The Business Record recently assembled a group of experts to talk about the Des Moines area housing sector and its outlook for 2026.

Panelists who took part in the Business Record’s Project515 on housing included Curtis Brown, assistant city manager, city of Urbandale; Robert Hartwig, president, Iowa Bankers Mortgage Corp.; Chris Pickard, owner, Sage Homes, and president of the Home Builders Association of Greater Des Moines; Scott Steelman, real estate agent with Iowa Realty Co. and first vice president, Des Moines Area Association of Realtors; and Matt Weller, vice president of development, Hubbell Realty Co.

The following takeaways from the Dec. 4 virtual event have been edited for clarity.

What’s the most important trend you’re seeing in today’s mortgage market and how is it shaping buyer behavior?

Hartwig: In the past six to nine months, we’re seeing a big improvement in housing inventory across the Des Moines metro, as well as some improvement in our smaller towns. I think the main reason for this is that a lot of homebuyers are feeling like [interest rates for home mortgages are] where they are going to be for a while. If you look back in our history over 60 years, that 6% mortgage is really very close to the median of where we’ve been historically over time. I think that’s helping free up inventory as people are starting to move up and trade houses.”

What are the obstacles preventing home builders from producing enough homes, especially at that affordable level?

Pickard: The top three are land, capital and compliance. Land costs have rolled up significantly in the last few years. With [interest] rates being where they are at, both from a mortgage lending and commercial lending perspective, it’s harder for folks to make that mortgage payment. For builders to go out and build speculatively, the higher lending environment means we’ve got about half the amount of time for that house to sit on market before we start to face margin compression. Compliance is also a big thing. The ever-increasing cost of regulation is a huge contributing factor to what we see: The cost on the development side that are associated with stormwater regulation and the increasing requirements for road lifespan are huge. We’ve got a multitude of building code and energy code changes that have come through in the last few years, and they’ve had a drastic impact on costs.

Are we in a buyers’ market or sellers’ market?

Steelman: The computer spits out that it’s even. In April of this year, in the Des Moines area, our inventory cap went over 4,000 houses [for sale] for the first time since 2022 and we’ve maintained that over 4,000 level. Right now, we’re at 4,322. That’s a little more than we’ve been carrying for the past couple of years. The breakdown of that is 67%, or 2,900, are existing homes, and about 33%, or 1,400, are new builds. Of the new builds, 400 are townhomes or condominiums. We are starting to see two buying pools for [townhomes and condos]: The retiree who is coming out of an older, larger home and who is competing for that townhome-condo price point. A lot of developers and builders have started building a little better product, and the price points have increased with that bigger footprint. That’s caused us to rethink some of the buyers that we would have naturally had for that kind of a product.

What trends are you seeing in the multifamily sector and how have renter preferences changed in recent years?

Weller: Our renters are pairing up into roommate scenario situations or paring down into smaller, more affordable units. What does that mean? Instead of renting a 750-square-foot, one-bedroom apartment, they are looking at a [smaller] one-bedroom apartment. What that has meant for us is developing more efficient units. Going from a 750-square-foot, one-bedroom unit down to a 650-square-foot, one-bedroom is something we’re going to see more of. [Renters] are maxed out on what they want to pay for rent. They can pay more, they just don’t want to. The rent-to-income ratio has actually decreased over the past 10 years. People’s incomes have increased at a faster rate than what their rent has increased. They just don’t want to pay more than X-number of dollars.

Tell us about Urbandale’s efforts to provide affordable and attainable housing.

Brown: The first thing we’re doing is preserving what we call the naturally occurring affordable housing. In our community, that is those neighborhoods east of 86th Street where we’ve got moderately priced houses but still solid construction, in a good school district. We’re working to encourage homeowners to invest in their properties, create more energy efficiency. And then of course, we are working on our revitalization of downtown, which is both the commercial core but extends several blocks … into the residential neighborhoods. We hope the approval of the downtown master plan, which happened this summer, will also have ripple effects out to the neighborhoods to really preserve that moderately-priced housing that’s still available here in the core of the metro. We’re also partnering with developers in innovative and creative ways. The View on Hickman [at 7627 Hickman Road] is a conversion of the former Motel Relax into 60 affordable units. We’re working on the Line Seven [apartment project] with Hubbell Realty Co. and we’re working on the conversion of a former motel site at 108th and Hickman into affordable housing.

More online: Visit businessrecord.com/video to watch the Dec. 4 Project515 discussion on the housing sector.