The 2026 'Golden Window': Why the Recent Interest Rate Drop and CMS Stability Make This Quarter the Peak Time to Sell

If you've been waiting for the right moment to exit your home health or hospice agency, this quarter may be the best opportunity you'll see in years. After months of rate uncertainty and regulatory flux, two major forces have aligned: interest rates have stabilized at predictable levels, and CMS has delivered the first clear rate guidance since the pandemic, replacing fear with actual numbers.

For the first time since 2021, buyers like Senate Healthcare can underwrite acquisitions with confidence, and that confidence translates directly into valuation multiples for sellers who move now.

Quick-Scan Summary

Who this is for:

• Home health or hospice owners in the $2M to $10M revenue range considering a sale or partnership in the next 12 to 24 months

• Operators who delayed exit planning in 2024 or 2025 due to rate volatility or M&A market uncertainty

• Agencies with strong clinical operations but concerned about whether "now" is the right time to sell

Key takeaways:

• Q4 2025 hospice M&A deal volume surged 83% quarter-over-quarter, signaling the market has thawed

• CMS finalized a 1.3% rate decrease for 2026 home health, far better than the originally proposed 6.4% cut, giving buyers clarity to move forward

• Interest rate stabilization (around 6.0% to 6.5%) has made acquisition financing predictable again, unlocking strategic buyer appetite

• Waiting for 2027 risks losing the timing advantage as inventory normalizes and competition among sellers increases

• Senate Healthcare is actively acquiring home health or hospice agencies that meet our clinical quality and operational standards

The Market Context: Why Q1 2026 Feels Different

For the past two years, agency owners have been stuck in a holding pattern. Interest rate volatility made acquisition financing expensive and unpredictable. Proposed CMS rate cuts floated every quarter, creating anxiety about whether agencies could maintain margin. And private equity buyers, who dominated M&A activity from 2019 to 2022, pulled back to reassess their portfolios.

That uncertainty has lifted. According to Mertz Taggart's latest analysis, hospice M&A deal volume jumped 83% from Q3 to Q4 2025, marking the strongest quarter since early 2023. The "fog" that kept buyers on the sidelines has cleared, and strategic acquirers like Senate Healthcare are now actively evaluating acquisitions.

Why? Two specific catalysts have created what industry analysts are calling a "golden window" for sellers.

Catalyst #1: Interest Rate Stability (Not a Drop, But Predictability)

Let's be clear: rates haven't dropped dramatically. But they have stabilized. After peaking above 7% in late 2023, acquisition financing rates have settled into a predictable range of approximately 6.0% to 6.5%, according to recent market data. For buyers, predictability is more valuable than a half-point drop because it allows us to model acquisition scenarios with confidence.

Here's what that means for you as a seller: when buyers like Senate Healthcare can lock in financing at a known rate, we can offer stronger valuations. Financing uncertainty creates a "risk discount" that gets baked into purchase price. Remove that uncertainty, and the discount disappears.

Valuation example:
A hospice agency generating $1.2M in adjusted EBITDA might have been valued at 4.0x EBITDA in mid-2024 due to financing risk, resulting in a $4.8M purchase price. In today's stable rate environment, that same agency could command 4.5x to 5.0x, pushing the valuation to $5.4M to $6.0M. The difference? Buyers can now confidently underwrite the deal.

Catalyst #2: CMS Rate Clarity Replaced Fear with Facts

In November 2025, CMS published its final rule for the 2026 Home Health Prospective Payment System, finalizing a 1.3% rate decrease. While any cut stings, the final number was dramatically better than the 6.4% reduction originally proposed earlier in the year.

For agencies that had been bracing for a worst-case scenario, the final rule was a psychological and financial win. More importantly, it gave buyers clarity. Strategic acquirers like Senate Healthcare can now model 2026 and 2027 cash flows with actual CMS guidance instead of guessing. That clarity directly impacts how we value agencies.

As Healthcare Provider Solutions noted in its analysis, the shift from a proposed 6.4% cut to a final 1.3% decrease removed the single biggest cloud hanging over home health valuations in late 2025. Buyers no longer need to assume margin compression when underwriting deals.

For hospice agencies, the story is similar. The fiscal year 2026 hospice payment rule delivered relative stability, avoiding the dramatic swings that had rattled the market in prior years. Hospice News highlighted five key trends for 2026, including sustained investor appetite and a focus on clinical complexity as a valuation driver, signaling that buyers are ready to move again.

The Owner Vignette: Maria's Decision

Maria owns a 120-patient hospice agency in central Florida. She had been planning to sell in late 2024 but pulled back when her broker told her buyers were "waiting for rates to settle." By December 2025, she was frustrated. Her clinical director was approaching retirement, her CFO had just accepted a role at a competitor, and she was personally exhausted after 18 years of operations.

Then Maria saw the Q4 2025 M&A data showing the 83% surge in deal volume. She reached out to Senate Healthcare directly, skipping the broker route. Within three weeks, we had completed preliminary diligence, confirmed her adjusted EBITDA of $950K, and presented a letter of intent at 4.8x EBITDA, or $4.56M. The deal closed in 47 days.

Maria's timing was perfect. Had she waited until Q3 2026, she would have faced more seller competition as other owners saw the same market signals. By moving in Q1, she captured the "golden window" before inventory normalized.

