After years on the sidelines, first-time buyers are finally returning to the housing market. Their share of purchases just reached a five-year high, signaling that affordability is improving and buyers are ready to jump back in. |
Not only is affordability improving, but so is investor confidence in fix-and-flips. Flippers are looking to invest again and capitalize on the large share of first-time buyers. In this newsletter, I’ll discuss the new fix-and-flip outlook, first-time buyers entering the housing market, the curse of Michael Jordan’s mansion, and the importance of agents being trained on financing options for their clients. |
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Here's what you need to know today: |
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First-time home buyers are back. According to the National Association of Realtors, first-time buyers accounted for 34% of existing home purchases in February, up from 31% the month before, and matching the highest share seen in the past five years. This rise in first-time buyers came as rates briefly dipped to a three-year low of 5.98%, giving more buyers the financial ability to qualify for loans that were out of reach just a year ago.
The influx of first-time buyers pushed overall housing activity slightly higher. Existing-home sales rose 1.7% in February to an annual pace of 4.09 million. Home sales are still down 1.4% from last year, though affordability has improved for eight consecutive months, and incomes are rising faster than home prices. The national median home price reached $398,000, up just 0.3% year over year – modest enough for entry-level buyers to finally regain purchasing power.
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Not only is the market seeing a rise in first-time buyers, but also in inventory. Inventory is slowly improving, as the number of homes for sale rose to 1.29 million units, up 2.4% from January and 4.9% from last year. While inventory remains low, the rise gives real estate professionals hope that we are moving into a more stable market.
For now, the return of first-time buyers is one of the clearest signals that the housing market may be beginning to thaw. Entry-level buyers are often the first step in the housing market chain. Once they purchase, current homeowners can move up, creating more transactions across the market. If rates stay around 6% and affordability continues, more first-time buyers are poised to enter the market. What this means for the agents: 📚Education will win these clients: First-time buyers need more guidance. It's important to clearly explain the home-buying process, local market conditions, and best practices to help them get into their first home. I always provided first-time buyers with a physical roadmap at the first showing, outlining every step of the transaction to make sure my clients felt confident about the process.
💵Financing understanding: It’s critical that agents confirm their clients understand their financing options and buying power. If your buyer is purchasing with a mortgage, make sure they are preapproved and understand how even slight shifts in mortgage rates can affect their affordability.
🔑Spotlight on starter homes: With first-time buyers returning, well-priced entry-level homes could see stronger demand and faster offers. If you have sellers with homes that fit into this criteria who may be thinking of selling, it's a great time to reach out. I also recommend door-knocking or cold-calling in areas with a high concentration of entry-level homes to generate listings.
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Will we see a rise in fix-and-flip investor purchases this spring? |
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Will we see an increase in office-to-residential conversions this year? |
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Flippers are staging a comeback. After a tough couple of years for flippers squeezed by rising rates and shrinking margins, investor confidence is starting to rebound, and many are preparing to close more deals in 2026. The latest Burns + Kiavi Fix-and-Flip Market Index rose to 62 in Q4 2025, signaling that investor confidence in house flipping is expanding again. The index measures sentiment among fix-and-flip investors nationwide; any reading above 50 indicates improving market conditions.
Economists attribute the improvement to moderating mortgage rates, better access to capital, and early signs that home prices are stabilizing. With this renewed optimism, 71% of flippers say they expect to purchase more homes in 2026, the highest share recorded in four years. Fix-and-flip investors typically account for 6%-9% of existing home sales, and entry-level or first-time home buyers make up roughly half of flipped-home purchases. With the increase in first-time homebuyers in the market, it's clear that flippers have a growing pool of buyers.
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Profitability in today’s market does require more discipline than in past cycles. Return on investment for fix-and-flip acquisitions dropped below 25% in 2025, the lowest level since 2008. This shift is pushing investors to focus less on appreciation and more on fundamentals. Investors are prioritizing purchasing properties at the right price, carefully monitoring renovation costs, and making improvements based on specific buyer tastes in the market.
For investors preparing to deploy capital this year, access to renovation financing will remain a key factor in closing deals. Lenders like Kiavi specialize in fix-and-flip loans designed for real estate investors, helping operators secure funding quickly, so they can move from acquisition to renovation and resale without losing momentum on promising deals.
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What investors are prioritizing now: - Reliable financing partners: Investors are focusing on partners that provide easier access to capital, enabling them to act more quickly when acquisition opportunities arise.
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Smart renovation scope: Successful flippers are focusing on improving layouts and making functional updates that buyers are looking for, rather than spending on cosmetic features.
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Entry-level price points: As almost half of all flipped homes are purchased by entry-level buyers, flippers are targeting more affordable resale ranges rather than luxury renovations.
