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Dec 31: 🎆 No Fireworks for Rates (And That’s a Good Thing)

Closing out 2025 with stability. Your 11th-hour checklist for a profitable 2026 start.

Author

Alex Veytsman
December 31, 2025

🎊 The Lending Letter 🏡

New Year's Eve 2025: Last Call for Tax Moves & Rate Updates

Happy New Year's Eve! 🥂 While you're planning your countdown party and pretending you'll actually stay awake until midnight, let's talk about something that could save you thousands: what you can still do TODAY before the tax year closes. Plus, we've got your mortgage rate update because, well, that's literally our job. 😎

📊 TODAY'S 30-YEAR FIXED RATE
6.20%
According to Mortgage News Daily | Unchanged from 12/30/25

🎆 Rates Ring Out 2025 at 6.20%

We're closing out 2025 with rates sitting steady at 6.20%, which is... honestly pretty anticlimactic. No fireworks here. But you know what? Stability isn't sexy, but it IS useful when you're trying to make financial decisions. 📉

The bond market is basically in holiday mode, with most traders already checked out mentally (even if they're physically at their desks). We've been hovering in this 6.15%-6.30% range for the past few days, and unless something wild happens at tonight's party, we'll probably start 2026 right around here. 🎉

🔮 What Does 2026 Hold?

The million-dollar question everyone's asking. Here's what we know: The Fed has signaled potential rate adjustments in 2026, but remember—Fed rates and mortgage rates are distant cousins, not twins. According to Freddie Mac's analysis, mortgage rates are more influenced by inflation expectations and economic growth signals than Fed decisions alone.

Translation: Don't put your life on hold waiting for some magical rate drop. If you find the right property with numbers that work, that's your green light. 🚦

💰 Lender Promos: Make Moves Before Midnight

🏠 Looking for a Loan on Any Property? New year, new opportunities. Whether you're buying your first home or expanding your portfolio, fill out this form and we'll connect you with lenders who are hungry to start 2026 strong.

🏢 Investment Property Goals for 2026? Smart investors are already planning their next acquisitions. Connect with investment specialists here who can help you map out your 2026 buying strategy.

🏖️ STR/Airbnb Ambitions? The short-term rental market continues to evolve, and positioning yourself early in 2026 matters. Talk to STR financing specialists who understand the unique lending landscape for vacation rentals.

⏰ IT'S NOT TOO LATE: Last-Minute Tax Moves

Listen, I know you're reading this at like 2pm on New Year's Eve thinking "what can I possibly still do?" PLENTY. Let's go through what's still on the table: 🏃

💸 Moves You Can Still Make TODAY:

1. Prepay Your January Mortgage Payment
If you pay your January mortgage payment today (December 31st), that interest is deductible on your 2025 taxes. According to IRS Publication 936, you can deduct mortgage interest in the year it's paid, not due. This is especially powerful if you're on the cusp of a tax bracket. One extra payment could push your deductions over the standard deduction threshold. 📊

2. Max Out Retirement Contributions (If You Haven't)
You have until midnight tonight to make Traditional IRA contributions for 2025 if you're self-employed or have self-employment income. That's up to $7,000 ($8,000 if you're 50+) that reduces your 2025 taxable income. Call your brokerage. NOW. ⏱️

3. Property Tax Prepayment Strategy
If your 2026 property tax bill is already assessed, you might be able to prepay it today and deduct it on your 2025 return. Check with your local tax collector's office. Some counties accept payment for the next year, some don't. Worth a phone call. 📞

4. Investment Property Repairs & Maintenance
Own rental properties? Any repairs or maintenance you pay for today are 2025 deductions. That fence repair you've been putting off? The HVAC tune-up? Get them done and paid for TODAY. According to IRS guidelines for rental property, repairs are immediately deductible (unlike improvements, which must be depreciated). 🔧

5. Cost Segregation Studies = Accelerated Depreciation
If you bought an investment property in 2025 and haven't done a cost segregation study yet, you can still get one and claim accelerated depreciation on your 2025 return. This isn't a "today only" thing, but it's worth mentioning because it can create five-figure deductions. Get an estimate here and have it ready for tax filing season. 💰

