Debt, Deficit, Real Estate, and Investor Sentiment
by REI INK
Authoring a story about the different facets of the economy for a monthly print publication is difficult because in this current environment, impactful events and economic numbers seem to happen and/or change on a daily, if not hourly, basis. As a result, the information presented today may not be the same when the magazine is published. With that said, the information in this story is current as of August 19, 2026.
In addition to the regular economic topics, this story will also highlight some key real estate data from the industry’s most trusted sources as well as some data and points of interest from the Summer 2026 RCN Capital Investor Sentiment Index.
The National Debt
The U.S. national debt is approximately $40.04 trillion, having crossed the $40 trillion threshold according to live figures from the U.S. Treasury Fiscal Data tracker. This amounts to roughly $119,500 for every person living in the United States.
According to an article in CNBC, debt financing for the full year is behind only Social Security and Medicare as a proportion of government expenses. For the fiscal year to date, the U.S. has paid out $1.17 trillion on the $39.9 trillion national debt, of which $32.1 trillion is held by the public. Debt servicing costs in the same period a year ago totaled $1.01 trillion. Net interest, or the Treasury’s gross interest minus the interest it receives, totaled $931 billion.
The Deficit
The U.S. budget deficit soared to its highest monthly level in more than five years amid a surge in Medicare costs and as interest on the federal debt continued to weigh on the nation’s fiscal picture, the Treasury Department reported on August 12, 2026.
In addition to the big single-month jump, the collective red ink across the first 10 months of the government’s fiscal year rose to nearly $1.8 trillion and surpassed the same period in 2025.
Mortgage Rates
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.67% as of August 13, 2026, down from a week prior when it averaged 6.69%. A year ago at this time, the 30-year FRM averaged 6.58%.
The 15-year fixed-rate mortgage averaged 5.96%, down from the previous week when it averaged 6.01%. A year ago at this time, the 15-year FRM averaged 5.71%.
Share of Equity-Rich Homes Near Five-Year Low
On August 20, 2026, ATTOM, the leading provider of property data, AI-powered intelligence, and real estate analytics solutions, released its second quarter 2026 U.S. Home Equity & Underwater Report, which shows that 41.1% of mortgaged residential properties in the country were equity-rich, meaning the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market value.
That was down from 43.3% in the first quarter of the year and from 47.4% in the second quarter of 2025. After four straight quarters of decline, the national share of equity-rich homes is at its lowest point in nearly five years.
Meanwhile, 3.2% of properties in the second quarter of 2026 were considered seriously underwater, meaning the combined estimated balances of loans secured by the properties were at least 25% more than the properties’ estimated market value. That was the same rate as the previous quarter, but up from 2.7% at the same time last year.
“These two measures of home equity strength, the rates of equity-rich and seriously underwater homes, remain healthier than they were prior to 2020,” said Rob Barber, CEO of ATTOM.
“However, both have been moving in less favorable directions over the past year, suggesting a trend worth watching.”
U.S. Home Prices Rise 2.6%
Homes.com, a CoStar Group leading online residential marketplace, released its July 2026 housing market report, showing the national median sale price at $400,000, up 2.6% from July 2025. Home sales increased 2.9% year over year, while homes for sale rose 4.4% from a year earlier. Taken together, those figures point to a housing market that has remained firmer than many observers expected given the increase in mortgage rates during the spring and summer.
Even with relatively steady national trends, housing market conditions continued to differ across major metropolitan areas. Several large markets posted stronger home-price growth, including Chicago, Baltimore, Pittsburgh, and New York, while prices were softer in markets such as Raleigh, Seattle, Dallas-Fort Worth, and San Jose. These differences underscore the increasingly important roles that local supply and demand play in shaping market outcomes.
Differences were also evident across housing types. Nationally, single-family home prices increased 2.5% from a year earlier, compared with gains of 2.3% for condos and 0.8% for townhomes. Inventory growth was strongest among townhomes, while single-family homes and condos experienced more moderate increases in homes for sale.
RCN Capital Investor Sentiment Index
Real estate investor sentiment fell for the second consecutive quarter, hitting an all-time low index score of 84 in the Summer 2026 RCN Capital/CJ Patrick Company Investor Sentiment Index (ISI)™. The index score was three points lower than the prior quarter and dropped by 18 points year-over-year. The drop was almost entirely due to how investors view current market conditions. Only 26% of investors believe market conditions are better than they were a year ago, the lowest share on record, while 45% of respondents believe market conditions have worsened, the highest percentage recorded in the history of the survey. Investors were more positive in their responses to the other metrics analyzed in the survey — the outlook for future market conditions, home price trends, and plans for property purchases — suggesting at least some optimism going forward.
“Investors, both fix-and-flip and rental property investors, clearly feel that market conditions today have become more and more difficult,” said RCN Capital CEO, Jeffrey Tesch. “In addition to the ongoing conflict in Iran, rising finance costs, limited inventory, escalating home and renovation costs and downward pressure on rental rates are all contributing factors for their increased pessimism.”
The major challenges cited most often by investors in the Spring survey were the high cost of financing, rising home prices, lack of inventory, rising material and product costs, and rising insurance premiums.
“Real estate investor sentiment appears to be impacting investor purchase activity,” said Rick Sharga, CJ Patrick Company CEO. “Real estate investors purchased 23% fewer homes in the first quarter of 2026 than they did in the previous quarter and in the first quarter of 2025. The survey also shows that 32% of the respondents don’t plan to buy any properties at all this year, and only 9% plan to buy more than they did a year ago.”
