For all the people who think Reserve Management Purchases are "QE" - look at this graph.

In an ample reserves system, Fed needs a certain amount of excess reserve assets as a % of bank deposits.

If they don't, a banking crisis could happen. And we're now at the point where reserves could be crossing the threshold from "ample" to "scarce".

Through November, excess reserves fell to 15% of bank deposits, now well below the 15-year average, indicating a tightening of conditions.

Which is why they are now ushering in incremental T-Bill purchases to keep bank reserve growth aligned with bank deposit growth.

In its current form, this it not QE.

However - if they were to expand the amount purchased, and/or buy longer dated securities, it would be QE. 1) There are several metrics you can use to gauge how much reserve liquidity the Fed needs in the system for their "ample reserves" regime - one is GDP, another is M2, but my personal favorite to gauge this is bank deposits.

During the pandemic, Excess Reserves (Bank Reserve + Reverse Repos) surged to 32% of all commercial bank deposits.

This was the "free money" era with massive QE that created the 2021-22 inflation.

Since then, with operation of QT, and general growth in the economy, the excess reserve ratio deleveraged down from 32% to 15%, indicating a tightening of conditions.

Why has the housing market been frozen since 2022?

Because the cost to buy a house with a mortgage (green) vaulted way above the a) cost to rent and b) the mortgage cost for existing owners.

The net result is that few people have a financial incentive to move. Cheaper to stay renting, cheaper to stay in current house/mortgage.

But - one interesting trend we are beginning to notice is the mortgage payment for existing owners (orange) is now growing faster than rent.

This is reversed from the post-pandemic period. Where sub-3% mortgages and still cheap taxes/insurance made for a very low cost to own for existing mortgage holders.

Now - taxes and insurance are up, and more of the mortgaged population is holding a 6%+ rate. So the costs for existing mortgage holders are rising.

This likely means we'll see more existing owners elect to sell in 2026, as it becomes less profitable for the average homeowner to rent out their house. And more profitable to cash out on your equity, sell, and rent for a bit until market corrects.

Translation: expect more for sale inventory, and more downward price pressure in the for sale market. 1) The other obvious conclusion from the graph above is that finding a way to drive down the cost to buy a house would help unlock the housing market.

e.g., the closer the Mortgage Payment to Buy goes to Monthly Rent and Mortgage Cost for Current Owners, the more home sale transactions will take place.

As the financial incentive to move increases.

Markets with the biggest rent deflation over the last 3 years:

Austin: -21%
Fort Myers: -19%
CoSprings: -15%
Phoenix: -14%
Raleigh: -13%
San Antonio: -12%
Atlanta: -11%
Denver: -11%

Expect apartments rents in these markets to continue declining in 2026, as vacancy rates remain elevated.

Good news for renters, bad news for investors who bought near the peak. 1) The deflationary rental environment, particularly in the Sun Belt area of America, is one reason why I believe we'll continue to see more inventory hit the market next year.

Simply put, many investors and landlords over-extended themselves during the pandemic boom, bought near peak values and low cap rates, and can't afford to hold properties through a declining rental environment.

San Francisco is the strongest housing market in America right now.

Home sales are 12% above the long-term average.

While inventory is -28% below the long-term average.

The AI boom has flipped SF on its head, and Reventure is now forecasting rising prices over the next 12 months.

(note: where you don't want to be on the graph above is in the top left. That's very low demand, and very high supply). 1) Of course - let's not forget that San Francisco was one of the weakest housing markets in America since the pandemic.

With values dropping 14.7% since the middle of 2022, one of the stiffest corrections in the U.S.

The typical price of a condo/house in SF county is now $1.25 million, one of the highest in the U.S., but much cheaper than it was several years ago.

Pending home sales in October 2025 came in -1.2% below last year, and -27% below the long-term average.

Today's contract signings are at the lowest level in 30+ years - even worse than the GFC - and showing no noticeable signs of improvement (even after 6 Fed rate cuts and a big spike in inventory)

Suggesting there's major structural inertia in housing right now. The market is unaffordable, overpriced, and cheaper to rent - and as a result homebuyers are fundamentally disinterested.

On top of that - many households are now delaying family formation and electing not to have kids, which further reduces the urgency to buy.

Sellers who are delisting their houses right now, in hopes of an improved market in 2026, could be making a big mistake.

Access Reventure's Price Forecast for your city and ZIP at reventure.app. 1) I can't stress enough how crazy it is that NAR's Pending Sales figures just came in -1.2% below last year.