Why Waiting for 2027 Is a Risky Bet

Here's the uncomfortable truth: the strongest selling moments often happen right before the market feels "normal" again. Right now, in early 2026, buyer demand is strong, seller inventory is still limited, and pricing remains supported by scarcity. But that won't last.

Real estate analysts studying the 2026 market have noted that once sellers sense competition rising, the advantage shifts. The same dynamic applies to agency M&A. As more owners recognize the favorable conditions and bring their agencies to market, buyers will have more options to choose from. More options mean more leverage for buyers and tighter pricing for sellers.

Additionally, regulatory risk never fully disappears. While CMS has delivered clarity for 2026, there's no guarantee that 2027 won't bring new proposed cuts, utilization audits, or compliance scrutiny. If you're considering an exit within the next 18 to 24 months, moving now locks in today's valuation environment instead of gambling on tomorrow's unknowns.

Valuation math for waiting:
Assume your agency generates $800K in adjusted EBITDA today and could sell at 4.5x, or $3.6M. If you wait until Q3 2026 and seller inventory increases, the multiple might compress to 4.0x due to competitive pressure, reducing your exit value to $3.2M. That's a $400K difference, and it doesn't account for potential personal burnout, key employee departures, or new regulatory headwinds.

What Makes an Agency Attractive to Buyers Like Senate Healthcare Right Now

We're actively evaluating acquisitions, and the agencies that stand out share a few characteristics:

Clinical quality: Strong CAHPS scores, low deficiency rates, and documented clinical protocols that reduce compliance risk. Buyers underwrite agencies that can pass a rigorous audit, not just agencies with high revenue.

Payer diversification: Agencies with a balanced payer mix (Medicare, Medicare Advantage, Medicaid, and private pay) are less vulnerable to single-payer rate cuts and perform better in value-based care contracts.

Stable leadership: Agencies where the owner has built a management team that can continue post-acquisition. If you're the only person who can run the agency, that creates key-person risk and reduces valuation.

Clean financials: Adjusted EBITDA that's defensible, backed by documented owner addbacks. We can't underwrite "trust me" EBITDA claims.

Geographic fit: Agencies in markets where Senate Healthcare sees long-term growth potential, including underserved rural areas and metro submarkets with aging populations.

That said, we work with agencies even if they aren't perfectly positioned today. If you have strong clinical operations but weak back-office systems, or if you've been deferring capital investments, we can help. The key is that the clinical foundation is solid. Everything else can be improved post-acquisition.

So What Should You Do Now?

If you're an owner considering a sale or partnership in the next 12 to 24 months, here are the immediate steps:

• Audit your financials. Work with your CPA to prepare a defensible adjusted EBITDA statement. Document every owner addback with supporting receipts or invoices. Buyers like Senate Healthcare will verify every number during diligence, so clean this up now.

• Review your compliance posture. Pull your most recent state survey, Medicare certification documents, and internal audit results. If there are outstanding deficiencies, address them before engaging with a buyer.

• Assess key-person risk. If you're the only clinical leader, administrator, or financial decision-maker, start delegating now. Buyers value agencies with transferable operations, not agencies dependent on the owner's daily involvement.

• Reach out to Senate Healthcare directly. We acquire home health or hospice agencies and can move quickly. No broker fees, no listing process, and no risk of confidential information leaking to your competitors. You speak directly with our acquisition team from day one.

Plain-Language Glossary

Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, with legitimate owner expenses added back. This is the profit number buyers use to calculate valuation.

EBITDA multiple: The number buyers multiply your adjusted EBITDA by to determine purchase price. For example, 4.5x EBITDA on $1M in profit equals a $4.5M valuation.

Key-person risk: The risk that an agency's performance depends heavily on one individual (usually the owner). High key-person risk reduces valuation.

Payer mix: The breakdown of revenue by payer source (Medicare, Medicare Advantage, Medicaid, private insurance, and private pay). A balanced payer mix reduces risk.

Strategic buyer: A buyer (like Senate Healthcare) that acquires agencies to grow a portfolio and improve operations, as opposed to a financial buyer (like private equity) focused primarily on short-term returns.

Final Thoughts: The Window Won't Stay Open Forever

The combination of interest rate stability and CMS clarity has created a rare alignment in the home health and hospice M&A market. Buyers like Senate Healthcare can underwrite acquisitions with confidence, and that confidence translates into stronger valuations for sellers who move now.

But this window is time-limited. As more owners recognize the favorable conditions and bring their agencies to market, seller competition will increase, and valuation multiples will tighten. If you've been considering an exit, Q1 2026 may be the best opportunity you'll see before the market normalizes again.

Senate Healthcare is actively evaluating acquisitions of home health or hospice agencies that meet our clinical quality and operational standards. We're not brokers. We're the buyer, and we're ready to move. If you'd like to explore a confidential conversation about what your agency might be worth in today's market, reach out to us directly. We can typically provide preliminary feedback within a week and close transactions in 30 to 60 days if the fit is right.

The golden window is open. The question is whether you'll walk through it.

Resources:

• https://www.mertztaggart.com/post/the-fog-is-lifting-why-hospice-m-a-is-racing-back-in-2026

• https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-home-health-prospective-payment-system-final-rule-cms-1828-f

• https://hospicenews.com/2026/01/12/5-hospice-trends-to-watch-in-2026/

• https://healthcareprovidersolutions.com/home-health-final-rule/

• https://senatehealthcare.com/healthcare-partnership-consultation