🧠 Educational Corner: The "Rent vs. Buy" Math for 2026

As we head into a new year, let's revisit the eternal question: Should I rent or should I buy? The answer in 2026 is... well, it's complicated. But let's break it down with actual math. 🔢

The Traditional Rule: If you plan to stay somewhere less than 5 years, rent. More than 5 years, buy. But that rule was written when rates were 3% and homes weren't appreciating at 4-5% annually. Times have changed. ⏰

🎯 The 2026 Reality Check:

Scenario: $400,000 Home Purchase vs. Renting

Buying Costs (Monthly):
• Mortgage (6.20%, 20% down): ~$1,970
• Property tax: ~$500
• Insurance: ~$150
• Maintenance (1% annually): ~$333
• Total: ~$2,953/month

But Wait, There's More (The Good Stuff):
• Tax deduction on mortgage interest & property tax: ~$400/month saved
• Principal paydown: ~$620/month (that's YOUR money)
• Appreciation at 4% annually: ~$1,333/month in equity
• Net monthly cost: ~$600

Comparable Rent: ~$2,500/month (and rising with inflation)

According to Zillow's rent vs. buy analysis, the breakeven point in most markets is now under 3 years, not 5. That's a huge shift. 📈

The Catch: This assumes you have the down payment, good credit, and stable income. If you don't have those ducks in a row yet, there's no shame in renting while you build toward homeownership. But if you're financially ready and wavering because of rates? Run the numbers. They might surprise you. 🦆

🏘️ For the STR Investors: 2026 Market Predictions

Short-term rental investors, gather 'round. Let's talk about what 2026 might look like for your favorite side hustle (or main hustle, no judgment). 🏖️

Trend #1: Regulation is Coming
More cities are implementing STR regulations. Some are caps on the number of properties, others are licensing requirements or occupancy limits. The Wild West days are over. But here's the thing: smart investors see this as a moat, not a wall. Fewer operators = less competition = better returns for those who play by the rules. If you're serious about STRs in 2026, work with STR specialists who understand local regulations. 📋

Trend #2: Experience Matters More Than Location
Travelers are getting pickier. A basic 3-bed house isn't cutting it anymore. They want hot tubs, game rooms, themed decor, and Instagram-worthy moments. This means opportunity for operators willing to invest in their properties. Need to upgrade your STR? We have a partner offering 0% interest financing for furnishings and amenities. Turn that basic rental into a destination property. 🎯

Trend #3: Mid-Term Rentals (MTRs) Are Having a Moment
30-90 day stays are becoming popular with remote workers, travel nurses, and corporate relocations. Less turnover than nightly rentals, better cash flow than long-term tenants. Worth considering as part of your 2026 strategy. 💼

Tax Play: Remember that cost segregation study we mentioned? For STR properties where you materially participate (spend 100+ hours managing it), you can often use accelerated depreciation losses against your W-2 income. This is POWERFUL. Get a cost seg estimate and discuss with your CPA. It could be worth $20,000+ in tax savings. 💰

🎓 Personal Finance Hack: The "Tax Gain Harvesting" Strategy

💡 Making Money by... Paying Taxes? Yes, Really.

Everyone knows about tax-LOSS harvesting (selling losers to offset gains). But have you heard of tax-GAIN harvesting? It's criminally underutilized. Here's how it works: 🧠

The Setup: If your income is below certain thresholds ($96,950 for married filing jointly in 2025), you pay 0% capital gains tax on long-term investments. ZERO PERCENT. 🎯

The Strategy: Sell winning investments in your taxable brokerage account, pay $0 in taxes, then immediately buy them back. You've just "stepped up" your cost basis without any tax hit.

Real Example:
You bought $10,000 of a stock 5 years ago. It's now worth $20,000. You sell it, pay 0% capital gains (because your income is under the threshold), and immediately buy $20,000 of the same stock. Your new cost basis is $20,000 instead of $10,000.

