As everyone in real estate knows, the market is in a constant state of ebb and flow. While the same trends have been persistent in housing in recent years, the ways in which they affect the market and what challenges are dominant have been in a state of change.
Certain trends, such as the downward push in home-price growth coupled with an upward push in housing inventory, have led to intense speculation and media coverage as of late. However, some of the trends that were at the top of the headlines earlier this year have fallen off in conversation. A new report from Cotality breaks these trends down to catch everyone up.
Here’s what Cotality had to note about some more quietly trending housing conversations:
The investing conversation
Investors in the housing market have grown into a larger conversation as President Donald Trump pushed for restrictions on large institutional investors purchasing single-family homes (some of which are in a stalled federal omnibus bill) in order to provide some relief to housing market challenges.
Cotality noted that since the idea of a ban was first introduced by Trump in January, large investors have been pulling back from the market, with purchases dropping from 250 to 100 a day. At the same time, however, small investors boosted their own purchase share by about the same amount, leaving overall investor activity at around the same level.
These smaller time investors have been taking over the market in place of the large investors, with the report stating that investors with under 10 properties bought 20% more homes than they sold in 2025. This is compared to 6% more properties sold than bought for non-investors.
Small investors also have a tendency to hold properties long term—about 40% keep properties for a decade or longer—which, in turn, has passed along rising property costs to tenants in the form of a 30% rent leap over the past five years, pushing rent prices to 39% of tenants’ budgets.
The construction outlook
Housing construction has been particularly challenged within recent years due to supply chain and affordability issues, beginning with the pandemic and continuing through today’s problems arising at least partly from tariffs.
Cotality noted that the aforementioned tariffs, coupled with the months of geopolitical pressure faced from the Iranian conflict, has continued to raise material and component costs for housing construction.
The report stated that material and component costs rose 4.2% year-over-year in May and home repair service costs increased 7.4%, with construction and reconstruction costs now having shot up 58% since 2018 (almost double the 34% increase in inflation). The fastest rising material costs have been copper pipes (+5.8%) and aluminum conduits (+5%), both of which the report noted were affected by tariffs.
However, not all news within construction has been on the downside. The movement to create more zoning and permitting for Accessory Dwelling Units (ADUs) in order to combat housing construction and other market affordability issues has been on the rise.
Cotality noted that more permits for ADUs were issued than for conventional housing for the first time ever in the LA and San Francisco metro areas (5,100 ADU permits vs. 5,000 conventional permits in Q1 2026). Permitting for ADUs was up 8% in Q1 2026, while conventional housing permits were essentially flat. In San Francisco, specifically, ADU permits shot up 23% year-over-year in Q1, while conventional permits dropped 36%.
California’s ADU push actually accounted for more than two-thirds of all 13,000 ADU permits in Q1 2026, which the report noted has been steady over the last three years as the state made historic reforms in order to foster this trend due to high housing costs and widespread unaffordability. From 2016 to 2026, ADU permitting has grown 15 times the size in California, while it has only doubled for the rest of the U.S.
