Nationwide, July 27, 2025 — On this day, Presidents Donald Trump and European Commission President Ursula von der Leyen announced a landmark trade agreement that significantly reshapes transatlantic commerce. The deal establishes a reciprocal 15 percent tariff on roughly 70 percent of European goods entering the United States, a compromise far lower than previously threatened levels, while safeguarding many strategic items including aerospace components, semiconductors, and pharmaceuticals with zero-tariff exemptions. Steel and aluminum will remain subject to a 50 percent tariff, although quota mechanisms may apply. As part of the pact, the EU pledged to purchase up to $750 billion in U.S. energy exports over three years and invest approximately $600 billion in the U.S. economy, including military procurement.
Markets reacted positively. Equity futures and global indices rose as the deal allayed fears of an escalating trade war. Still, analysts noted lingering concerns. While the agreement avoids harsher 30 percent tariffs, it raises costs for U.S. consumers and may strain European growth. Estimated EU GDP impact ranges from a 0.2 to 0.5 percentage point reduction, while U.S. tariff rates on EU imports rise from an average of 1.2 percent to around 17 percent.
The timing of the trade deal has particular relevance for domestic markets. Analysts suggest that by reducing short-term trade-related uncertainty and inflation expectations, the accord could indirectly benefit sectors sensitive to macroeconomic volatility, especially the housing market.
On the same day, housing experts released their July 2025 market update. Mortgage rates remain elevated in the high-6 percent range, just under 7 percent, but home price growth is cooling, and national months’ supply of inventory has climbed to roughly 4.4 months, the highest level since 2019. These shifts are gradually tipping negotiation leverage toward buyers, particularly in regions that were previously seller-dominated.
Industry reports indicate that increased supply and rising rates are dampening competition. Some sellers have begun lowering prices, and expired listings are up, especially when homes lack proper staging, accurate comparables, or digital visibility through platforms like virtual tours.
In local markets, the traditional summer peak in activity is playing out more moderately but steadily. Real estate professionals are emphasizing preparedness. Buyers are encouraged to secure financing in advance, and sellers are urged to price strategically and embrace virtual marketing tools to differentiate in a more competitive environment.
The confluence of factors—a stabilizing trade environment courtesy of the U.S.–EU deal, easing inflation pressure, and growing housing supply—has injected a cautious optimism into the market outlook.
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Economic research offers important context. J.P. Morgan projects modest home price appreciation of around 3 percent for 2025, driven by supply returning toward more normalized levels and mortgage rates lingering in the mid-6 percent range before easing only slightly by year-end. Bankrate forecasts similarly project 30-year fixed rates spending much of the rest of the year between 6 and 7 percent, making affordability pressures a persistent challenge even as inventory builds.
Tariffs remain a mixed signal for real estate. In 2025, broad tariffs on steel, aluminum, and lumber—key inputs for homebuilding—have pushed construction costs upward, slowing new home starts and reinforcing affordability issues in many regions. Yet some analysts suggest that overall economic volatility tends to push capital into safe-haven assets such as property, providing support for residential real estate values, especially among investors.
In practice, these combined forces mean that while affordability remains strained, buyer confidence is slowly improving. Those with clear financing, strong credit, and realistic expectations are finding more leverage, especially as sellers adjust pricing and marketing strategies to the new market dynamics. Digital tools, from virtual tours to online listings, are playing an outsized role in influencing sales outcomes and buyer interest.
Meanwhile, policymakers continue to bolster housing access. In July, the FHFA approved the use of VantageScore 4.0 for Fannie Mae and Freddie Mac lending. This change allows alternative credit histories, such as rental payment records, to qualify borrowers, potentially unlocking homeownership for millions of Americans previously excluded under traditional FICO-only criteria.
In sum, July 27, 2025 marks a turning point for the U.S. housing market narrative. The U.S.–EU trade accord offers macro stability that may ease inflation and trade risk, even as elevated mortgage rates and tariffs keep affordability strained. Rising inventory and growing buyer leverage are signaling a shift toward a more balanced market, with strategic pricing, financing preparedness, and digital marketing becoming essential for sellers. Buyers with strong financial profiles are likely to find opportunities, while policymakers and industry professionals navigate an evolving landscape shaped by economic realignment, regulatory shifts, and global trade outcomes.
