Sellers pulled back in May

Be prepared

I was never a Boy Scout, but their motto has always stuck with me: Be prepared.

That's the mindset agents need right now.

AI is already changing how buyers search for homes, how decisions get made, and what clients expect when they walk through the door. The shift isn't coming. It's here.

I don't believe AI will replace agents. But I do believe agents who ignore it risk being left behind.

To help make sense of what's coming, I sat down with Brendan Wallace, CEO and CIO of Fifth Wall, a venture capital firm managing the largest fund focused on real estate technology, to talk about where the industry is heading and what agents should be doing today.

Scroll down to today's Foundation Plans. You’ll want to watch this one.

- James

May home sales and news listings came in weaker than expected

The spring housing market lost some momentum in May. New listings — which typically peak in May and June — fell 0.8% from April and were down 4.1% from a year ago, according to Zillow.

Here’s what else Zillow reports:

• Sales slipped from a year ago: Existing-home sales fell 2.9% year over year, a sign that higher borrowing costs continue to weigh on buyer demand.

• Homes are taking longer to sell: The typical home went pending in 18 days, one day slower than both April and a year ago.

• Fewer homes are selling above asking price: Just 28.4% of homes sold above list price in April, down from 30.1% a year earlier.

• Price cuts remain common: Nearly one in four listings (23.9%) had a price reduction in May, highlighting the growing need for sellers to price competitively.

My take

May was a miss — plain and simple. New listings and sales should be accelerating right now, not pulling back. Whether this is a brief stumble or the start of a broader slowdown, we'll have to wait and see. What's undeniable is that 2026 hasn't played out the way most people expected. Mortgage rates were supposed to be near 6% by now. They're not — and that gap between expectation and reality is keeping buyers hesitant and sellers cautious. In situations like this, agents will need to stay nimble and proactive, finding ways to get deals done regardless.

The new AI home search tool agents need to know about

Realtor.com has launched a new AI-powered home search tool built with Google.

It helps buyers estimate affordability, compare homes, and prepare offers — all before ever speaking with an agent. As a result, many buyers may arrive at the first conversation with an agent more informed than ever before.

Here’s what agents need to know:

• Search is now conversational: Instead of relying solely on filters, buyers can describe what they want in plain English and receive personalized recommendations.

• The platform remembers buyer preferences: The AI tracks budgets, priorities, and search behavior over time, allowing buyers to build on previous research instead of starting from scratch.

• Location data is built into the search: Google's mapping technology helps buyers evaluate commute times, schools, nearby amenities, and other lifestyle factors without leaving the platform.

• Buyers can do more research before calling an agent: The tool helps answer affordability questions, compare neighborhoods, analyze properties, schedule tours, and prepare offers.

• Agents still own the highest-value work: Buyers may arrive better informed, but they still rely on agents for pricing strategy, negotiations, local expertise, and transaction guidance.

My take

The value of an agent isn't disappearing — it's shifting. Buyers have always done research before making one of the biggest financial decisions of their lives. AI simply allows them to do more of it before reaching out. The agents who thrive won't be the ones guarding information. The best agents have always been paid for judgment. As AI handles more of the early research, that judgment becomes even more valuable. Buyers may arrive better informed, but they'll still need someone who can interpret information, provide context, and turn it into action.

Build buyer demand before your listing even goes live

The pre-market window is becoming one of the most important phases of selling a home, and Zillow Preview gives agents a free way to tap into it. With Zillow Preview, your listings can appear on Zillow and Trulia before they hit the MLS, getting in front of an average of 235 million unique users a month. Buyers can discover, save, and share your listing early, and you get real-time data on views and saves to help guide pricing and marketing decisions before day one on the market. Over 1000 brokers have already signed on, and the program is free and open to more. If your brokerage hasn't joined yet, this is absolutely worth bringing to their attention.

Markets where mortgage originations grew

Homebuying activity remains under pressure nationwide. 

According to ATTOM, purchase mortgage originations fell 19% from the previous quarter to 581,261 loans in Q1 — the lowest quarterly total since the first quarter of 2014. Purchase activity declined in 99% of the metro areas analyzed.

But that doesn't mean buyers have disappeared. In some markets, purchase lending surged by more than 100% from a year ago.

Here are the top metros that saw the largest year-over-year increases in purchase mortgage originations:

1. Fort Wayne, IN: +123.1% (809 → 1,805 loans)

2. Indianapolis, IN: +92.5% (3,931 → 7,566 loans)

3. Atlantic City, NJ: +19.7% (543 → 650 loans)

4. Evansville, IN: +18.6% (695 → 824 loans)

5. Santa Cruz, CA: +18.2% (318 → 376 loans)

6. Lynchburg, VA: +16.6% (428 → 499 loans)

7. Yuma, AZ: +16.1% (410 → 476 loans)

8. Barnstable Town, MA: +15.5% (477 → 551 loans)

9. Buffalo, NY: +15.5% (1,722 → 1,989 loans)

10. Madison, WI: +15.1% (944 → 1,087 loans)

My take

Three of the top five markets on this list are in Indiana, and it's not a coincidence. In a housing market where affordability remains the biggest obstacle, buyers are gravitating toward places where the numbers still work. The growth rates are eye-catching, but the bigger story is Indianapolis generating more than 7,500 purchase loans while most markets moved in the opposite direction. If demand is returning anywhere first, don't be surprised if it shows up in affordable Midwest markets before it reaches the coasts

Schematics

The news that just missed the cuts

• New York joins other states to ban private listings

• ChatGPT ads for real estate agents — here’s how to use them

• 6 startups looking to disrupt real estate

• Do this to turn your existing database into a listing pipeline

• America’s most affordable cities: low home prices, cost of living, taxes, and other perks

Foundation Plans

Advice from James to win the day

As I mentioned up top, AI is already changing how buyers search for homes. What was once spread across Google, Zillow, YouTube, and Reddit is increasingly being consolidated into AI-powered tools. Nearly half of prospective buyers say they plan to use AI during their home search, and most expect it to play a meaningful role in the process.

But according to Brendan Wallace, the impact of AI on real estate will go far beyond search.

Brendan is the CEO and CIO of Fifth Wall, the venture capital firm behind the world's largest fund focused exclusively on real estate technology. He has a front-row seat to where the industry is actually headed.

I don't believe AI will replace agents. But I do believe agents who ignore it risk being left behind.

In our conversation, Brendan and I dive into:

• Why AI won’t replace great real estate agents

• The future of proptech & real estate innovation

• The biggest mistakes agents are making with AI

• Why human connection still matters in real estate

• How technology is changing the buying & selling experience

• What separates successful founders and entrepreneurs

If you want a clearer picture of where real estate, AI, and technology are headed next, this is a conversation you don’t want to miss.

Watch the full conversation here:

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.

Founding Member, Kerri Brooks, says:

“I love that comps aren’t buried in 60-page reports. Having comps, AI notes, and an assistant all in one app instead of juggling a CRM, ChatGPT, and separate tools is a game-changer.” — Kerri Brooks, The Keyes Company – Stuart

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