👋👋 Good morning real estate watchers! Today, we will discuss Trump's new tax bill, which is expected to add $3 trillion to the national debt. That’s not a tax cut, that’s a financial piñata filled with IOUs and regret. It’s like refinancing your house to buy fireworks, then setting them off inside the home.
But first, here’s what we’ve been paying attention to this week…
1️⃣ Construction Constipation: Construction delays are showing signs of easing, with only 43% of respondents reporting delays (down from 58% in March), and the Southeast continuing to be the most problematic region with 35% of respondents experiencing significant challenges. (NMHC)
2️⃣ Real Estate Thunderdome: Zillow is cracking down on "hidden" home listings by banning properties that aren't shared in local databases within one business day, sparking a heated industry battle primarily with Compass, the largest real estate brokerage in the US, over how properties are marketed and accessed online. (BI)
3️⃣ Rate Cut Roulette: The Federal Reserve is showing mixed signals about potential interest rate cuts in 2025, with some members like Raphael Bostic and Neel Kashkari suggesting one or two cuts might occur, while others like Christopher Waller and Michelle Bowman are pushing for immediate action in July to prevent a potential job market slowdown. (REN)
4️⃣ Apartment Apocalypse: The U.S. apartment market is experiencing a dramatic supply crunch, with only 209,000 new market-rate units started in the first quarter of 2025 - dramatically lower than the past decade's annual average of 307,300 units and far below the peak of 587,000 units in 2022. (RealPage)
5️⃣ Listing Lunacy: The NAR is facing another antitrust lawsuit, this time from reality TV star Mauricio Umansky, who claims the organization's Multiple Listing Service (MLS) policies are anti-competitive and designed to control access to real estate listings, following their previous $418 million settlement over allegations of commission fixing. (NYT)
TOP STORY
$3.3B DAILY

Back in 1987, then-real estate mogul Donald Trump told The New York Times, “I’ve borrowed knowing that you can pay back with future dollars that are worth less.” Nearly four decades later, President Trump appears to be applying that same logic, this time to the entire U.S. economy.
Last weekend, under the ornate Senate chamber’s chandeliers and just in time for his July 4th deadline, Senate Republicans narrowly pushed forward Trump’s self-styled “Big Beautiful Bill.” It’s a sweeping tax cut package paired with social spending reductions and increased enforcement spending.
One thing it doesn’t cut? The national debt.
According to the nonpartisan Congressional Budget Office (CBO), the bill is expected to increase the federal debt by an estimated $3.3 trillion over the next decade. If provisions like the extended Trump-era tax cuts are made permanent, the cost rises to $4.5 trillion, sending the debt to 128% of GDP by 2034—a figure not seen outside of global crisis conditions.
As political fireworks erupt in Washington, a much quieter crisis is simmering, one that real estate professionals, mortgage lenders, and homeowners alike should closely monitor: the impact of soaring U.S. debt on interest rates and housing affordability.
Interest on Interest
The U.S. government is now spending $882 billion annually on interest payments alone, more than its defense budget. That’s about $3.3 billion every day just to service the debt, or, as it turns out, 20 cents of every tax dollar collected.
To make matters worse, this isn’t debt used to fund new infrastructure or boost productivity. Much of it is used to pay for legacy tax cuts and politically motivated social spending slashes that do little to drive long-term growth.
“Governments aren’t like households,” noted Dr. Luke Hartigan, writing for The Conversation. “They can roll over debt indefinitely.” True, but only up to a point. That point, we may be rapidly approaching.
What This Means for Real Estate
Mortgage rates and real estate markets don’t operate in a vacuum. They're tethered to the yield on U.S. Treasuries. And as federal borrowing surges, so does the supply of government bonds flooding the market. When supply outpaces demand, yields rise. When yields rise, so do mortgage rates.
While Treasury auctions have yet to show systemic cracks, bid-to-cover ratios remain stable, storm clouds are gathering. The U.S. needs to refinance $9 trillion in debt over the next 12 months. With inflation pressures from tariffs, energy costs, and a sliding dollar, it’s a recipe for higher long-term interest rates.
That spells trouble for the housing market, where 30-year fixed mortgage rates are already hovering near 7%, pricing out many first-time buyers and cooling demand across formerly hot markets.
A Wobbling Safe Haven
For decades, U.S. Treasuries have been the global financial system’s North Star. But that star may be dimming. The “revenge tax” provision in Section 899 of the bill increases taxes on foreign investors, potentially eroding international appetite for U.S. debt.
As Greg Combet, chair of Australia’s Future Fund, warned in a recent address, "U.S. assets may no longer be the safe haven they once were."
If foreign demand dries up, the U.S. will need to rely more on domestic buyers or the Federal Reserve. The latter scenario risks pushing America into what economists call “fiscal dominance,” where the central bank is compelled to keep rates low to help the government finance its debt, even if it means stoking inflation.
Trump has already pressured Fed Chair Jerome Powell to slash rates. History provides cautionary tales: Germany in the 1920s, Argentina in the 2000s, and Turkey more recently. When central banks lose independence, inflation often follows. And when inflation rises, so do mortgage rates.
Big, Bold, and Built on Sand?
Supporters of the bill argue that the tax cuts will spur economic growth and, over time, pay for themselves, echoing the familiar “trickle-down” refrain. But even conservative economists are skeptical, especially with growth prospects clouded by trade wars, tariff hikes, and geopolitical uncertainty.
“This is magic math,” Democrats argue, pointing to GOP baseline assumptions that effectively pretend the tax cuts have already been extended, wiping their cost from the official ledger.
Meanwhile, the CBO estimates that 11.8 million more Americans will be uninsured by 2034, a byproduct of the bill’s social program cuts. It’s a stark reminder that fiscal policy isn’t just about numbers — it’s about people.
The Bottom Line
Real estate investors, developers, and homeowners should take a keen interest in the trajectory of U.S. debt. It’s not just an abstract economic debate. It’s a direct input into the cost of capital, mortgage rates, inflation expectations, and asset valuations.
The Trump administration may have succeeded in passing a crowd-pleasing tax cut, but at what cost? In real estate terms, it’s like refinancing your mortgage to fund a backyard pool, with an adjustable rate and a balloon payment looming.
The U.S. debt pile may not collapse tomorrow. But if we keep building it taller, without reinforcing the foundation, someday (maybe soon) the ground will shift. And the housing market, already on shaky footing, might be the first to feel it.