June Real Estate Roundup: Market Update and Helping Young Homebuyers

June is National Homeownership Month and a popular wedding month, too. So this month, let’s look at what younger buyers are seeking and how, together, we can guide them home! 

First, let’s take a quick look at the current markets. 

Market Update 

As you know, the markets still continue to be a little rough, but I’m here to help! 30-year fixed rates are just under 7% amid ongoing headlines around tariffs, tax bill talks, and inflation fears. U.S. credit was also recently downgraded by Moody’s, which can make investors uneasy. Economic experts don’t foresee a rate cut at the Federal Reserve’s meeting later this month, and they expect just two small cuts by the end of the year - down from earlier expectations of four. 

All of this affects interest rates and 10-year Treasury yields. Mortgage rates generally move in the same direction as 10-year Treasury yields, but they're also influenced by economic conditions, inflation expectations, and the Fed’s policy stance. When the 10-year yield rises, mortgage rates typically increase as well to make up for expected inflation and risk. Conversely, when the 10-year yield falls, mortgage rates tend to drop. 

But there’s good news. New construction is on the rise, filling the gaps existing homes don’t currently meet – and maybe for less cost than your buyers might expect. I also have options for renovation loans. Around 70% of younger renters are skipping the starter home in favor of a larger property, including fixer-uppers. Markets rise and fall, but rates are just one part of a loan. I’d love to talk to your clients about solutions! 

How to Make Young Homebuyers Your Next Clients 

Many young home shoppers face an uphill climb right now, with higher home prices, lower inventory, and student loan debt. But we can help them and win their business by being trusted guides. Younger buyers value working with industry professionals like us who can walk them through market conditions, financing options, the overall buying process, and using real estate in their long-term financial planning. 

Millennials and Gen Z – the generations now really entering homebuying age and ability – are reshaping the landscape with preferences and priorities. They’re practical, informed, and purpose-driven in their home purchases and may have younger children and tech/gig jobs instead of traditional employment (Ask me about bank statement loans and other products for clients whose employment is “outside the box.”). 

Some features important to these younger buyers: 

• Move-in ready, low-maintenance homes  

• Green features, smart home tech, and energy efficiency 

• Multiple bedrooms and bathrooms 

• Space for remote work, or access to major thoroughfares 

• Good school districts and safe neighborhoods 

• Walkability and access to urban amenities 

• Outdoor spaces like patios and kitchens 

And let’s not forget Gen X buyers. They’re a little older (between 45 and 60) and more financially established but also have college-age kids and retirement to consider as they buy a home. Or they might be downsizing after life events like divorce or loss of a loved one. 

Gen X looks for homes that balance functionality, investment value, and comfort, and account for both current family needs and future lifestyle changes. They tend to view homebuying as a financial investment and often look for homes with strong resale value. They may also consider rental income potential or multigenerational living spaces and aging-in-place features for older relatives and eventually themselves. (Think first-floor primary suites, fewer stairs, and low-maintenance yards). 

Now let’s back up a bit to when many young homebuyers first start shopping – their weddings… 

Helping Newlyweds Buy Their First Home 

Trends show that nowadays, nearly half of newly married homebuyers who are making a down payment are asking for financial help toward the home at their weddings versus traditional gifts. Gift funds can help the young homebuyers get a strong start and offer tax benefits, too! 

All the standard loan programs - Conventional, VA, FHA, and USDA - allow for some or all of the borrower’s needed funds to come from a gift. Depending on the loan program, family, friends, and in some cases employers and non-profits can gift funds. Even jumbo loans allow gift funds; they just may require some borrower contribution as well. 

Gift funds require a “gift letter,” stating the funds are a gift, not a loan. I’m happy to help with this! The donor and recipient will also need to provide a paper trail, like bank statements and cancelled checks, showing the funds came from an acceptable source. 

Also keep in mind that cash gifts should be deposited and sourced at least 60 days before the mortgage application to simplify verification, as they can be considered “seasoned” funds. 

Now, let’s talk tax benefits (and encourage your clients to speak with their tax professional, too). In 2025, an individual can gift another individual up to $19,000 with no need to report it to the IRS. There’s no limit on how much a donor can give to a recipient, but they will need to file an IRS gift tax form if the amount exceeds $19,000. But most people won’t feel any impact because the current federal lifetime estate and gift tax exemption is $13.99 million per individual, or $27.98 million for married couples. (Again, I recommend speaking to a tax pro for more information). 

Even better is that your client’s loved ones can give gift funds to multiple individuals. So, a parent can gift $19,000 to the bride and $19,000 to the groom for $38,000 total, tax-free, no forms needed. And if both parents gift funds individually, the amount doubles to $76,000. 

The recipients don’t pay tax either because the gifts aren’t considered income. The donor’s gift can reduce the size of their own taxable estate and start new homeowners out on the right foot. 

Here are a few final tips… 

• Keep a detailed record of all gifts given/received. 

• Avoid depositing large amounts of untraceable cash. 

• Talk to me early to understand specific documentation needs. 

• Gift funds can be used for a primary residence or second home, not investment properties. 

• Urge clients and their loved ones to speak to a tax professional for additional information. 

I hope your summer is off to great start. Call me with any questions! 

Information is for educational purposes only and should not be relied upon by you. This information is not intended to replace the advice of a tax professional. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlsconsumeraccess.org) is an Equal Opportunity Lender. Located at 600 Lynnhaven Parkway Suite 100 Virginia Beach, VA 23452.