As mortgage rates rise, with some forecasting 8% rates in 2027, newly appointed AGNT CEO Leo Pareja said many people are waiting for a housing collapse, but he believes that has already happened.
“Winter is here,” Pareja told attendees of eXp Realty’s eXp Con on Thursday morning. “We need to stop waiting for the collapse because it already happened three years ago.”
According to Pareja, the low rates witnessed both after the Great Recession and during the COVID-19 pandemic “stole tomorrow’s buyers,” resulting in the 4 million existing home sale cycle the housing industry is currently locked in.
Due to these two crises and the responses to them by financial policymakers, Pareja believes both real estate professionals and consumers have “forgotten what normal looks like.” He noted that while mortgage rates may sit near 7.5% today, this is still close to their historic average.
Yet a rate closer to 8% than it is to 7% is a hard pill for many consumers to swallow. And if rates do go above 8% in 2027, Pareja said he believes existing home sales may dip below 4 million for the first time since 1995.
“But whether it is 3.9 million or 4.1 million existing home sales, life events drive all real estate decisions. They force people to move no matter what,” Pareja said.
In addition to this, while the rate-lock effect may be affecting some homeowners, data shows that for the first time in years, more homeowners have a mortgage rate above 6% than below 3%.
Pareja also stressed that there are many programs and resources available to help consumers that need to move, even with higher mortgage rates, including the thousands of down payment assistance programs that exist nationwide. Assumable mortgages are another potential solution, a category into which nearly all Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans fall into, he said.
But this may not be enough to quell the anxieties of worried buyers and sellers. This is why agents need to be able to take the national headlines about rising inventory and mortgage rates and apply it to the context of their local market, Pareja said.
“Austin, Texas, had one of the highest year-over-year home price drops at 4.46%, but Abilene, Texas, had one of the largest (gains) at roughly 9%,” Pareja said, illustrating his point that local market context matters.
Overall, in 2025, more than 100 of the nation’s 300 largest metro areas recorded annual home price declines, he said. But in 2026, just 54 markets experienced year-over-year drops. In addition to this, while housing inventory is up 5.9% annually, this is down from a 28.9% increase last year.
So while transactions may be harder to come by in 2027 — making it “separation season,” in Pareja’s words — he believes agents can still be successful.
“In 2021, business was easy. There were 3% rates and homes sold in days, which is why the number of agents ballooned, but you can’t keep doing the same things,” Pareja said.
“This market requires the skill of a professional, and not everyone will have it because work is the moat. Work is what separates the people who are never going to go out of business. Work separates the agents who invest in themselves. When you put in work, your business takes off, and those who stay consistent in the market are the ones that survive. You will claim your unfair share from the people that don’t put in the work.”