Why This Matters: When you eventually sell in the future (maybe when you're in a higher tax bracket), you only pay taxes on gains above $20,000, not $10,000. You've permanently eliminated $10,000 of future tax liability. According to tax optimization strategies, this is one of the most powerful moves for people in the 0% capital gains bracket. 📊

Who Should Do This:
• Early in your career when income is lower
• Taking time off work or between jobs
• Early retirees living off savings before Social Security kicks in
• Anyone with investment gains in a taxable account who's under the income threshold

The Catch: Unlike tax-loss harvesting, there's NO wash sale rule for gains. You can sell and immediately rebuy the same investment. This is 100% legal and IRS-approved. 🎉

Action Item: Review your taxable brokerage account. If you have long-term gains and your 2025 income is under $96,950 (married) or $48,475 (single), consider harvesting those gains before midnight tonight. Free money. 💰

📊 Market Intel: What Actually Happened in 2025

Let's take a quick look back at what 2025 taught us about real estate and mortgages: 📈

Inventory Loosened Up (Finally)
According to Realtor.com data, active listings increased throughout 2025. Not to pre-2020 levels, but better than 2023-2024. This gave buyers more options and slightly more negotiating power. The "everything sells in 24 hours" era is behind us. 🏡

Rates Stayed Higher Than Anyone Wanted
At the start of 2025, everyone predicted rates would drop to 5%. Spoiler: they didn't. We spent most of the year in the 6-7% range. The lesson? Stop trying to time the rate market. Freddie Mac's historical data shows rate predictions are about as reliable as weather forecasts two weeks out. ☁️

First-Time Buyers Got Creative
Down payment assistance programs saw record usage. FHA loans had a resurgence. Parents co-signed mortgages for adult children. The 20% down payment "rule" officially became a suggestion. Smart buyers figured out how to make the math work. 💪

Investment Properties Stayed Strong
Despite higher rates, rental property purchases remained robust. Why? Because rental demand stayed high, and investors understand that cash flow + appreciation + tax benefits still beats most alternative investments. 🏢

🎯 Your 2026 Game Plan

Alright, let's talk about how to win in 2026. Here's your strategy: 🏆

For Buyers: Stop waiting for perfect conditions. They don't exist. Instead, focus on finding properties that work at TODAY's rates. If rates drop later, refinance. If they don't, your property probably appreciated anyway. Remember: you're not marrying the rate, you're marrying the house. 💍

For Investors: 2026 is about strategic acquisitions, not quantity. Focus on properties with strong fundamentals: good locations, solid cash flow potential, and realistic appreciation prospects. And for the love of all that is holy, run your numbers conservatively. If it barely works on paper, it definitely won't work in reality. 📊

For STR Operators: Invest in experience and compliance. The operators who thrive in 2026 will be those who treat their STRs like legitimate businesses, not side hustles. Professional photography, responsive management, unique amenities, and perfect regulatory compliance. That's the winning formula. 📸

🎯 Ready to Make 2026 Your Year?

Here's your full arsenal of resources:

🌟 The Bottom Line

As we close out 2025 and ring in 2026, here's what matters: The best time to start building wealth through real estate was 10 years ago. The second best time is right now. 🎯

Rates at 6.20% aren't the bargain basement prices of 2020-2021, but they're workable. And when you factor in tax advantages, appreciation, and the power of leverage, real estate remains one of the most accessible wealth-building tools available to regular people. 💪

2026 won't wait for you to feel "ready." The market doesn't care about your comfort level. But it does reward people who educate themselves, run the numbers honestly, and take informed action. Be that person. 🚀

Now go enjoy your New Year's Eve. You've earned it. And if you make it to midnight without falling asleep on the couch, you're officially winning at life. 🥂

Cheers to 2026! May your rates be low, your equity high, and your inspections clean. 🎊

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See you Thursday (January 1, 2026) for the first newsletter of the new year!

Disclaimer: This newsletter is for informational and entertainment purposes only. Rates and terms vary by lender and borrower qualifications. Tax strategies discussed should be reviewed with a qualified tax professional. Always consult with licensed professionals for your specific situation. Happy New Year! 🎉