YOUR Home Sale: TAX-FREE?! Trump's Bold Move & Mortgage Rate SHOCKERS.

Welcome to "the WiRE," episode 032! This week, we're dissecting the most impactful headlines influencing your home and your wallet, focusing on a potentially game-changing tax proposal and the stubborn reality of mortgage rates. The market is buzzing with conflicting signals – record prices against dwindling sales, rising inventory, and new trends like "accidental landlords" that could reshape urban landscapes.Segment 1: The "Tax-Free" Home Sale Debate: Trump's Bold Capital Gains ProposalA significant development on the political front could redefine homeownership. Former President Donald Trump has hinted at or proposed eliminating capital gains tax on home sales.• The Proposal: Trump's plan suggests no capital gains tax on homes sold by individuals, whether it's a primary residence or an investment property. This could apply to all capital gains from home sales, potentially making millions of dollars in profit tax-free for homeowners and investors.• Potential Impact: ◦ For Sellers: This could be a massive financial boon, allowing sellers to keep significantly more of their profits. It might incentivize homeowners who have held onto properties due to large unrealized gains to finally sell. ◦ For the Market: Proponents suggest it could boost housing transactions and liquidity. Some argue it could help with affordability by encouraging more supply to come onto the market.• Skepticism & Counterarguments: ◦ Ineffectiveness on Affordability: Critics argue that removing capital gains tax on home sales might not solve the core housing affordability issues. Redfin's chief economist, Daryl Fairweather, noted it's "not clear" it would help. ◦ Benefit to the Wealthy: There are concerns that such a policy would disproportionately benefit wealthier homeowners with larger profits, rather than first-time buyers or those struggling with affordability. ◦ Market Distortion: Some analyses suggest it could create a "wealth effect," encouraging spending rather than directly addressing the housing supply shortage. ◦ Housing Shortage: Despite a construction boom, the U.S. housing shortage has actually worsened. This proposal might not fundamentally alter the underlying supply-demand imbalance.Segment 2: Mortgage Rate Shockers and the Federal Reserve's StanceMortgage rates remain a critical factor in housing market dynamics, and the Federal Reserve's decisions are under intense scrutiny.• Fed's Steady Hand: The Federal Reserve is likely to hold interest rates steady, despite political pressure from figures like former President Trump, who has pushed for rate cuts. The Fed's stance underscores its independence and focus on inflation targets.• Current Rate Environment: ◦ As of July 25, 2025, 30-year fixed mortgage rates saw a slight increase. ◦ On July 24, 2025, mortgage rates were noted as remaining "static," hovering around the high 6% to low 7% range, with the Fed maintaining higher interest rates. ◦ Weekly mortgage application volume data also reflects the impact of these rates.• Impact on Buyers: Higher, steady interest rates continue to challenge buyer affordability, contributing to a static market where buyers are weighing their options carefully. Mortgage demand remains sensitive to rate fluctuations.• Forecasts: While there's growing optimism for the housing market to improve in 2026, the immediate outlook suggests continued sensitivity to rates. The latest mortgage rate forecasts offer insights into what buyers can expect for the rest of 2025.Segment 3: The Broader Housing Market Picture: Paradoxes and New TrendsBeyond taxes and interest rates, several other trends are shaping the housing landscape in July 2025.• Record Prices vs. Collapsing Sales: ◦ June home sales data revealed a significant paradox: existing home sales dropped as prices hit a record high. Existing home sales retreated to a 9-month low, remaining unchanged year-over-year in June. ◦ New home sales held steady at a "relatively tepid level", with June new home sales below expectations (627k vs. 645k expected). ◦ The median existing home price reached a new all-time high of $419,300 in June 2025.• Inventory Surge & Price Cuts: For-sale signs are multiplying, with housing inventory hitting a 5-year high, and price cuts are surging. This indicates a shift in market dynamics, giving buyers more options and leverage.• Buyer Leverage & Cancellations: As buyers gain more leverage in the market, more are backing out of sales. The rate of home sales cancellations in June 2025 was also significant.• The Rise of "Accidental Landlords": A new, unexpected source of competition for institutional landlords is emerging: homeowners who are becoming "accidental landlords". ◦ This trend is starting to impact rental supply, adding new inventory to the rental market. ◦ It presents new dynamics for both rental prices and the ...