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🏠 A big, beautiful “game changer”
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Good news (and bad) for housing…

Good afternoon. Remember the 30% rule, which recommends you spend no more than this threshold of your income to buy a house? Sounds nice in theory, but in today’s market, that’s realistic only for Americans earning the median income in three US cities: Pittsburgh, Detroit, and St. Louis.

As for the rest of the country, it’s time to rebrand it as the 45% rule, since that’s the income it actually takes for the median earner to afford the average house. In Los Angeles, it’ll take more than the typical salary, adding up to 105%.

Clearly, much conventional wisdom in real estate is due for an overhaul, and this week’s Playbook explores where those changes are happening. Encourage your friends to sign up, so they can stay in the loop along with you.

—Judy Dutton

WEEKLY HOUSING TRENDS

Average weekly 30-year fixed-rate mortgage data from Freddie Mac as of 7/10/2025; median housing data from Realtor.com as of 7/05/2025 (the most recent available).

  • Mortgage rates rose to 6.72% this week from 6.67% last week for a 30-year fixed-rate home loan, according to Freddie Mac. This is the first worrisome uptick in five weeks, although at this same time last year, the rate was even higher at 6.89%.
  • Listing prices inched up 0.2% year over year, currently hovering at a nationwide median of $440,950.
  • The number of homes for sale shot up by 27% year over year, notching 87 straight weeks upward.
  • Homes lingered on the market five days longer than this week last year, giving buyers around 54 days to shop around.

THE BIG STORY

trump signing big beautiful bill

Samuel Corum/Stringer/Getty Images

Now that President Trump’s massive tax bill has been officially signed into law, real estate investors might wonder what the upshot is for them.

Overall, the law is viewed as a win for real estate, with endorsements from housing industry leaders including the National Association of Home Builders and the National Association of Realtors. Many investors also applauded the bill, calling it a “windfall” and a “game changer.” Here’s what investors stand to gain, and lose, and how they’re preparing.

100% bonus depreciation restored

Trump’s One Big, Beautiful Bill (OBBB) restored 100% bonus depreciation and made it permanent. “This way, real estate investors can break a property into depreciable components—HVAC systems, appliances, land improvements—which can be fully deductible in year one, which saves tens of thousands in taxes upfront,” explains Mark Lee, partner at Absolute Properties.

“The return of 100% bonus depreciation is a game changer,” agrees Stephen Keighery, founder of Home Buyer Louisiana—particularly for house flippers. “This bill creates an opportunity to offset house-flipping income by acquiring and renovating rental properties. It’s accelerating my decision to buy more, and in speaking with other investors, I’m seeing a similar mindset.”

SALT deduction caps increase

The megabill boosts state and local tax (SALT) deduction caps from $10k to $40k, allowing real estate investors to save more on property taxes until 2029. While temporary, this update is a bonanza to investors in high-tax states like New York, New Jersey, California, and Massachusetts.

“Bonus points if you own through an LLC or S corp, since there’s a pass-through entity loophole that lets you sidestep the cap altogether,” says Carla Gericke, an agent with Porcupine Real Estate in New Hampshire. As a result, “We’ll likely see a bump in luxury home and commercial property demand in those high-cost markets. When the tax math improves, so does investor appetite.”

Low-income housing tax credits and breaks expanded

Affordable housing scored a couple of victories. Caps were raised on the Low-Income Housing Tax Credit, which can result in significant savings for investors who build or rehabilitate low-income housing.

“These changes are expected to produce or preserve more than 1 million additional affordable rental homes between 2026 and 2035,” says David Dworkin, president and CEO of the National Housing Conference. States will also be able to set new Qualified Opportunity Zones, offering tax breaks to investors for developing or improving housing in low-income areas.

Deductions on mortgage insurance restored

Another reinstated deduction was for mortgage insurance, which is typically required with down payments below 20%. The last time this fee was deductible in 2021, taxpayers saved an average of $2,364, according to US Mortgage Insurers.

Infrastructure updates

The OBBB is expected to funnel federal funding into infrastructure, which will have a ripple effect through real estate. “The immediate move I’m seeing investors prepare for is zoning and land use adjustments near those funded projects around major transportation corridors,” says Mark Sanchez, a real estate manager at Gator Rated in Florida. “I’m already looking at land parcels within 10 to 20 miles of potential development zones tied to this bill, like the stretch east of Orlando, around the State Road 528 corridor. Some of the parcels are still zoned for agriculture, but they’re right in the path of planned developments. That kind of growth usually draws rezoning interest pretty quickly. Rezoning changes property values fast.”