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Your Move This Week:
💰Line up renovation financing before you find the deal
🏠Identify homes that could be flipped and resold at an entry-level price point 🔎Analyze the current market to determine what updates buyers are prioritizing |
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Don’t let slow lenders stall your growth. While banks bury you in paperwork, Kiavi uses an AI-powered tech platform to get you to the closing table faster. With 100k+ projects funded, we finance based on the property’s potential, not your income. That means no W2s, bank statements, hard credit pulls, or appraisals on most loans. Get fast, reliable capital for your next fix-and-flip, rental, or new construction project today. |
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Michael Jordan’s global fame has not been enough to rescue his former Chicago-area mansion from years of real estate struggles. The over 32,000-square-foot estate on seven acres, consisting of nine bedrooms, nineteen bathrooms, an indoor regulation basketball court, a movie theater, putting green, and circular infinity pool, spent 13 years on the market, finally selling in 2024 for $9.5 million – less than a third of its original $29 million asking price.
The current owner, Chicago Bulls superfan and investor John Cooper, purchased the property with plans to transform the iconic home, now renamed Champions Point, into a luxury destination rather than a personal residence. This plan quickly ran into obstacles. Cooper first proposed selling $1 million luxury timeshare shares, giving owners one week of annual access. But the local government quickly blocked the plan, amending zoning laws to prohibit timesharing in single-family homes.
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Cooper then pivoted the plan to rent the property, listing the estate for $230,000 per month, later reducing the rent to $150,000, and eventually listing it on Airbnb Luxe for $89,000 per month. This approach also struggled to gain traction as the home is now removed from the rental market and Airbnb. Cooper has reportedly also considered turning the estate into a tourist attraction with guided tours, though local approval remains uncertain.
Ironically, the very features that make the mansion iconic made it difficult to sell all those years. Estates designed around one owner’s identity can become “personality homes”. In today’s luxury market, buyers increasingly prefer adaptable spaces over hyper-customized estates. This home’s saga also highlights a critical lesson for agents and buyers alike: understanding what a property can legally be used for is just as important as the property itself. From zoning restrictions to rental rules, even luxury buyers need guidance before closing to avoid costly surprises.
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Today’s buyers are navigating a fluctuating market. This means that traditional financing conversations aren’t always enough. Brokers should ensure their agents understand the full range of financing options available to their clients, from down payment assistance programs to bridge loans.
I’ve seen many agents default to the same financing scripts they’ve used for years, but the market has changed, and so have buyers’ financing options. Residential or investor buyers who are educated on creative financing options can move faster, compete more effectively, and avoid missing out on opportunities. An example of an alternative financing option is a bridge loan, which I have advised my own clients to take advantage of and have had to educate fellow agents about.
A bridge loan allows homeowners to unlock equity in their current property so they can make a competitive offer on another without waiting for their existing home to sell. This is a great tool for “moving up” buyers and investors looking for short-term financing. Agents shouldn’t be expected to master every financing program on their own; brokers, this is where your leadership matters. The successful brokerages are bringing in lenders to educate their agents, explain financing strategies, and walk through real transaction scenarios.
As an agent, I can attest that when we understand the financing solutions available to our clients, we become stronger advisors and bring more deals to the closing table. Just as important as educating agents is building the right lender partnerships. Working with lenders who specialize in fast, flexible financing, such as Kiavi, which offers short-term bridge loans, gives agents another tool to help buyers and investors compete and act quickly when opportunities arise. When partners like Kiavi are integrated into your brokerage’s training and deal strategy, they become more than lenders – they become part of the system that helps your agents win more business.
What’s working right now: |
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Financing education sessions: Successful brokers are beginning to bring lenders into team meetings to educate agents on programs such as bridge loans, renovation loans, and investor financing, enabling agents to better advise their clients.
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Lender partnerships: Brokers are creating partnerships with specialized lenders and integrating them into the brokerage beyond training sessions, leveraging the lender’s expertise to heighten agents’ success.
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Financing cheat sheets: Instead of relying on agents to remember the specifics of every lending program, brokers are providing quick-reference guides that outline financing options and the types of buyers they are best suited for.
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👵Boomers are unlocking inventory: RISMedia discusses that as more Baby Boomers relocate to be closer to healthcare and family, they are gradually releasing long-held homes back into the market.
🩷Santa Monica “Barbie House” lists for rent: Mansion Global reports that the famous pink oceanfront home in Santa Monica, CA, is now available for $38,500 per month.
🏛️Senate advances major housing bill: Realtor.com discussed the Senate passing the 21st Century Road to Housing Act in an 89-10 vote, including reforms to boost homebuilding and a proposed ban on institutional investor buying single-family homes. |
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Sophia Doyle is a staff writer at The Close and a licensed New Jersey real estate agent with hands-on experience in residential real estate. Sophia brings real-world insight into today’s housing market, combining on-the-ground agent experience with a strong background in communications. She understands the full transaction lifecycle, from lead generation and client relationships to marketing strategy and deal execution. Through her writing, Sophia delivers clear, practical guidance to help agents navigate an evolving industry with confidence and creativity.
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