Realty Today

When rates spiked this week and purchase applications fell 7%, something happened that helps the buyers who stayed in the market: the competition thinned. In much of the country, the frenzy conditions of 2021 are gone. Sellers are cutting prices and offering concessions, homes are sitting longer, and buyers can once again ask for protections that were routinely waived a few years ago. Yet buyer psychology has not caught up, and many are still bidding as if it were 2021.

The number underneath every affordability story in America is the housing shortage, and for the first time in years it stopped getting worse. The national housing deficit held at 4.7 million units in 2024, rising by just 43,000 homes, according to a new Zillow analysis of Census data released this morning. That is a sharp change from a deepening of 257,000 homes in 2022 and 159,000 in 2023. The gap did not close.

Yesterday's inflation report looked benign. Today the average mortgage rate hit its highest level in nearly a year, and buyers responded within the week. The average 30-year fixed rate for conforming loans rose to 6.65% in the week ending July 10, up from 6.58%, its highest since August 2025, according to the Mortgage Bankers Association's weekly survey released this morning. The seasonally adjusted purchase index fell 7% and dipped below its year-ago pace.

For a growing number of condo and HOA owners, the most frightening piece of mail is not the tax bill. It is a notice from their own association demanding a special assessment of $10,000, $50,000, or more. These are not routine dues. They are one-time charges to cover major repairs or reserve shortfalls that monthly fees cannot handle, and in the hardest-hit buildings they can approach or exceed the value of the unit itself.

If an envelope from your county assessor landed recently and the number inside made you wince, you may have real grounds to appeal, and a limited window to do it. Assessment notices are arriving across the country, and many reflect the pandemic home-value surge that assessors are only now catching up to, sometimes years after the market started cooling. In Philadelphia, residential values in the latest citywide reassessment came in 31% higher than the values from more than two years earlier.

Build-to-rent, entire neighborhoods of detached houses built to be rented rather than sold, has become a genuine institutional asset class. A recent Phoenix transaction shows it. Cavan Companies sold The Bungalows on Camelback, a 334-unit build-to-rent community on more than 29 acres, for a reported $112.5 million, roughly $337,000 per unit, to an affiliate of Golden Horizon Enterprises. The scan describes it as the largest single-asset build-to-rent trade in the metro's history.

If you rent, the most consequential event in your housing life may be one you have no vote in: the day your building is sold. Last week, the apartment REIT UDR sold Legacy Hill, a 206-unit community in Nashville, after 31 years of ownership. Covenant Capital Group paid $41.5 million, financed with a $29.4 million Freddie Mac loan arranged by Walker & Dunlop, according to Multi-Housing News, citing Yardi Matrix data. The property, at 501 Shadowood Drive, was built in 1977.

There is a simple reason apartment buildings keep changing hands while office towers cannot find a buyer, and it is not that apartments are better real estate. It is that the federal government stands behind apartment debt and does not stand behind office debt. For 2026, the Federal Housing Finance Agency set the multifamily loan purchase caps for Fannie Mae and Freddie Mac at $88 billion each, a combined $176 billion, up 20.5% from the $73 billion-per-enterprise level in 2025.

America is turning its empty offices into apartments at a record pace, and the reason is not urban vision. It is debt. There are now 90,300 apartments in the U.S. office-to-residential conversion pipeline, according to RentCafe's 2026 report, built on Yardi Matrix data. That is up 28% from 70,600 a year earlier and nearly four times the 2022 total.

An office loan is not like a home mortgage. It does not amortize to zero over thirty years. It runs for five or ten years, pays interest, and then the entire principal comes due at once in a balloon payment the owner is expected to refinance. For a decade, that worked, because there was always a new loan available. Right now, for a large share of office buildings, there is not.