The Fed Cut Rates But What Does That Mean for Your 2026 Income?

The Federal Reserve’s recent decision to cut interest rates has many HOA and condo management company owners wondering what to expect for next year’s revenue. Will home sales rise? Will profitability improve? What happens to reimbursement income?

The reality is nuanced. Yes, lower rates typically boost housing activity, but in this environment, the upside may be modest. And while one side of the income statement may benefit, another may soften.

Here’s how to think about your 2026 income outlook and how to plan accordingly.

Housing Income Will Likely Rise, But Not Dramatically

One of the most direct ways rate cuts affect your business is through resale-driven income: transfer fees, estoppels, and escrow-related charges. These income streams are tied to home sales and re-financings, and they tend to be high-margin.

Lower borrowing costs generally increase home-buying activity, which is good news for management companies. But this time, the effect will likely be moderate.

Many homeowners still have ultra-low mortgage rates from 2020–2021 and prior periods and are hesitant to move unless absolutely necessary. So while a rate cut improves affordability, it’s unlikely to cause a surge in listings or purchases.

That means 2026 is expected to bring a gradual increase in home sales, not a wave. Industry forecasts suggest a 4%–6% increase in national housing activity, which translates to a similar bump in resale-related income for management companies.

If you’re also growing your portfolio, those two factors combined (more units under management and more transactions per unit) can compound the benefit to your bottom line.

While housing activity improves, one area to watch closely is reimbursement income, which is typically tied to higher interest rate environments.

Planning for Changes in the P&L

To build a realistic and balanced budget for 2026, consider these steps:

• Start with 2025 actuals: Use your year-end data for transfer, estoppel, escrow, and reimbursement income as your baseline.
• Apply a 4%–6% increase to resale-related income based on expected housing activity.
• Forecast your unit growth separately, then layer it in for a more complete picture.
• Assume a modest decline in reimbursement income
• Use seasonality data to shape monthly projections. Spring and early summer typically drive higher resale volumes, while late fall and winter are slower.
• Align incentives and staffing accordingly so your team is positioned for steady, predictable growth rather than a sudden spike.

The goal is not to guess at a boom, but to budget with discipline and use any upside as a bonus, not a baseline.

Final Thoughts

Rate cuts can be a welcome tailwind, but they don’t work magic overnight. Housing income may grow in 2026, but probably not dramatically. And reimbursement income could dip, creating a mixed picture overall.

For management company owners, the key is to plan ahead. Know which parts of your income are rate-sensitive and adjust your budget accordingly. A clear, disciplined financial forecast (even in a year of modest change) strengthens your operations and positions you for future growth or sale.

At CAM Advisors, we help management company owners plan ahead, refine their budgets, and understand how macro shifts like interest rate changes flow through to company value. If you're planning for 2026 or thinking about an exit in the next few years, we'd love to support you.