8
👁🗨 Sesemi STR Hot Sheet | 📲 STR Mortgages
Dear Sesemi STReet,
2025 was quite the year for investors! From record returns in equities and commodities to record STR Sales on the Oregon Coast - we are looking forward to an even more lucrative 2026.
🌊 STR Year In Review:
15 STR Investor Sales ranging from $200K to nearly $2M!
Combined STR Sales of $11.45M in SALES
#1 Volume and Transactional STR Broker on the Oregon Coast!!
Furthermore - we became a FEATURED BIGGER POCKETS contributor for our lending and STR expertise.
Also - OregonSTRs.com X Sesemisheet.com reached a record investor audience with nearly 50% annual growth in subscribers and continues to claim the top investor tool for shopping legal STRs throughout Oregon.
We’re grateful for your support and here to help you reach you investment goals in 2026 & beyond!
📲 Shop directly at our exclusive STR HOT SHEET. Updated daily and featuring 100+ active and off market vacation rental properties for sale. Search 24/7/365 at www.sesemisheet.com
What a New Fed Chair's Low-Rate Policy Will Mean for Real Estate Investors, and How to Prepare for Lower Rates
Last weekend, wagering sites nearly doubled their expectations for the Trump-aligned election of National Economic Council Director Kevin Hassett as the new Federal Reserve chairman.
The stakes for real estate investors could not be more impactful, as the Federal Reserve chair is effectively the person who helps determine U.S. mortgage rates and, subsequently, market demand. Jerome Powell’s term is scheduled to end in May 2026, with the incoming chairman expected to take a decisively dovish position on rates.
The expectation is that the incoming chairman will align with the Trump administration on (potentially dramatically) lower rates to boost the economy, provide affordability relief, and unlock housing. A shift to a low-rate Fed policy will make mortgage money cheaper, directly increasing buyer demand, unlocking inventory, and potentially launching a new cycle of real estate appreciation.
How a Dovish Chair Makes Borrowing Cheaper
Short-term rate action
Fed rate cuts are the most visible action. The new chair will push for lower short-term lending rates for banks, known as the federal funds rate—possibly via larger-than-anticipated cuts (0.5%-0.75% per meeting), or done more rapidly than market expectations.
Market signaling
The chair’s words can matter more than actions. If in the first Fed meetings Hassett signals to lenders that long-term rates are coming down, expect lenders to adjust accordingly. This weekend, we already saw the 10-year Treasury touch 4%.
The money supply (boosting liquidity) ending quantitative tightening (QT)
Even under Powell’s tenure, the Fed is scheduled to stop tightening this December. This has a direct impact on mortgage bonds and mortgage rates (the 10-Year Treasury yield), causing 30-year fixed rates to drop.
Downstream Effects on Homeowners and Residential Real Estate
Buying power improves with lower 30-year fixed rates by reducing monthly payments, allowing buyers to qualify for larger loans, and increasing the buyer pool. Combined with dramatically higher 2026 conventional loan rates, the stage is set for a potentially dynamic real estate market over the next three years.
Inventory and home prices: The rate lock unlocked
Millions of existing homeowners (including myself) paying “higher” interest rates will have the chance to refinance, freeing up household cash flow and investors to expand their portfolios. Lower rates encourage homeowners, who have been “locked” into low pandemic-era mortgages, to finally sell and move, boosting market inventory. In turn, increased demand from both first-time homebuyers and "unlocked" movers will likely put upward pressure on prices.
Impacts on Real Estate Investors: Property Valuation and Returns
Put simply: When interest rates fall, real estate becomes more valuable, leading to higher sale prices when investors exit a deal. If inventory doesn’t rise as quickly as demand, bidding wars could return by the end of summer.
Debt cost vs. property yield
Borrowing costs dropping below the property's potential income makes every deal more attractive. Dramatically lower rates could have a dramatic effect on commercial and multifamily markets that have struggled in a “higher for longer” environment.
Strategies for Acquirers and Developers
Maximizing leverage: Buy-and-hold investors can lower debt obligations and improve cash flows.
Easier loan qualification: Lower debt obligations improve the debt service coverage ratio (DSCR), making it easier to secure financing for investment properties. Could this be why Rocket Pro recently entered the DSCR space?
Construction: Developers get cheaper construction loans and the opportunity to refinance maturing debts, which could add to projects and inventory supply.
A lower-rate environment created by a dovish Fed means it's time for real estate investors to prepare for increased competition and higher valuations. The biggest risk is that aggressive rate cuts bring back high inflation, which would force the Fed to quickly hike rates again. Investors must monitor inflation data closely.
Action steps:
Get ready to buy: Line up your financing and target markets, anticipating lower rates.
Lock in debt: If you own or buy, prioritize locking in long-term fixed rates to protect yourself from future rate volatility.
Final Thoughts
I have been saying for some time that the Trump administration and the “Commander & Developer in Chief” will prioritize lower rates—potentially much lower than anyone expects. Remember, it was during Trump’s first term that rates hit historic lows during the COVID-19 pandemic.
How low could mortgage rates go? We think 30-year rates with a four in the front could be possible by mid-to-late 2027.