Market Insight
What the Midterms Mean for Housing
PPR Chief Economist Spencer Staples on affordability, mortgage rates and why he sees residential real estate as ripe for an upturn.
The day after the 2026 midterm elections, PPR Chief Economist Spencer Staples sat down with Content Manager Brooke Swales to talk through what the results mean for housing. He expects Congress to stay focused on affordability through targeted measures, such as renter assistance, down payment assistance and tax breaks, rather than one big bill. He argues mortgage rates aren’t high because housing is overheated, sees the ROAD to Housing Act’s build-to-rent exemption as a tailwind, and points to energy prices as the wild card for the Fed. With new supply down and absorption up, his read is that the residential sector is ripe for an upturn.
Explore the Data
PPR takes a data-driven approach to residential real estate. These are some of the data points our Chief Economist, Spencer Staples, watches to read the housing market, from affordability and mortgage demand to new supply and inflation. Each chart is featured in the video above and built from the same data. Pick a topic to see the chart with his take, and hover or tap the chart for exact values.
Spencer’s Take
It’s become more and more difficult to match an income with a given price of a home…
Spencer Staples, Chief Economist
Since 2000, home prices are up 214%; median household income is up 108%. Prices have grown about twice as fast.
So mortgage rates are not high because of an overheated housing market.
Spencer Staples, Chief Economist
From Q4 2021 to Q3 2026, purchase originations fell 26% ($1,958B to $1,457B) while the 30-year fixed rate rose from 3.08% to 6.69%. Light bars are the Moody’s Analytics baseline forecast, not results.
Supply has really been diminished, absorption is up, and so I think the fundamentals for residential real estate are very good at this time.
Spencer Staples, Chief Economist
Housing starts in September 2026 were 24% below their 2021 average. Over the year ending Q3 2026, apartment absorption came within about 13,000 units of completions, the narrowest gap since late 2015 (RealPage).
Construction and investment has really kind of moved sideways for a couple of years, and employment in the residential sector is actually down over the last couple of years.
Spencer Staples, Chief Economist
Real residential investment is 19% below its Q1 2021 peak, and residential construction jobs fell by about 98,000 from September 2024 to September 2026.
Prices of energy will work their way into the final level of prices, and by that I mean the Fed’s preferred measure of the PCE deflator with something like a six to nine month lag, and the energy prices have been elevated for six months.
Spencer Staples, Chief Economist
Manufacturers’ prices paid stood at 63.1 in September 2026. Core PCE is drawn 7 months earlier than its actual date to show how it follows the survey.
Driven mostly by a one off inventory build.
Spencer Staples, Chief Economist
Real GDP grew at a 3.4% annual rate in Q3 2026; inventories contributed 1.61 points, about half.
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Sources
FRED, Federal Reserve Bank of St. Louis: Case-Shiller U.S. National HPI (CSUSHPINSA); median household income (MEHOINUSA646N); housing starts (HOUST, HOUST1F); real residential investment (PRFIC1); residential construction jobs (CES2023610001, CES2023800101); Empire State survey prices paid and received (PPCDISA066MSFRBNY, PRCDISA066MSFRBNY); core PCE (PCEPILFE); real GDP (A191RL1Q225SBEA) and inventory contribution (A014RY2Q224SBEA). Data pulled Nov. 4, 2026.
Mortgage Bankers Association; Freddie Mac; Moody’s Analytics baseline forecast (Oct. 2026). RealPage, 3Q 2026 U.S. apartment data.
