weakness. Price per square foot held at $224, the lowest since spring. And even as list prices slide, the median price across property views has stayed flat year over year — suggesting the buyers still shopping are financially qualified and know their budgets.

• Homes are selling faster, relatively speaking. Days on market matched last year's pace — but that's actually notable, since it marks 12 straight weeks of equal-or-faster sales versus a year ago, reversing a longer stretch of slower sales dating back to late 2024.

• Sellers are more hesitant to list. New listings dipped 0.1% year over year, the second straight weekly decline, as elevated mortgage rates keep many homeowners feeling "locked in" to their current homes.

My take

The inventory shortage may finally be easing, but the affordability shortage isn’t. Nearly 1.2 million homes are now on the market — the most since 2019 — yet lower-priced homes make up a smaller share of that supply than they did just five years ago. That helps explain why more inventory and falling list prices haven’t produced a dramatic shift in the market. Buyers have more choices, but not necessarily more choices they can afford. And with mortgage rates still keeping would-be sellers on the sidelines, the market remains caught in an unusual middle ground: better supplied, more balanced, but still stubbornly expensive.

The top-performing opportunity zones in the country

Q2 2026 was a strong quarter for Opportunity Zones nationally. Of the 4,183 tracts ATTOM analyzed, 449 (10.7%) hit their highest median home value since the Great Recession began in 2008, and 1,064 tracts posted year-over-year gains of at least 10%.

But a handful of zones blew past even that pace. Below are the 10 Opportunity Zones where median home prices came closest to doubling between Q2 2025 and Q2 2026.

My take

This report ties in perfectly with our Foundation Plans theme: know who you are targeting as your client. Not every buyer wants an Opportunity Zone play, but plenty do — and as this report shows, the ones who go there can make a serious return. Here's the part agents should really lock onto: OZ investors are rarely one-and-done. They're repeat players, always scouting the next zone. So, stay close and stay useful. You're not simply landing a single deal — you're building a pipeline.

Schematics

The news that just missed the cut

• WalletHub says this state has quietly become America’s best place to live 

• How a cop turned real estate investor bought 25 homes on a $52K salary

• This broker guarantees new agents a deal in 90 days or their money back

• Mortgage lending standards are too tight, argues Pew Research Center

• Do this instead of buying leads to build your listing business

Foundation Plans

Advice from James to win the day

In my experience, most new agents and even many seasoned veterans rush into business development activities – calls, emails, postcards, social media, etc. – without a clear plan. Don’t let that happen to you. But before you start dialing, mailing, or posting, you need to answer a simple question: 

Who are you targeting? 

Before you prospect, it’s vital to answer all these questions: Are you targeting your sphere of influence? Expired listings? FSBOs? Investors? Each group requires a different message, script, and approach. Without this clarity, your outreach will be vague, and vague and unfocused outreach rarely produces results.

Today, I’m offering you a framework: a list classifying the kinds of prospects you might want to target throughout your career. It’s not exhaustive, but it is comprehensive enough to get you thinking clearly and strategically. 

As you review each category, ask yourself: How would I approach this type of client? Most agents never take the time to do this exercise. But if you want to master lead generation, this is where it begins.

1. Sellers

• Homeowners looking to sell

• FSBOs (For Sale By Owner)

• Expired Listings

• Withdrawn or cancelled listings

• Distressed homeowners (pre-foreclosure, short sale)

• Seniors downsizing or transitioning to assisted living

• Divorce or estate-related sales

• Relocation sellers

• Homebuilders offloading spec homes or completed inventory

2. Buyers 

• First-time buyers

• Move-up buyers

• Downsizing buyers

• Relocation buyers

• Investors seeking single-family or multifamily homes

• Veterans using VA loans

• FHA or low-down-payment buyers

• Renters ready to purchase

3. Investors

• Buy-and-hold rental investors

• Fix-and-flip investors

• Short-term rental investors (Airbnb, Vrbo)

• Out-of-state or international investors

• 1031 exchange buyers

• BRRRR strategy investors

• Real estate syndication groups

4. Developers & Builders

• Residential land developers

• Infill and urban redevelopment builders

• Custom home builders

• Multifamily or mixed-use developers

• Build-to-rent operators

5. Landowners

• Raw land owners looking to sell

• Farmers or heirs of agricultural land

• Owners of subdividable parcels

• Ownrs near new infrastructure or zoning changes

6. Special Circumstance Prospects

• Probate/estate executors

• Divorce attorneys (referral source)

• Bankruptcy trustees or clients

• Code violation property owners

• Tax default/tax lien property owners

7. Referral Sources

• Past clients and sphere of influence

• Lenders/mortgage brokers

• CPAs and financial planners

• Divorce and estate attorneys

• Contractors and service providers

• Other agents (e.g., out-of-area referrals)

If there’s a prospect type you think belongs on this list, message me. I’d love to hear from you.

In the meantime, review each category carefully and ask yourself: How would I market to this group? Your answers will help you get even more out of the prospecting strategies I have been sharing and will be sharing in the weeks ahead.

Breezy

Feature of the Week — Efficiency

Breezy runs alongside real estate agents throughout the day and acts as an AI personal assistant in real time.

At a high level, Breezy does these things:

• Captures and organizes conversations so no follow-up or detail gets lost

• Generates branded comps and reports on the fly, ready for clients

• Keeps your pipeline current automatically, without manual updating

• Reveals how you can reposition and develop your property through proprietary software we call Underbuilt

Instead of agents juggling spreadsheets, notes apps, CRM updates, and presentation tools, Breezy brings those workflows together.

Get Breezy here!

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“Your time is limited, so don’t waste it living someone else’s life.” — Steve Jobs

Each day is a gift – a chance to live the life you want. Ruthlessly focus on your goals. Don’t let your past or the fear of being judged distract or paralyze you. Choose to live with an integrity that you can be proud of.

Have a wonderful weekend, and I’ll see you back here next Friday!

- James