Washington just passed a massive law to fix the national housing shortage. The goal is to rein in Wall Street landlords and build more homes. Back in the real world, though, buyers are sweating through a brutal summer market. Record-high prices and stubborn mortgage rates have brought sales to a crawl.
Washington's long game meets a summer freeze
The 21st Century Road to Housing Act quietly became law this past weekend. President Trump skipped the signing ceremony and called the bill a "big yawn" online. But it actually changes a lot. The rule getting all the attention prohibits any investor that owns more than 350 single-family homes from buying any more. The law also packs in dozens of proposals to cut red tape, according to CNN.
That's great news for future buyers tired of competing against all-cash corporate offers. Sweeping federal changes take years to trickle down to your neighborhood, however. Right now, buyers are staring down the highest mortgage rates we've seen in nearly a year. And home prices just hit an all-time peak.
Buyers stay home, builders start sweating
Unsurprisingly, people are hitting pause. Pending home sales took a steep dive across most of the country in June, according to Realtor.com. When borrowing costs spike right as sticker prices peak, the monthly math simply stops working for the average family.
You can see the strain clearest in new construction. Homebuilders are feeling their lowest confidence in over a year. To get foot traffic back, they're quietly piling on the perks. HousingWire reports that 37% of builders are actively cutting their asking prices this month. A solid majority are also throwing in sales incentives—think rate buydowns or free upgrades—just to get buyers off the fence.
What's happening in your state
Real estate is always local, and a few areas are bucking the national freeze. If you live in Virginia, you might be seeing a totally different market. Contract signings in Virginia Beach actually surged 15.4% annually this summer. Meanwhile, buyers in the Midwest felt the chill the most. Regional contract signings there took a heavy hit month-over-month.
The bottom line
- If you're house hunting, new construction might be your best bet right now. Builders are offering price cuts and incentives to move inventory. You have more leverage than you think when buying a home this summer.
- For current owners thinking of listing, patience is key. Buyers are incredibly rate-sensitive right now. If you're selling your home, you need to price it perfectly for the current market. Ignore the market we had six months ago.
- Keep an eye on those rates. They bumped up recently, but projections suggest they might settle down a bit by year's end. If you locked in a mortgage at the peak, it never hurts to run the math on mortgage refinancing to see if you can shave down that monthly payment.