Higher interest rates

Although the overall picture appears positive for investors, some are bracing for potential downsides, like rising inflation and stubbornly high interest rates.

“I expect this bill, in conjunction with tariffs, to drive inflation up,” says Jason Hull at J&J Cash Home Buyers. “Combine this with the immigration crackdown, and I expect the cost of building new homes to go up over the next few months.” To prepare, he’s pivoting away from flipping to rentals, pointing out, “Rents tend to keep pace with inflation, making them a good inflation hedge.”

“My opinion is that interest rates impact investors more than changes to the tax code,” adds Jonah Hanig, CEO of Rove Travel. “With investment properties, the tax changes present a slight tailwind, but pales in comparison to the benefit investors would see from lower interest rates. Many investors are waiting for rates to come down to refi or make new purchases.”

The Great Wait for lower rates continues…

from The Crew

QUICK HITS

Housing graphic with arrows

Just let Fido and Fluffy in. A Zillow analysis of over 11 million rental listings found that only 57% allow pets. But landlords who welcome animals stand to rack up 9% more views, 12% more saves, and secure renters eight days faster than those who don’t, suggesting that permitting pets pays off. Texas is the most pet-friendly state, where over 75% of rentals in Austin, Dallas, and San Antonio allow cats and dogs to move in.

Sellers are giving up on selling. Realtor.com found that delistings are up by 47% year over year in May, outpacing the 31.5% growth in inventory gains. That’s a clear sign that sellers are getting fed up and throwing in the towel on finding a buyer this summer. As for the home sellers who are staying on the market, 20.7% slashed their prices in June, the highest percentage this month in nine years.

Investors are giving up on lower rates. A survey of single-family residential real estate investors by LendingOne and ResiClub found that 57% believe mortgage rates will remain above 6.5% over the next 12 months—a steep spike from 29% in Q4 2024. Nonetheless, 79% say they’re somewhat or very likely to buy at least one property in the following year. Only 32% say they’re likely to sell at least one property.

Renting has hit a record high. With the number of first-time homebuyers in the US at an abysmally low level, it’s not surprising that the number of rental households has hit a record high of 46 million, according to the Wall Street Journal. Plus, at least 1.2 million may be “trapped renters” who want to buy, but simply can’t afford it. WSJ calls this a “bullish sign for landlords,” paving the way to rising rents.

The most expensive home sale: Redfin found that the priciest home sale in the US exchanged hands this May for $110 million. So what did all that money buy? The Belair, CA, estate clocked in at 35,000 square feet on 2.2 acres, with nine bedrooms, 14 fireplaces, a 5,000-bottle wine cellar, and a ballroom. As for the rest of the top 10, three more are in Southern California, four in coastal Florida, and two in Manhattan. The cheapest went for a mere $31.5 million.

The most football-friendly city for Airbnb: Jacksonville, FL—home of the Jaguars—has been crowned the most football-friendly city in the US for short-term rentals leading up to the upcoming NFL season. Analysis by BiggerPockets, which combines STR performance metrics with ESPN draft grades and roster outlooks, found that Jacksonville hosts stand to rake in an average day rate of $265.99 with an occupancy rate of 58%. Plus, home prices remain relatively affordable and rental revenue is on the rise, making this a winning market for investors looking to score their next touchdown of a sweet deal.

REAL TALK

Real estate wholesaler

James Hawk

After 15 years investing in real estate, James Hawk considers wholesaling a great tool for his company. When homeowners reach out to him requesting an offer, his team analyzes the opportunity and decides on the optimal strategy: flip, hold, or wholesale—where he’ll assign his interest in the property (contract) to another investor for a profit. “I don’t consider myself a ‘wholesaler,’ I’m a real estate investor, and wholesaling is simply one strategy every investor should understand and utilize when the opportunity is presented,” he says. “Wholesaling is often overlooked, but it works for every asset class.” Here’s how it works, plus some advice on putting it into action.

How did you get into wholesaling? “In 2009, I was a department supervisor for a steel fabrication company in Florida. My plan was to become an agent, as I love opportunities that won’t limit growth and earning potential. Then I stumbled upon Michael Jake on YouTube posting content on wholesaling. I watched them all. I was skeptical at first, but after a lot of research, I came to the conclusion it was legitimate. Since leads and opportunities require a significant investment, you need multiple ways to monetize. I’ve closed wholesale transactions for a few thousand dollars to six figures on a single deal.”

