Daily Dose of Real Estate – June 25, 2025
Key Takeaways
• Inventory Surge: Active housing inventory has reached 747,526 listings (up 32% YoY), with median list prices at $449,000 (up 17% YoY) 1
• Record Unsold Inventory: Unsold housing inventory valued at $698 billion in April 2025 marks the highest level since at least 2012 2
• Mortgage Rates: 30-year fixed rates average 6.88% (June 25), with Fannie Mae projecting rates to reach 6.5% by year-end 3
• Fed Stance: Powell testified that while the economy is in a “solid position,” the Fed remains committed to fighting inflation despite criticism from President Trump 4
• Builder Warning: KB Home CEO warns homebuyers risk being “upside down” if they overpay for new construction in current market conditions 5
• CFPB Setback: Senate Parliamentarian ordered removal of CFPB provisions from reconciliation bill, impacting proposed funding structure changes 6
• Multifamily Investment: MG Properties acquired a Southern California community for $144 million, while AEW Capital Management purchased a Phoenix-area build-to-rent property for $66.1 million 7
Residential Real Estate Markets
Overview: The housing market is experiencing a significant shift toward more balanced conditions with inventory rising substantially while prices remain elevated. Builder sentiment reflects caution about potential market corrections.
• Inventory Growth: Active listings have increased to 747,526, representing a 32% year-over-year jump, with homes spending an average of 34 days on market (up 4% YoY) 1
• Persistent Price Growth: The S&P CoreLogic Case-Shiller Index posted a 2.7% annual gain for April 2025, with regional variations showing strongest growth in Northeast and Midwest markets 8
• Regional Variations: New York (7.9%), Chicago (6.0%), and Detroit (5.5%) lead in annual price growth, while Tampa and Dallas were the only metros posting year-over-year declines 8
• Builder Warning: KB Home CEO Jeffrey Mezger cautioned that homebuyers who overpay for new construction in today’s market risk finding themselves “upside down” as the market normalizes, particularly in markets with significant new supply 5
• Sales Slowdown: Existing-home sales declined 0.5% month-over-month to a seasonally adjusted rate of 4 million in April 2025, with a 2.0% year-over-year retreat 2
• Record Inventory Value: Unsold housing inventory was worth $698 billion in April 2025, the highest since at least 2012, indicating a dramatic shift in market dynamics 2
• Forecast Adjustment: Fannie Mae has lowered its forecast for US existing single-family home sales in 2025 to 4.14 million units, down from the previously projected 4.24 million units 9
Mortgage Markets
Overview: Mortgage rates remain elevated near 7%, creating ongoing affordability challenges while regulatory developments could impact future lending conditions and consumer protections.
• Current Rates: The national average 30-year fixed mortgage APR is 6.88% as of June 25, 2025, with the 15-year fixed at 6.08% and 5/1 ARM at 6.04% 3
• Rate Projections: Fannie Mae now forecasts rates to reach 6.5% by the end of 2025 and 6.1% by the end of 2026, up from their previous forecast of 6.1% and 5.8% respectively 9
• Lock Volume Decline: Purchase rate lock volume is down 38% from the same week in 2019 and down 12% year-over-year, with the median purchase rate at 6.625% in week 25, 2025 10
• Affordability Crisis: Single-family affordability has deteriorated to the lowest level in a year, creating significant barriers for potential homebuyers 2
• CFPB Funding Setback: The Senate Parliamentarian ordered the removal of CFPB provisions from the reconciliation bill that would have changed the bureau’s funding structure, potentially impacting consumer protections in mortgage lending 6
• Hispanic Homeownership Growth: The Hispanic homeownership rate climbed to 49.5% in 2023, adding 377,000 owner households—representing 30% of the nation’s total growth and highlighting a significant market opportunity 11
Economic & Political News
Overview: Economic indicators show mixed signals while the Federal Reserve maintains its cautious stance on inflation and interest rates amid political pressure and tariff concerns.
• Powell’s Testimony: Fed Chair Jerome Powell testified that while the economy is in a “solid position,” the Fed must remain vigilant against inflation, stating that “we want to be confident that inflation is moving sustainably toward 2%” before cutting rates further 4
• Inflation Uptick: Inflation rose slightly in May to 2.4% year-over-year (from 2.3% in April), but came in softer than expected despite inflationary pressure from tariffs 12
• Fed Projections: The Fed’s updated Summary of Economic Projections shows a reduced 2025 GDP forecast from 1.7% to 1.4%, a slight increase in unemployment rate forecast from 4.4% to 4.5%, and an increase in core PCE inflation projection from 2.8% to 3.1% 13
• Political Pressure: Powell faced questions about the Fed’s independence amid criticism from President Trump, who has called for faster rate cuts to stimulate economic growth 14
• Tariff Impact: Powell noted that “the effects of tariffs will depend, among other things, on their ultimate level,” acknowledging the uncertainty surrounding the economic impact of the administration’s trade policies 4
• Business Sentiment Decline: J.P. Morgan’s 2025 Business Leaders Outlook shows optimism for the national economy fell from 65% in January to 32% in June, with 25% of respondents now expecting a recession in 2025 (up from 8%) 15
• Consumer Confidence Retreat: Consumer confidence declined in June after a May rebound, with concerns about the economy and labor market amid ongoing uncertainty, especially around tariffs 12
Industry News
Overview: The real estate industry continues to see significant investment activity and technological innovation, with institutional buyers remaining active despite market uncertainties.
• Southern California Acquisition: MG Properties acquired The Citron Apartments in Anaheim for $144 million, demonstrating continued institutional interest in the competitive SoCal multifamily market 7
• Build-to-Rent Investment: AEW Capital Management purchased The Bungalows at San Tan Village, a 159-unit build-to-rent property in Gilbert, Arizona, for $66.1 million, with the property 97% occupied at closing 16
• Transit-Oriented Development: 13th Floor Investments unveiled plans for Link at Boca, a mixed-use development in Boca Raton, Florida, featuring 340 apartments and over 24,000 square feet of retail space 17
• M&A Activity Divergence: Megadeals drove a 25% jump in global M&A deal volume in H1 2025 (reaching $2 trillion), while deal count fell 16% year-on-year to a 20-year low, reflecting caution in the middle market 18
• Safety Technology: The multifamily sector is increasingly adopting AI-driven fire detection systems and automated suppression systems to enhance safety in response to climate-related risks 19
• AI Investment Platform: Agrippa, an AI-powered platform that connects capital seekers and providers in the CRE sector, is gaining traction as a broker-free system that optimizes matches between investors and opportunities 20
• CRE Investment Appeal: Despite market challenges including volatility and fluctuating interest rates, commercial real estate continues to offer strategic advantages through stable cash flow, long-term appreciation potential, and tax benefits 20