Jeff Sika, the founder of Circle Squard Investments, discussed the influence of the real estate industry on the American economy and markets.
If you flip through Real estate page Recently – or tried to pull just redfin or zillow – something is clearly clear. Nobody is moving forward and no one has to buy a house.
Recently, I took a look at Zillow in one Florida is the most market in FloridaWhich is the root 30A in the panhandal. While it was almost impossible to see a red dot of something for sale, it now looks like a heat map that is burnt with a B -52 stealth bomber just with red dots of bunker bunts.
You have found houses sitting in the market for weeks-or months-with a decrease in the head-oriented price, while buyers stare at high mortgage rates, stable sales and some places, which they bought thinking that the rules of the house office would last forever.
Jerome Powell, president of the Federal Reserve, testifies before the Senate Committee on banking, housing and urban affairs on Captyol Hill on 25 June 2025. (Kent Nishimura / Getty Image)
Until Fed and Jerome Powell Get their work together, our real estate ecosystem will become a big stagnation.
Good economic data to push Trump’s interest rate is bad news
Why does everyone feel frozen
Do you think the things of spring in summer for life – but will be in summer of 2025? Crickets. The current-house sales of June were only 3.93 million-May to fall by 2.7% and year-on-year to increase water. This is the slowest speed since last September. Meanwhile, barely 627,000 were involved in new home sales, still 6.6%below June 2024. Like everyone, it hits the poses button after watching the latest “Million Dollar Listing” show on Bravo.
Golden handcuffs, frozen dreams and growing inventory
We are seeing an incident called “Golden Handcuffs”. People are not moving forward – not because they love their homes, but because they Can’t take the risk of leavingJobs are cooling, rehabilitation allowances are rare, and many houses hold many equity that they bought at low interest rates years ago and they cannot pivit without renouncing financial stability.
It is a market that is hostage from its past and Unemployment rate 4.3% is not helping the hovering problem. And, to boot, there were many people who had never dreamed of returning to day-to-day office with their mountains or beach migrations, and now the boss has called everyone back to the office for the old 9 to 5.
The ‘The Big Money Show’ panelists take the pulse of the real estate market as prices start getting cold.
Sure, inventory Technically The UP-active listing increased from 24.8% year-on-year in July, which reached a post-pandemic high level. But high inventory has not helped much. This is because strength, not availability, remains a choke point.
Meanwhile, in sun belt markets such as Austin or Miami, the price fall is already running – a decline of about 15–19% since 2022. Yet this does not mean that buyers are flooding. Not when paying more than thousands of in insurance and property costs in the cost of property has become normal.
In fact, the insurance premium of the growing house owners is more than $ 2,656 in 2021, more than $ 3,303 in 2024 and in some parts of the country you cannot even buy insurance at your home, without it it is an astronomical cost.
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Mortgage rates reach their lowest level year
The average 30-year fixed rate mortgage was 6.58% this week, the lowest level since October 2024. This may sound like good news on paper-but back in December, the industry forecast said that 6% rates can unlock 6.2 million houses that are to bear an average price house. Hunt? The rates are not yet, and even if they fall on that benchmark, the issues of strength move deeply.
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Can Jerome Powell come to the rescue?
The short answer is yes.
chairman Donald Trump The Fed Chair is working as a weekly dose of the sentence on Jerome Powell. and well. While hostage rates cannot be tied to the fed and are more closely connected that are affected by the 10 -year treasury yield, affected by a wider range of factors, Powells can increase a series reaction to start a spin cycle of low interest rate environment in America.
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Americans still need to do anything or the number of vendors staying on the market will continue to climb on a monthly basis.
During the recent Congress testimony, Powell said that it was not “clear” that interest rates would have to be reduced. Reduce the cost of housingArguing that a long -term supply deficiency was the source of height prices.
According to an industry expert, the American real estate market is about to see a change in the coming months.
However, the story of inventory is aggressively flipping and the reality is that some people are not moving forward due to job uncertainty and are not ready to get out of their 3% mortgage rate and go to a new house at 6.6%. It is incredibly difficult to step into a large house with those two factors for most home buyers.
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In many countries around the world, now the mortgage rates, including Italy, France, Spain, Ireland and Germany, are sub -4% correct. Many of other countries are between 4% and 5%, while we are hovering close to 6.6%. In addition, the inventory level as July was more than 1,100,000 which takes us back to pre-coved levels.
Its Powell’s time To prevent pontification about reducing interest rates and starting acting. If he does not, the American will eventually be late one day late and more than a dollar.
