July Real Estate Roundup: Summer Market Update

I know the news these days is coming in fast, but I’m here to help you focus on what really matters and keep your clients informed and confident! Let’s look at the current headlines: 

The “Big Beautiful Bill” and Homebuying 

Now that the president’s megabill is law, here are some of the immediate effects on homebuying: 

The return of mortgage insurance deduction. Borrowers can once again permanently deduct mortgage insurance premiums across all programs: Conventional PMI, FHA MIP, VA funding fees, and USDA guarantee fees. Depending on their overall deductions, this could be a tax savings opportunity for some buyers – but be sure to refer them to a tax professional for more in-depth information. 

Permanent mortgage interest deduction cap: Also here to stay is the $750,000 cap, so if you’re in a high-cost market, I can help your buyers plan ahead around this limit. 

No new federal down payment/homebuyer assistance. Bottom line, no assistance will come from the federal government, but you and I can continue connecting your clients with state and local DPA programs. Atlantic Bay has some DPA programs of our own – ask me for details! 

State and Local Tax (SALT) Deduction Cap raised: Homeowners in higher-tax states may get larger deductions now that the SALT deduction cap has been raised from $10,000 to $40,000 until it sunsets in 2029. This can also free up some inventory when those homebuyers use that advantage to “move up.” 

Real estate investor perks: Your investor clients scored big with the bill’s new provisions: 

• The Qualified Business Income (QBI) deduction for 20% of rental income is now permanent, lowering taxes and generating more profit.  

• The real property business interest deduction will remain, protecting investors using products like Debt Service Coverage Ratio loans from losing interest write-offs. (Need some condotel or DSCR materials? I can help!) 

• The like-kind exchange rule also stays, so investors can still defer capital gains when selling and reinvesting in new properties. 

• The gain-on-sale rollover provision is untouched, allowing investors to keep rolling over property sale gains for more tax deferment and capital. 

Once again, it’s good to encourage your clients to speak with a tax pro for more information. 

Will the Fed Cut Rates This Month? 

You’ve probably heard a lot about how President Trump is pushing to lower the Fed’s base rate, but Fed chief Jerome Powell continues to emphasize patience as his team assesses economic effects of Trump’s trade policies. 

But let’s back up, because this is important for your buyers to understand: The “Fed rate” is not a mortgage rate, but the fee banks charge to lend each other money overnight. It can trickle down to mortgages, but typically has no real immediate impact. So just because the Fed rate goes down, it doesn’t mean mortgage rates do, too – they tend to follow 10-Year Treasury yields. Also, Powell has said that cutting rates wouldn’t directly improve housing affordability due to structural challenges—low inventory, high costs, and labor issues. 

A few weeks ago, the thinking was the Fed would actually cut the rate at next meeting July 29-30. But now the jobs market may have turned the tide. 

Strong Employment Numbers 

Employers added 147,000 jobs in June, blowing past expectations by nearly 40,000. This gives the Fed more reason to hold rates steady. Powell has signaled rate cuts could come later this year if inflation softens, but June’s labor strength supports a wait-and-see stance.  

And the labor market's unexpected strength could be a positive sign for home sales long-term. A stronger jobs market generally increases consumer confidence and purchasing power – a much-needed boost to overcome consumers’ economic uncertainty. 

Inventory Update 

Vacations and elevated borrowing costs in general have contributed to a stall in summer buying, but this means homes are spending more time on the market, with regions like the South reaching pre-pandemic levels. And this inventory buildup will be waiting for your clients when they’re ready! 

Also, for several weeks, rates have been hovering around 6.7-6.8%. Even if your clients are waiting and watching, remind them that summer could be their time to buy. Even small improvements in rates can make a meaningful difference in monthly payments and long-term savings. If your clients are on the fence, I’d love to give them a cost-benefit analysis on waiting. 

Medical Debt and Credit Reports 

Earlier this year, there was discussion at the federal level about removing medical debt from credit reports entirely. While some changes were considered, they've been met with legal challenges and delays. For now, medical debt may still appear on credit reports, so it's important to help buyers stay informed. 

That said, there's still good news! Medical debts under $500 no longer appear on credit reports. Additionally, there's growing awareness around how medical debt can unfairly impact otherwise creditworthy clients—so we may see more updates in the future. 

I'll keep you in the loop as things evolve. In the meantime, if you have any questions or want to talk through how this might affect your clients, I'm always just a call or message away. 

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.