Last week brought some positive news for the economy and housing market as we move into the second half of 2025. Here’s a quick breakdown of the latest developments:
1. Strong Job Growth in June
The U.S. job market remained resilient, adding 147,000 jobs in June, beating expectations. The unemployment rate dipped to 4.1%, the lowest since February, though fewer people were actively job hunting. Key job gains came from healthcare, social assistance, and government hiring. Wage growth slowed to 3.7% annually, easing inflation concerns. With a stable job market, the Fed may hold off on rate cuts until September.
2. Housing Sentiment: A Mixed Picture
Fannie Mae’s Home Purchase Sentiment Index (HPSI) dropped slightly in June, but more consumers (28%) believe it’s a good time to buy—the highest level since early 2022. However, concerns about job security (29% worried about layoffs) weighed on confidence.
3. Homeownership Dreams vs. Financial Reality
A new survey by NeighborWorks America/Morning Consult, supported by insights from the California Association of Realtors (C.A.R.), shows 49% of Americans still want to buy a home, but 31% feel it’s out of reach due to:
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Low income (33%)
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High home prices (22%)
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Poor credit (22%)
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Economic uncertainty (22%)
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Down payment struggles (21%)
Many potential buyers are saving aggressively (72%), cutting expenses (53%), or taking extra work (34%) to prepare. Realtors remain the top resource (41%) for homebuying advice, according to C.A.R. research.
4. SALT Deduction Cap Raised to $40,000 – A Win for Homebuyers
President Trump signed the One Big Beautiful Bill Act, which includes a higher SALT deduction cap—now $40,000 for households earning under $500,000. The California Association of Realtors (C.A.R.) played a key role in advocating for this change, working with Rep. Young Kim and the National Association of Realtors (NAR). While the increase expires after five years, it could make homeownership more attractive, especially in high-tax states like California.
5. Construction Spending Still Declining
High interest rates and economic uncertainty continue to slow construction. Spending fell 0.3% in May, marking the 7th straight monthly drop. Single-family projects saw the biggest decline, while multifamily construction stayed flat but was down 10.9% from last year. With material costs still high, a quick rebound seems unlikely.
Bottom Line
The job market is holding strong, and homebuying interest remains high—but affordability challenges persist. The higher SALT deduction, thanks in part to C.A.R.’s advocacy, may help some buyers, but construction slowdowns and financial barriers keep the market competitive.
For more insights and expert analysis on real estate trends, visit the California Association of REALTORS® (C.A.R.) at www.car.org.
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