June 30, 2026 – July Celebration

Economic Commentary

We started the month of June in something we described as akin to a June gloom. Oil prices and interest rates were higher and the real estate market had softened.  We also said that June glooms in California are typically replaced by a sunny and hot July.  We asked if our June gloom could be such a precursor.  Well, we think that it is apropos that we move into July celebrating the country’s 250th anniversary.  We can think of no better time to witness a turnaround that could propel the economy upward during the second half of the year.

This country was built upon the premise that people could come to our country attracted by the availability of land. Land which was not accessible in their home countries.  For generations, Americans have built their wealth upon this land. And today, real estate remains the primary builder of wealth for the average American with nearly 70 percent of households owning real estate.  And for the vast majority of these owners, their real estate has become their most important asset, as well as their home. It is interesting to read coverage in the media that ownership has lost its luster in the short run. However, in the long run ownership is always a primary piece of the America dream.

We enter July with pride regarding our 250th anniversary.  But also, with the recognition that interest rates have fallen off their highs as the situation in Iran, while not resolved, has calmed down significantly.  While we are not expecting a 180-type turnaround, we move into the second half of the year hopefully shifting in the right direction. This week we will see the June’s employment numbers. Thus far the second quarter has seen an improvement in terms of the number of jobs added. A decent report would help with regard to building momentum as those who are working are the ones who are more likely to be on the hunt for real estate.  Meanwhile, happy anniversary America!

Weekly Interest Rate Overview

The Markets. Mortgage rates rose slightly in the past week as the situation in Iran was calmer while negotiations progressed.  According to the Freddie Mac weekly survey, 30-year fixed rates rose slightly to 6.49% last week from 6.47% the previous week. In addition, 15-year loans also increased to 5.84%. A year ago, 30-year fixed rates averaged 6.77%, 0.28% higher than today. Attributed to Freddie Mac: “The average 30-year fixed mortgage rate was little changed this week at 6.49%. Rates have remained relatively stable over the last six weeks. Meanwhile, purchase activity eased modestly, and refinance activity has continued to pick up recently, reflecting borrowers’ responsiveness to current rate levels.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

A recent NAHB analysis found that fewer older homeowners are choosing to transition out of their homes or downsize, a trend known as the “silver tsunami.” This shift is limiting the expected wave of housing stock released, affecting the availability of homes for new buyers. A majority (79%) of the members of the Boomer and Silent generation, U.S. adults 65 years or older, are homeowners and currently own more than a third (34%) of owner-occupied housing units in the U.S. “As older Americans stay in their homes longer, the silver tsunami phenomenon won’t solve the housing shortage on its own; therefore, expanding the housing supply becomes more urgent, not less,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “We must create pathways for all generations who aspire to achieve homeownership by reducing barriers to housing attainability.” An NAHB analysis found that the “silver tsunami,” which generally releases housing stock, varies sharply by region. Coastal metros and popular retirement areas have both high shares of older households and a lower number of young adult households. NAHB also found that older homeowners tend to live in some of the most supply-constrained markets.  Another complicating factor of the silver tsunami narrative is the age of the housing stock held by older homeowners. In the top 100 metro areas, markets with larger shares of older homeowners also tend to have older housing stock. These homes are unlikely to be direct substitutes for newer construction, as when they enter the market, many may require significant renovation and, in some cases, redevelopment.  Source: NAMB

If there’s room for agreement on anything in Washington, it’s that lawmakers need to do something to make homeownership more affordable. Last week Congress passed the largest piece of housing legislation in decades. The bill is titled the 21st Century Road to Housing Act. In an interview with NPR, Sen. Elizabeth Warren, a co-sponsor of the bi-partisan bill, said housing affordability has become a priority for Congress. “Every time every member of Congress goes back home they hear how urgent it is to bring down home prices. And that’s what the bill does,” she said. But the main issue this bill tries to address is that the U.S. does not have enough houses to keep up with demand. Realtor.com estimated that last year the U.S. was short by more than 4 million housing units. “Supply is the key problem here,” said Jeanna Kenney, assistant professor of economics, finance and real estate at Villanova University. “Anything you can do to make supply easier is going to be helpful in the long term.” Rather than making a single change, the bill is a hodgepodge of provisions designed to either encourage housing construction or make it easier for home seekers to buy. One part of the package is a ban that prevents corporate investors from buying up more single-family homes to rent out. If one of those groups already owns at least 350 houses, they won’t be able to buy others.  While the legislation doesn’t provide new federal dollars for homebuilding, it streamlines some of the regulations homebuilders must follow in order to get existing federal financing. For example, it allows builders to skip the environmental review when a housing project is going up between two buildings that already went through the process.  Another is aimed at making manufactured homes more affordable by getting rid of the rule that those houses must have a permanent chassis, or a steel frame that makes them moveable. Source: NPR – Note: As of Friday, the President had not signed the bill.

Only 30% of Americans know their neighbors beyond a casual level, according to a new Rocket survey. Despite this, Americans value the importance of strong community, with nearly 80% saying strong neighborhoods improve their quality of life. 50 years ago, neighborhoods were the center of belonging, culture and identity, with 80% of Americans saying they were once places where people naturally connected. Today, that dynamic has dramatically shifted, with hesitation emerging as the most prominent barrier to connection. Four in 10 (41%) say knocking on a neighbor’s door feels too bold, while 22% say they feel awkward making the first move. “We have tools at our fingertips that connect us with anyone on the planet, but we don’t know the person next door,” said Sarah Tarraf, Senior Vice President of Knowledge & Data Insights at Rocket. “At the heart of this paradox is something very basic. People want connection, but they fear being intrusive and being rejected. Americans are ready to be better neighbors. They just want someone to lead the way.” Only 17% of Americans say they intentionally seek out neighborly interactions, yet 68% report receiving support from a neighbor in the past year. The data suggests that while people may not actively pursue connection, they still show up when it matters – 58% say they would turn to a neighbor in an emergency, and 65% feel comfortable offering help. Nearly 42% of Americans say people in their neighborhoods tend to keep to themselves. Part of that shift may be tied to the decline of traditional “third spaces” – neighborhood spots like restaurants, parks and libraries where connection once happened naturally.  Source: MP Daily