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  • The Housing Thaw is Leading to Wallet Wows if You Know Where to Look

The Housing Thaw is Leading to Wallet Wows if You Know Where to Look

Author

Noah Zelvis
October 26, 2025

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For the first time in a while, housing finally blinked.

Existing-home sales rose 1.5% in September to a 4.06 million annual pace, the best since February. That bump didn’t come out of nowhere.

Thirty-year mortgage rates have been gliding lower toward 6% and buyers who’ve been doom-scrolling Zillow for 18 months finally said fine, let’s do this.

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What’s Actually Improving

  • Rates: Freddie Mac’s average 30-year fixed slipped to ~6.19% last week, the lowest in over a year. Agents say sub-6 (or at least 5-handle quotes) is the go signal for a bigger wave.

  • Volume: The September pickup reflects contracts signed in late summer when rates started easing. If rates stay calm, the next couple of prints can keep the beat.

  • Supply: Active listings hit ~1.55 million, up 14% year over year. Still tight by history, but at least buyers aren’t touring only two houses and one of them has a goat.

  • Prices: The median existing price rose 2.1% to ~$415k. That’s orderly, not bubbly.

  • Who’s buying: First-timers ticked up to about 30% of sales. The South and West look most buyer-friendly thanks to fatter inventories.

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Why This Matters Beyond Real Estate

Housing touches everything. When rates fall and closings inch up, you usually see a ripple: more inspections, appraisals, title work, moving vans, paint, flooring, fixtures, landscaping, and yes, pizza boxes on the new kitchen island. A gentle housing thaw can support growth even if the broader economy is sloggy.

It also reinforces the Fed’s current view. Powell is still balancing two risks, but the “modestly restrictive” stance plus a cooler labor market keeps the door open to another trim. The shutdown-induced data blackout complicates life for policymakers, yet housing-sensitive series offer real-time hints that easing financial conditions are doing their job without relighting inflation.

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The Catch (There’s Always One…)

Affordability is still tight. A typical monthly payment near $2,560 is down a few hundred from spring but higher than last year. Job uncertainty and the ongoing shutdown mess (think flood insurance hiccups and delayed approvals) can stall deals at the finish line. Rates drifting under 6% would help, but this recovery likely arrives in slow-motion, not IMAX.

Actionable Stuff

  • House hunters: Get pre-approved, then pair a shorter rate-lock with a float-down option. Ask about temporary buydowns (2-1 or 1-0) paid by the seller or builder; they’re common again and can bridge the next leg lower in rates.

  • Refi curious: If your current note starts with a 7, run the math now. Don’t chase the perfect tick; a 25–50 bps win, no-cash-out, and low closing costs can be worth it.

  • Investors: You don’t need to guess the exact sales pace if you own the suppliers, fixers, and paperwork pros that get paid on transactions and repairs, not just new starts.

  • Portfolio tilt: Add a slice of housing-adjacent cyclicals while keeping your quality core. Stage buys. Vol spikes on each rate headline are your friend.

Top Picks

NVR (NYSE: NVR)

NVR doesn’t behave like a typical homebuilder. It uses an optioned land model, which means it ties up much less capital buying dirt and can walk away if demand cools.

In a world where rates and headlines swing like a door on a loose hinge, that flexibility is gold. 

The company focuses on to-be-built homes across mid-Atlantic and Midwest markets, capturing demand as buyers thaw but inventory stays tight.

Lower mortgage rates expand its buyer pool, but the real edge is consistency: tight SG&A, strong cash conversion, and a long history of buying back stock instead of chasing every hot subdivision.

If the recovery is steady rather than spicy, NVR’s risk control can still deliver. If rates slide under 6% and traffic jumps, operating leverage does the rest.

TopBuild (NYSE: BLD)

Every closing and every remodel is a chance to roll trucks with fiberglass, spray foam, and weatherization.

TopBuild installs insulation for builders and retrofit customers, and sells building-science products to contractors. 

It’s a beautiful middle seat in this plane, as it benefits from new construction and from repair-and-remodel when owners improve what they already have.

Energy codes keep tightening, utilities keep offering rebates, and homeowners keep googling how to lower my bill.

That creates durable demand even if unit volumes in housing are only meh. As rates drift down, new-home pipelines fill; as budgets stay tight, retrofit wins on payback math.

Margin discipline and a track record of bolt-on deals add a quiet compounding layer.

First American Financial (NYSE: FAF)

Title insurance is not glamorous, but it’s volume-driven and wonderfully boring in the best way.

If existing-home sales inch up and refis perk as rates fade, orders and premiums recover. 

FAF has leaned into tech to speed closings, trimmed costs during the drought, and historically maintained a sturdy balance sheet.

Even a modest recovery in transactions can drop through nicely because the fixed-cost base was rightsized during the slump. 

Bonus: commercial title lags but eventually follows if financing loosens into 2026.

Risks to watch are obvious, as if rates back up or the labor market wobbles, volumes stall, but against that backdrop FAF gives you a straightforward way to participate in a housing thaw without betting the farm on starts.

SiteOne Landscape Supply (NYSE: SITE)

New homeowners plant stuff. Existing homeowners fix patios, sprinklers, and retaining walls.

HOA boards replace drip lines because the flowers died again. SiteOne is the leading distributor for pro landscapers: irrigation, hardscape, turf care, lighting, the whole curb-appeal cart. 

It’s national scale in a fragmented niche, which means pricing power, private-label mix, and route density that mom-and-pops can’t match.

The story is household formation and repair/remodel as mortgage-locked owners enhance what they own. 

If the South and West remain the volume leaders, climate-resilient irrigation and xeriscape products become secular tailwinds.

Add in a steady cadence of tuck-in acquisitions and you’ve got a roll-up with real synergies, not buzzwords.

Bottom Line

Housing doesn’t need a victory lap to help your portfolio. It just needs stability and a gentle tailwind from rates. That’s starting to show up in the data.

Own the businesses that get paid when people move, fix, and upgrade, at 6.1% mortgages and at 5.6%, and let compounding do the heavy lifting while the economy yawns and stretches awake.

That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.

Best Regards,
—Noah Zelvis
Macro Notes