Remember - last year at this time, we only had one double rate cut.

Since then, we've had another 4 quarter point rate cuts

And demand went down!

The U.S. Housing Market is about to get hit by a big demographic shift.

By 2032, there will be more deaths than births in the U.S.

This crossover point will be the continuation of a long-term trend over the last four decades, and ultimately will have the following impacts:

a) structurally lower homebuyer demand, as declining births and family formation lowers the need and urgency for young people to buy houses

b) more inventory, as incrementally more deaths and the aging out of the Baby Boomer generation increases listings (Freddie Mac estimates 9 million homes by 2035).

This will likely have a disinflationary and/or deflationary impact on home prices over the long-term.

Reventure just added Birth/Death Ratio data for every county in the U.S., going back 30 years, under 'Demographic Data'. Sign up to see the demographic trends in your area at reventure.app. 1) Many participants in the housing market are ignoring this issue, as if it does not provide a positive outlook for home prices, and it's also still another 6-7 years off.

However, serious homebuyers and investors should dig in and understand how the demographic decline will impact their area.

The U.S. housing shortage is over.

Over the last four years, housing inventory has doubled from its pandemic lows. And is now only 9% lower than the same month in 2019.

This is great news for buyers, and increases the likelihood of declining prices.

However - there's big bifurcation by region.

In South and West, listings are up 5-10%. 📈
In Northeast/Midwest, listings are down 30-40%.📉

Meaning there are essentially two different housing markets operating in the U.S. right now.

To see how your area is performing, type in your ZIP and search the data at reventure.app 1) This bifurcated market has taken many in the housing industry by surprise, as most analysts expected the boomtown Southern states to continue appreciating.

But the exact opposite has happened over the last 3 years.

Inventory in the South - and West - has exploded.

To the point that these areas are now in a inventory surplus. While the Northeast/Midwest Rust Belt remains in a persistent shortage.

The weakness in the rental market right now is alarming.

Suggests there's much more deflationary pressure in housing/economy than people understand.

And that 2026 will be a year where CPI drops.

Note: over 33% of the inflation calculation is based on rental cost estimates. 1) Here's the chart from the CoStar article. -0.31 rent growth in October.

Normally there's a seasonal slowdown around this point.

However, this was the biggest in over 15 years.

U.S. home value growth is entering recessionary territory in late 2025.

With Zillow's value index growing by only 0.1% over the last 12 months.

The previous times we've seen home value growth this low have mostly been associated with economic recessions. (like 2008, 1991, 1982, 1973).

This confirms the comments made earlier this week by Scott Bessent, that the housing market is in fact in a recession.

The question is: will national home values finally dip negative in 2026, and which cities will be the best places to buy next year?

To find out, go to reventure.app and sign up for premium to see our 12-month forecast for your ZIP code. 1) While many are frustrated that home prices are still near all-time highs, the reality is that a housing market trending towards 0% nominal home price growth is one already well into a recession, given how abnormally low this appreciation is.

In the last 55 years, it has only happened 5 times. 4 were recessions. And one was the mortgage rate shock in 2022.

110 years of Home Price Growth v Rent Growth.

There's four distinct periods where home price growth greatly exceeded rent growth:

1943-1947: World War 2 boom
1974-1979: Inflation-era boom
1998-2005: Mortgage bubble boom
2016-2022: ZIRP / Pandemic boom

Amazingly - almost all of America's inflation-adjusted home price growth in the last century comes from these 4 periods.

From 1916 to 1970, if you exclude WW2, home price and rent growth moved in near lockstep with each other.

Since 1970 - home price growth and rent growth have decoupled, with home prices becoming much more volatile.

However, since 1970, home price growth tends to reverts back to rent growth. Suggesting that we will see the rental market outperform the for-sale housing market in coming years.

To access housing market data like this for your city, go to reventure.app and type in your ZIP code. 1) The housing market is actually fairly simple when you adopt a longer term outlook:

It's a function of inflation (measured by rent growth), demographics, and government intervention.

The profitability of investing in real estate has declined significantly over the last 75 years in terms of yield.

Returns today are near the lowest level on record (4.7%), and have been driven lower by three distinct periods over the last 75 years.

1) The 1970s inflation, which caused home prices to double in a decade, far greater than the growth in rent, pushing yields down.

2) The 2000s Mortgage Bubble, which caused prices to outstrip rent growth, and dropped the cap rate down to a record low 4.4%.

