New: 🧠 Market Minds Issue #066

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Buyers Want a Discount, Sellers Are Finally Listening

Sellers Are Losing Their Leverage

For the first time in two years, buyers are seeing price cuts they can actually feel. The typical home is now selling for 2% under asking, marking the biggest discount in nearly two years. That’s a direct function of a growing supply pool: listings jumped 7.9% year-over-year, the largest increase since late last year. Meanwhile, pending sales remain down 8.1% from a year ago. Translation: there’s more inventory, but not enough urgency.

High Prices and High Rates = Buyer Paralysis

Yes, price cuts are happening, but housing affordability is still stuck in the stratosphere. The median monthly payment is sitting at $2,784—up 8.3% year-over-year and just $21 shy of the all-time high. This is why buyers are hesitating. Rates dipped below 7% this week for the first time since December, but that isn’t enough to trigger a frenzy. Some buyers are waiting for further rate drops; others are nervous about the broader economy.

The Market’s Split Personality: Deals vs. Demand

This is a bifurcated market. Some sellers are adjusting, meeting buyers at realistic price points. But in desirable neighborhoods, the serious buyers still in the game are triggering bidding wars—especially for homes and investment properties that pencil out as rentals. That’s the key insight: smart money isn’t leaving the market, it’s shifting toward value.

Your Move: Play the Long Game, Not the Hype Game

The market isn’t crashing, it’s normalizing. If you’re a seller, this means recognizing that the “name your price” days are over. If you’re a buyer, this is the moment to be patient but aggressive—opportunity is knocking, but only for those who know how to negotiate. The next six months will define who thrives in this cycle and who gets left behind.

Millennials and the Housing Squeeze: Why They Feel Trapped

Nearly two-thirds of millennial homeowners (63%) say homeownership costs more than they expected, a stark contrast to just 37% of boomers. It’s a generational wealth gap playing out in real estate, and the consequences are massive.

Overspending and Regret Are the Norm for Young Buyers

A stunning 37% of millennials say they overspent on their homes—more than twice the rate of boomers (15%). The difference isn’t just about perception; it’s about purchasing power. Many millennials bought during a red-hot market, often stretching themselves thin just to get in. Now, nearly 1 in 6 millennials (15%) say they can’t even afford basic maintenance—compared to just 1 in 20 boomers (5%).

Homeownership Isn’t Always a Wealth Generator

The old wisdom says owning a home is a guaranteed path to financial security, but millennials are starting to challenge that belief. 38% of millennial homeowners say homeownership has actually hurt their finances, nearly twice the percentage of boomers who say the same (19%). Between rising property taxes, maintenance costs, and insurance hikes, many young homeowners are watching their disposable income vanish.

Stress, Anxiety, and the Question: Is It Even Worth It?

Millennials aren’t just feeling financial strain—they’re feeling emotional strain. 50% say homeownership causes them stress, and nearly 1 in 5 (19%) believe owning a home has harmed their mental health. That’s more than double the percentage of boomers who feel the same way. And here’s the biggest warning sign: 23% of millennials say they wish they could go back to renting.

The REIT Boom Nobody Saw Coming

For years, the real estate narrative has been dominated by doom and gloom—collapsing office demand, sky-high interest rates, and a housing market in limbo. But while some corners of the industry struggle, REITs have quietly been handing out dividend increases like it’s 2019 again. Nearly half of U.S. REITs raised dividends in 2024. The market may be volatile, but real estate investment trusts are proving why they remain a powerful passive income play.

Retail and Industrial REITs Are Leading the Charge

You’d think the housing crisis would push residential REITs to the top, but the biggest winners were in retail. Nearly 80% of retail REITs boosted dividends last year, showing that strong consumer spending and a resilient retail sector are defying recession fears. Industrial REITs weren’t far behind—77% of them hiked payouts, fueled by continued e-commerce growth and rising demand for warehouse space.

Hotel REITs Are Making a Comeback

After getting crushed during the pandemic, hotel REITs are staging a dramatic comeback. Park Hotels & Resorts increased its dividend by 67%, while RLJ Lodging Trust handed out a 50% boost to shareholders. The travel rebound is real, and investors who bet on hospitality assets are seeing real returns.

Residential REITs Are Holding Their Own

While not as explosive as retail and hospitality, residential REITs had some standout performers. Veris Residential led the pack with a 65% dividend increase, while American Homes 4 Rent posted an 18.2% hike. With housing affordability at crisis levels, demand for rental properties is soaring, keeping these REITs in a strong position.

Why This Matters: The Market Loves Cash Flow

Despite high interest rates and economic uncertainty, REITs with strong assets and management continue to reward investors. Nearly half of the 76 publicly traded REITs in the U.S. increased dividends last year, proving that well-run real estate assets remain one of the best ways to generate passive income.

The takeaway? The right real estate investments are still delivering real returns. While some sectors struggle, others are thriving. The winners in this market will be those who know where to place their bets.

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TL;DR (Too Long; Didn’t Read)

The housing market is shifting as sellers lose leverage, with home prices seeing their biggest discounts in two years due to rising inventory and cautious buyers waiting for lower rates. Millennials, who stretched financially to buy homes in a hot market, now face unexpected costs, with many regretting their purchases and questioning homeownership’s financial benefits. Meanwhile, real estate investment trusts (REITs) are quietly booming, with nearly half raising dividends—particularly in retail, industrial, and hospitality sectors—proving that smart real estate investments still generate strong returns despite market volatility.

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-Market Minds Team