Real estate never sleeps. After years of rising prices, low supply and high interest rates, the house market heads into 2026 with signs of stabilisation. For families and new investors seeking to generate rental income, understanding trends and key data is essential. This post explores why demand has cooled, which are the fastest growing states and the fastest growing city in the US, what a cap rate is, and how Sell2Rent's sale‑leaseback model works. We also tackle myths like states without property tax and share links to register and learn more.
Housing outlook 2025‑2026
J.P. Morgan’s housing market outlook for 2025 expects home prices to increase modestly by around 3 % per year. Oversupply is not a big factor; inventory is starting to rise but remains below historical averages. Existing home sales ticked up 3.4 % in October 2024, yet volumes are still low, suggesting demand is muted due to high mortgage rates.
Many owners have low fixed rates and are reluctant to sell, keeping supply tight. J.P. Morgan expects 30‑year mortgages to fall only slightly to 6.7 % by the end of 2025. That keeps the big question alive: is it a buyers or sellers market? The market action index shows a slight seller bias, but the combination of high prices and elevated rates is leading to price cuts on close to 40 % of listings. In short, it’s neither a buyer’s nor a seller’s market; it’s a market of adjustment and patience.
Landlord Studio’s Great Reset report notes that national home price growth in 2025 was just 1.3 % year‑over‑year and that prices fell in 32 large metro areas. This “reset” comes from rising inventory, record multifamily construction and a slowdown in rent growth. For small investors, this means there are opportunities, but caution is key.
Do any states have no property tax?
Many blogs mention states without property tax, but that’s a myth. According to Landlord Studio, no state completely eliminates property tax. State and local governments depend on these revenues to fund schools, fire departments and infrastructure. However, some states have very low rates. The ten with the lowest effective property taxes include:
- Louisiana – average effective rate of about 0.18 %, equating to roughly $243 per year on a typical home.
- Hawaii – 0.26 %, though property values are high.
- Alabama, Delaware and the District of Columbia – rates between 0.33 % and 0.46 %.
The list continues with West Virginia, South Carolina, Arkansas, Mississippi and New Mexico, all with rates below 0.55 %. If you’re looking for the lowest property tax states, these are good starting points. Effective tax rates are highest in New Jersey, New Hampshire and Texas; keep that in mind when doing your comparative market analysis.
Cities and states with the fastest growth
The U.S. Census Bureau reported that Princeton, Texas was the fastest growing city in the US in 2024, with a spectacular population increase of 30.6 %. This Dallas suburb has doubled its population since 2020. The same update notes that New York, Houston and Los Angeles recorded the largest numeric population gains.
As for states, SmartAsset’s study shows Florida leading population growth from 2023 to 2024 at 3.37 %, rising from 22.61 to 23.37 million residents. Texas (2.58 %) and Utah (2.51 %) follow closely. Other states growing faster than 2 % include Nevada, New Jersey and Arizona. That explains why these jurisdictions top the fastest growing states lists. For investors, the mix of rising demand and constrained supply can translate into higher rents and capital appreciation.
What is cap rate and why does it matter?
The cap rate, short for capitalisation rate, is the most common measure of the profitability of a rental property. The formula is simple: divide annual net operating income (NOI) by the property value and multiply by 100. For example, a house that generates $12,000 in NOI and is worth $200,000 has a cap rate of 6 %. This indicator allows you to quickly compare properties and different markets.
A cap rate between 4 % and 12 % is generally considered healthy, though it varies by region and property type. It doesn’t account for financing or the potential for improvements. Make sure to combine it with other data such as local supply and demand, job growth and household income percentile to predict performance.
Rental market and inventory
The Great Reset report highlights that rental housing supply increased significantly in 2025, with more than 500,000 new multifamily units delivered. Even so, demand remains strong: vacant apartments are filled in about 41 days on average and 63 % of tenants renew their leases. This suggests that housing inventory is balancing. Days on market for homes listed for sale climbed to 51 days in 2025, and only about 25 % of homes sell above the asking price.
In this context, many people wonder: are house prices going down? The answer depends on the area. Average appreciation has been modest, but values declined in some cities. Forecasts from Zillow and the National Association of REALTORS® project growth between 2 % and 4 % for 2026, so prices may continue to move sideways. For investors, the best time to buy a house is often late autumn and winter, when there are fewer competitors and sellers are more willing to negotiate.
How to take advantage of these trends
Use analytical tools
Good real estate decisions require data. Platforms like MyRealEstateAnalytics.com provide dashboards with up‑to‑date information on median prices, rents, inventory and tax rates. They also let you explore high‑growth cities and the states with low taxes, and perform your own comparative market analysis.
Explore the sale‑leaseback model
Sell2Rent has popularised the sale‑leaseback model: homeowners sell their house at a discount and remain as tenants, while the investor acquires an occupied property at a price 15 % to 30 % below market value. The company offers a quick process (sometimes under 30 days) and handles comparative analyses, inspections and other paperwork. For investors, this reduces vacancy risk and provides immediate income. Sell2Rent operates in all 50 states and lets you discover the investment model online.
To register and see available property offers, visit https://bit.ly/4c1ZUBN. If you want to learn more about how the investment model works and see real examples, check out https://bit.ly/3Uisbf7. Both resources guide you step by step and give you access to opportunities that rarely reach the traditional market.
Conclusion
The housing market of 2026 is characterised by a healthy slowdown after the frenzy of recent years. Even though mortgage rates remain high and inventory is tight, small investors can find opportunities in fastest growing cities in US like Princeton or in states with low taxes like Louisiana or Florida. Knowing what a cap rate is, how to conduct a comparative market analysis and using data from sites like MyRealEstateAnalytics will give you a competitive edge.
Finally, don’t forget to explore Sell2Rent’s innovative sale‑leaseback model if you’re looking for properties with tenants already in place. With the right information, patience and a clear strategy, you can navigate housing market trends and position your portfolio for the real estate forecast next 5 years. It’s time to become the protagonist of your own investment story.
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