U.S. Housing Market Update: Tariffs, Affordability Pressure & REIT Momentum

Good morning, Dwellers! Welcome to another edition of Dwellings Digest, a realtor and investor driven newsletter simplifying real estate, exploring the economy-stock-real estate link, adding a fun twist with niche topics and more. Enjoy!

In today’s edition - Tariffs, Rising Costs, and Stubborn Rates Create Perfect Storm

1. Construction Costs Surge

2. Sellers Are Delisting, Not Discounting

3. Affordability Crisis Deepens

4. Recession Red Flags from Real Estate

5. New Jersey Real Estate in Transition

Quote of the day - Real estate is the heartbeat of communities, connecting people to places.

If you missed yesterday’s newsletter, click here

Mortgage & Stocks

New? Join our newsletter – no cost!

🎢 Impact on Real Estate

Builders Under Pressure from Rising Costs & Tariffs Source: Reuters

• Material costs rose 10% in some markets due to anticipated tariffs.

• Spring selling season was one of the weakest since 2019.

• Homeowners are remodeling instead of buying new, further reducing inventory turnover.

🎙️ RE Spotlight

Sellers Are Delisting, Not Discounting Source: Business Insider

• 47% YoY rise in sellers pulling listings rather than accepting lower prices.

• High equity enables wait-and-hold strategy.

• Potential inventory freeze if rates remain above 6.5%.

Affordability Crisis Deepens for Both Buyers & Renters Source: Manistee News

• Median home price: $441,738, with mortgage payments averaging $2,570/month.

• 22.6M renters are cost-burdened (30%+ income spent on rent).

• Homeownership rate declining, especially among millennials.

Housing Market Sending Recessionary Signals Source: MarketWatch

• Moody’s flags real estate as a potential economic drag in H2 2025.

• Price appreciation is flatlining in multiple metros.

• Miami, Dallas, and Nashville may see 5–7% corrections.

🏰 RE State Zone

New Jersey Real Estate Highlights

Inventory Surges, Giving Buyers Leverage

• 📈 Listings up nearly 20% year-over-year: Central & North Jersey markets report a 19.3% surge in available homes in June New Jersey Real Estate Network

• Balanced market emerging: With inventory rising and sales cooling, buyers gain more room to negotiate.

• Longer Days-on-Market: Homes are taking slightly longer to sell—good news for price-sensitive buyers.

Home Prices Climb Steadily

• Median home price now ~$582K, up 6.0% YoY in June Redfin

• Bergen & Somerset counties continue hot: North Bergen saw sales soar 83% YoY; Fort Lee up 47% Redfin

• Rapid suburban appreciation: Livingston hit a record $1.28M (+6.3% YoY); Englewood pared back slightly to $820K (~–10%) rightwayrealtygroup.com

Shore Region Holding Strong

• Balanced supply at the shore: Atlantic County sits at 4.0 months of inventory; Cape May at 4.5 months

• Price stability: Cape May median sale price ~$652,500; Atlantic County ~$398,500 Shore Real Estate Search

• Fast sales: Days on market average 32 in Cape May and just 26 in Atlantic County—well below national average

🏕️ Niche-RE

Homebuilder Stocks Lag Broad Market

• S&P Homebuilders index underperformed, down >6% YTD.

• Weak sales and cost outlook weighed on earnings multiples.

• Investors rotating to value and REITs.

Trade Tensions Threaten Profit Margins

• Tariffs on steel, aluminum, copper could increase costs by 3–10%.

• Builders may need to cut margins or raise prices—both risky.

• Tariff volatility causing cautious forward guidance.

Multifamily Stocks Benefit from Construction Slowdown

• New construction is 77% off peak, supporting existing assets' value.

• REITs with stabilized occupancy may see rental leverage.

• Investors eye regions with zoning restrictions and low new supply.

🖼️ Chart-Tastic

And…that's a wrap on this edition!

Got questions or feedback? write to us [email protected] - we'd love to hear from you.