Real Estate in Motion: Rising Mortgage Rates, Declining Home Sales, and the Impact of New Policies on the Housing Industry
Cook County Property Tax Reform (January 27, 2025)
Cook County in Chicago is pushing for reforms in property tax assessments to reduce inequities and improve transparency, particularly in the commercial real estate sector. However, property owners and industry experts remain skeptical about the reform’s implementation and outcomes. The changes could significantly affect operating costs for commercial properties. Many are approaching the developments cautiously, awaiting clearer guidelines. This reform aims to address long-standing criticisms of the assessment process.
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Existing Home Sales Drop to Lowest Level Since 1995 (January 27, 2025)
Existing home sales in the U.S. fell in 2024 to their lowest level since 1995, according to Univision. This reflects the impact of high mortgage rates, rising home prices, and a lack of affordable inventory. While some metropolitan markets show signs of resilience, the overall trend points to a slowdown. The drop in activity presents challenges for agents and developers alike. Experts suggest government incentives and tax adjustments to stimulate homebuying.
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Record Apartment Supply (January 27, 2025)
The apartment market recorded its seventh consecutive quarter of record-breaking supply. This significant growth has heightened competition among landlords, prompting aggressive incentives to attract tenants. However, demand has not kept pace, creating pressure to lower rental prices. Analysts warn this oversupply may impact revenue in the short term. Stabilization efforts are expected to focus on cities with high levels of internal migration.
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71% of Real Estate Agents Closed No Deals in 2024 (January 24, 2025)
According to Inman, 71% of U.S. real estate agents did not close a single transaction last year. This is largely attributed to an extremely competitive market, fluctuating mortgage rates, and oversaturation in the industry. The statistic underscores the importance of strategic marketing and specialization to survive in challenging conditions. Only well-prepared agents were able to adapt and succeed in the market. This highlights the need for continuous training and differentiation to thrive.
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Trump’s Executive Order on DEI (January 24, 2025)
Former President Donald Trump issued an executive order limiting Diversity, Equity, and Inclusion (DEI) policies in federal housing agencies such as HUD and FHFA. The move aims to eliminate programs that prioritize diversity in housing projects and mortgage lending. It has sparked controversy, with supporters arguing it restores neutrality and critics claiming it undermines housing equity. The industry remains divided over its long-term effects. Meanwhile, legal experts anticipate challenges to its implementation.
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Current Mortgage Rates (January 24, 2025)
Mortgage rates continue to climb, with 30-year fixed-rate mortgages averaging 6.78% and 15-year fixed-rate mortgages at 6.17%. This reflects a market adjusting to Federal Reserve policies and inflation expectations. Despite uncertainty, some buyers see opportunities in adjustable-rate mortgages with lower initial rates. Experts advise caution and personalized evaluations of financing options. This trend adds further challenges to affordability in an already competitive market.
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Recommended Reading:
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