Trump Tariffs Could Lock in High Mortgage Rates 'for Some Time

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News Flash

Fed's Interest Rate Stance: Your Mortgage Just Got Complicated

Federal Reserve Governor Adriana Kugler delivered a reality check on July 17th. Her message? Don't expect interest rate cuts "for some time."

Why the hawkish position? The Trump administration's tariffs might drive up consumer prices, requiring tighter monetary policy to keep inflation in check.

What this means for you and your clients: mortgage costs will likely remain elevated, further straining housing affordability—especially for first-time buyers.

The Fed's increased attention to housing stability signals their recognition that the housing market is fundamental to broader economic health.

Between rising home prices, limited supply, and those stubborn mortgage rates, households are feeling the squeeze—potentially dampening consumer spending and economic growth across the board.

The bottom line: Keep your eyes on the Fed's inflation assessment. It will directly shape the financial landscape for everyone in our industry.

Buyers Get Some Breathing Room as Inventory Surge Continues

Remember the days of frantic bidding wars and waived inspections? That market is steadily becoming a memory.

The U.S. housing market has maintained over 1 million active listings for nine straight weeks, marking 87 consecutive weeks of year-over-year inventory gains. Active listings have jumped 26.7% compared to last year.

New listings are up 9.3% year-over-year, though that growth pace is stabilizing as summer progresses.

The RE/MAX National Housing Report confirms this trend, showing homes for sale up a substantial 30.1% from June 2024.

What does this mean for your clients? They can actually take a breath before making decisions. Properties are now sitting seven days longer on market compared to last year.

Price-wise, we're seeing welcome moderation. Home price inflation remained muted nationally at just 1.3% year-over-year.

The real story? After years of insanity, we're inching back toward a balanced market. Sellers need to adjust their expectations, and buyers can actually negotiate again.

Regional variations exist—Cleveland (9.0%) and Anchorage (8.5%) still saw significant price jumps—but the overall trend points to stability rather than the wild escalation of recent years.

The question now: Will this trend hold if the Fed keeps rates higher for longer?

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More You Should Know

• Construction Rebounds: Key Sectors Surge: The construction industry is experiencing a significant mid-year rebound, marked by year-over-year spending increases across 12 nonresidential sectors, especially in power, airports, and data centers driven by AI demand. [Source]

• Home Insurance Rates Soar Nationally: Homeowners insurance rates have surged by an average of 21% nationwide, adding $244 annually to typical policies, driven by an increase in severe weather events, rising construction costs, and supply chain disruptions. [Source]

• SFR Market Stays Strong: Despite a moderating housing market and adjusting capital markets, the single-family rental (SFR) sector continues to show resilience in Q2 2025 with robust build-to-rent construction and demand, while rent growth outpaces inflation. [Source]

• CRE Shows Sector-Specific Growth: Commercial real estate professionals are cautiously optimistic for the latter half of 2025, anticipating steady to improved activity driven by strong performance in industrial, data center, and multifamily sectors, while office markets remain split between high-performing and struggling assets. [Source]

• Mortgage Rates Climb Again: Thirty-year fixed mortgage rates climbed to 6.78% as of July 17, marking the second consecutive weekly increase amidst ongoing inflation concerns and a decline in purchase applications. [Source]

• Climate Risk Transforms CRE Investment: Climate risk is increasingly central to commercial real estate investment decisions, driving lenders to demand more environmental reporting and prompting the adoption of sustainable designs and new financing tools like C-PACE and IRA-related loans to mitigate escalating costs and property value impacts from extreme weather. [Source]

• Rental Market Stabilization Underway: The national rental market is stabilizing as the post-pandemic cooling phase concludes, evidenced by flat year-over-year rents and tightening supply following a spring listing surge. [Source]

• Builder Confidence Edges Up: Despite persistent affordability challenges and a record number of price cuts, builder confidence saw a slight uptick in July 2025, partially boosted by the economic momentum from the "One Big Beautiful Bill Act," though the sentiment remains largely negative. [Source]

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