3) ZIRP period of 2010s + Pandemic, which produced outsized home price growth relative to rent growth, again driving cap rates down to a record low.

In the last several years cap rates have improved marginally as price growth has slowed, but not nearly enough to offset the increase in interest rates.

One has to wonder - are we coming to the end of a long cycle of cap rate compression, and will we see rental yields grow into the future?

Head to reventure.app/map to track cap rate and rent data in your market. 1) It's interesting to think about how different the real estate investing landscape was back in the 1950s.

For starters, there were fewer investors. The idea of owning multiple homes had no set in yet, and institutional investors were non-existent.

In this period, you could buy a house and rent it out at an unlevered cap rate of over 9.0%.

Home builders have 26.8% of all the homes currently listed for sale on the U.S. housing market.

The long-term average is only 15%.

While it would be great for builders to build more, we really need more existing owners to sell.

Particularly investors. 1) Home builder inventory is actually near a record high in 2025, while existing inventory is not even close to a record.

In fact, existing home inventory is not yet back to its 2019 levels.

Is anyone else concerned that the U.S. economy, and consumer spending, is now almost entirely reliant on the 2nd largest stock market bubble on record?

Long-term average Shiller P/E Ratio is 17.8x

Today we're at 39.8x.

Only time that stock market valuations were richer was in 1999. 1) Rising stock market valuations are continuing to drive consumer spending in America, with the Top 10% of U.S. households by income now driving nearly 50% of Consumer spending, according to Moody's.

By the end of Q4 2025, there will be more 6% mortgages than sub-3% mortgages. 1) The shift in interest rate composition of existing mortgage holders will have a big impact on new listings in future quarters and years.

As more and more mortgage holders take on higher rates, through the natural attrition of sales and refinancings, there will be more pressure to sell.

Lennar is showing you what has to happen in the housing market to drive sales.

They've cut prices 22%. And are now below pre-pandemic pricing.

The result? Sales orders have spiked.

Lennar's margins have compressed to 17.5% as a result of the price cuts. But that's just how it goes in a housing recession - to move inventory, and sell homes, you need to accept less.

Existing home sellers would be wise to take note. 1) Lennar's new order book is 2x bigger than it was prior to the pandemic, and they're gaining a massive amount of market share.

They're essentially showing everyone in the housing market what has to happen to bring sales back.

Most people still aren't paying attention, though.

We literally have the worst homebuyer demand on record according to the NAR's pending sales index.

Time for people to wake up and realize prices are the problem. 1) Fed cut rates almost one year ago, and demand went down.

Think about that. September 2024 was the first rate cut, and the pending sales index back then was between 76-79.

Now it's 72.

Buyer demand dropped after rate cuts.

Austin, TX's rental market has corrected hard.

Asking rents are down 18% in the last three years.

And now, rents are almost back to pre-pandemic levels.

Apartment developers in Austin are taking it on the chin after overbuilding in this market for the last 5 years.

The good news? Austin is now one of the most affordable markets in America to rent, relative to local incomes. 1) It's wild to see how rents in Austin have changed over the last six years.

July 2019: $1,279/month
July 2022: $1,631/month
July 2025: $1,344/month

28% boom.

18% correction.

And now rents are only 5% above the pre-pandemic norm.

The immigration boom from 2022 to 2024 is hiding a startling fact:

U.S. natural population growth has plummeted.

With growth from Births minus Deaths clocking in at only 502k in 2024.

That's down about 70% from the mid-2000s. 1) Plummeting natural growth can have a variety of consequences for the U.S., and is primarily driven by two factors:

Increased deaths, due to the aging of the population

Stagnant births, also due to aging, and due to lifestyle choices of younger generations

Historical cost of Buying v Renting.

This explains everything about the current housing market. 1) Today's premium to buy of $713/month is one of the highest on record, and a key reason why homebuyer demand is near record lows.

First-time buyers are doing the simple math, and deciding to stay renting, since it saves them money in the short-term.

For the first time ever, it is considerably cheaper to buy a new house than to buy an existing house.

Likely signals an inflection point in the housing market. 1) In June 2025, it was roughly 8% or $33,500 cheaper to buy a new house from a builder than to buy an existing house.

This is only the 6th time in the last 26 years it has ever been cheaper to buy a new house.

Immigration has dropped to essentially zero.

What will the housing market impact on demand be? 1) According to John Burns, from 2022-24, all of the growth in renter households came from immigration.

While only 5% of buyer demand came from immigration.