Americans face decision on real estate, small business investing

For decades, real estate has been one of the most reliable ways for Americans to build long-term wealth. It rewards patience, requires only a fraction of the purchase price in cash up front, and hands owners direct control over an asset that has historically appreciated.

That path has grown more complicated in 2026. The average 30-year fixed mortgage rate sits near 6.51%, according to Freddie Mac, up from a recent low of 5.98% in late February, and the fast price growth that defined the market for much of the past five years has started to cool.

The latest snapshot arrived Tuesday, when the National Association of Realtors reported that pending home sales increased 1.4% in April from the prior month and stood 3.2% above year-ago levels. With borrowing costs elevated and price growth fading, few expected buyers to step up this spring, which is what made the increase a surprise. Yet the figures beneath it show appreciation still losing steam.

Days later, on Friday's episode of the BiggerPockets podcast, the discussion turned to a different way of putting capital to work. Dave Meyer, BiggerPockets' chief investment officer, hosted Will Smith, host of the Acquiring Minds podcast, to make the case for buying small businesses.

"Buying small businesses has emerged as a popular alternative or, I would argue, as a popular complement to real estate investing in recent years," Meyer said.

For Americans with capital to deploy, that raises a real question: keep betting on real estate, or put money into a business instead?

What NAR's latest housing data shows

The Pending Home Sales Index, a forward-looking gauge that tracks contract signings before deals close, climbed 1.4% in April and finished 3.2% higher than a year earlier, according to the National Association of Realtors.

Writing for NAR, Melissa Dittmann Tracey reported that the rebound caught some economists off guard, since many had expected the spring buying season to stay subdued. Contract signings rose fastest in the Northeast, up roughly 7%, with the Boston area accounting for much of the regional strength.

Other corners of the market told a similar story. Builders sold 7.4% more new single-family homes in March than a month earlier, a figure that also stood 3.3% above year-ago levels, according to U.S. Census Bureau data. This data shows buyers, despite challenging conditions, are still showing up.

What has changed is the pace of price growth. Existing-home values were up a slim 0.9% from a year earlier in April, a marked slowdown from the brisk appreciation of recent years. Prices remain firm across most of the country, with 71% of the 235 metro markets NAR tracks posting first-quarter gains, but the routine double-digit jumps that defined the post-pandemic stretch have grown rare.

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Foreclosure-driven bargains are scarce as well, with distressed sales making up only 2% of April activity. Competition has not disappeared either, as the typical listing still drew an average of 2.5 offers.

The takeaway for investors is a market that remains resilient but no longer leans on appreciation to do the heavy lifting. That shift has more buyers asking where a fresh dollar of capital is best put to work, and on the BiggerPockets episode, Meyer framed real estate and small business as close cousins.

"In our industry, you buy a property, you get it rented, you run it well, profit and repeat," Meyer said. "Similar with small businesses. But these small businesses are sort of like rental properties on steroids, at least in terms of how much cash flow they can generate."

What buying a business could mean for investors

The alternative Meyer raised has a name in entrepreneurial circles: ETA, or entrepreneurship through acquisition. Rather than launch a company from nothing, a buyer purchases one that already has customers, revenue, and a track record.

"ETA, entrepreneurship through acquisition ... is the idea of becoming an entrepreneur or business owner by buying an existing business as opposed to starting one from scratch," Smith said.

The math is part of the appeal. Small businesses often trade at three to four times their annual earnings, far below the multiples investors pay for income-producing real estate. A buyer typically needs only about 10% of the purchase price in cash through a Small Business Administration loan, and even that equity can be raised from outside investors. A wave of retiring baby boomer owners without succession plans is adding to the supply of available companies.

Smith was direct about the trade-offs. Buying a business is not a passive investment, and he cautioned that the path is often oversold.

"This is highly active," he said. "And not only is it active 40, 50, 60 hours a week. It's also really hard."

Competition for quality deals is real, and Smith said the so-called silver tsunami of boomer sales is partly hype. For those drawn to the returns without the workload, he pointed to a quieter route: investing $25,000 to $50,000 alongside someone else who is buying and running the business - although that requires significant vetting of the operator.

None of this closes the door on real estate. NAR's data describes a market that is still functioning, still drawing buyers, and still building equity for owners. The decision facing investors is less about abandoning one asset than about deciding which proven model fits their capital, their time, and their appetite for risk.

"I've personally grown an interest in ETA myself and it's something I think about a lot," Meyer said.

Key takeaways for 2026 entrepreneurs and real estate investors

• Pending home sales beat expectations: NAR's pending home sales index advanced 1.4% from March and ran 3.2% ahead of the prior year, a rebound few forecasters had penciled in after a slow start to spring.
• Home-price growth is losing momentum: existing-home values rose a marginal 0.9% over the past year as of April, NAR reported, and with distressed sales running at only 2% of all transactions, the foreclosure discounts some buyers wait for have largely vanished.
• Buying a small business is the other path: on the BiggerPockets podcast, Acquiring Minds host Will Smith laid out entrepreneurship through acquisition, in which buyers purchase an established company. Such businesses often sell for three to four times annual earnings, with a Small Business Administration loan covering all but roughly 10% of the price.
• ETA is demanding, not passive: an acquired business can become a 40- to 60-hour-a-week job, Smith warned, and he flagged that the opportunity is often oversold as competition for quality deals intensifies.
• There is a lower-commitment way in: rather than operate a business directly, Smith noted that investors can put $25,000 to $50,000 into someone else's acquisition, gaining exposure to the model without running the company.

Related: Americans face major decision after new mortgage rate forecast

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This story was originally published May 25, 2026 at 7:28 PM.