How does wholesaling work? “When I started, it was primarily more hit-the-pavement style strategies and direct mail in the form of yellow letters to distressed homeowners. FYI, you will receive many angry phone calls… but it worked! I had already begun building a list of serious cash buyers in the area, so I started going to appointments and making offers to homeowners during the day, since I worked night shifts at the time. I was backed by cash buyers waiting on a good deal, so that helped build my confidence. Today, we don’t do any cold outreach to find sellers, owners reach out to us via marketing channels requesting an offer. We put everything under contract with the intent and ability to buy the property, then we’ll make a decision on exit strategy. Wholesaling is one of the strategies.”

What are the challenges of wholesaling? “I like to summarize the business like this: It’s simple, but not easy. You will run into complex title issues, fraudulent sellers, crazy stories, inherited properties with multiple owners who don’t get along, and so on. There’s never a dull moment, and you meet some interesting people. Last time we checked the numbers for my appointments, I’ve been to 1,700+ houses personally and made offers to buy their properties. The better at solving problems you are, the more money you will make. The best wholesalers are what we call ‘transaction engineers,’ which refers to their ability to buy a property in a variety of ways that eliminate objections with solutions to every problem. This could be offering owner financing, cash offer, and leasebacks. The ones that understand how to make an offer based on that seller’s situation will typically gain the most success.”

What advice do you have for others who want to follow in your footsteps? “Anyone jumping into wholesaling needs to understand you are not selling the property, you’re selling the contract to buy. You need to be very explicit and transparent with any marketing to buyers, or you could be seen as brokering without a license. As for rewards, the barrier of entry is low overall compared to the potential income. Build relationships with a couple of good private money lenders, hard money lenders, and strong cash buyers in your area, then you’re ready to begin making offers to sellers. Doing this the right way can also help many sellers. We’ve had many people cry at closing over the years, being so thankful for helping them and solving their problem.”

Want the whole lowdown on wholesaling? Click here for James’ full story.

LINGO

House graphic

If you’re fed up with the high-maintenance headaches of running short-term rentals, mid-term rentals—where you rent out a property for a minimum of 30 days up to a year—may be a happier medium. MTRs caught on during the pandemic and have remained popular with the rise of remote workers and digital nomads seeking semi-permanent accommodations in vacation-worthy locales. Landlords love ’em too, since they bypass the low returns of long-term renters and the heavy workload of offering short-term stays, making them the “just right” Goldilocks of renting.

“Longer stays are kind of awesome because people don’t need as much from you. They’re OK to go buy their own toilet paper and change the batteries because they’re living there,” explained Zeona McIntyre, who turned her STRs into MTRs by posting her properties on Furnished Finder. She found it to be her “sweet spot,” and authored the book 30-Day Stay to help others follow in her footsteps. Another bonus? Mid-term rentals are typically immune to short-term rental regulations, giving landlords more freedom and flexibility.

But MTRs do have challenges. For one, you’re catering to a completely different audience of traveling professionals rather than tourists. To hedge their bets, landlords can try a hybrid model where they offer their properties for both mid-term and short-term stays; typically, mid-termers swoop in during slow travel seasons. Here’s where you can learn more about mid-term rentals.

QUIZ

Can a hugely popular TV series tack on a premium? Find out by comparing these two properties to see if you can guess which one costs more, then find out the answer below.

Listing #1: 5 bedrooms, 5 bathrooms, 3,777 square feet on 0.13 acres, Savannah, GA

This Victorian beauty was renovated by Shane Fatland and Bryan Schreier, who gained fame after another home they renovated was scouted out and selected for the set of the Netflix hit Stranger Things (the Creel House, where villain Vecna lived in Season 4). The couple even lived there when the show aired and had to endure countless drive-bys from fans playing Kate Bush’s “Running Up That Hill.” That got old pretty quick, which is why they sold the property in 2022 and moved on to this new project. Fun fact: The kitchen in this home is an exact replica of the one in Stranger Things, since they loved the design so much they couldn’t let it go.

home for saleHill Property Media

Listing #2: 4 bedrooms, 5 bathrooms, 4,850 square feet on 0.43 acres in Atlanta

This home is also in Georgia, but couldn’t be more different from Listing #1: Modern rooms with soaring 12-foot ceilings and massive windows let in plenty of light and views of a lush private landscape in the exclusive Atlanta neighborhood of Lavista Park. Outside, cool off in a saltwater infinity pool with three waterfalls; then warm up indoors next to one of three fireplaces.

home for saleJordan Nelson

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ANSWER

Stranger Things fans will be thrilled to learn that Listing #1 is the more affordable house to buy, asking for $2,495,000 versus Listing #2’s slightly higher price of $2,575,000. Who would have guessed that those Upside Down vibes could be a bargain?

         
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