New: 🧠 Market Minds Issue #109

We appreciate each and every one of you for taking the time to read Market Minds. Buckle up and enjoy the free value, and you won’t want to miss… why housing data just became Washington’s favorite asset.

You’re not watching an AI debate. You’re watching a land grab.

The White House just dropped an executive order declaring AI a federal matter, not a state one and told the DOJ to start swatting down state laws that don’t comply. On the surface, it’s about efficiency. Underneath, it’s about who controls the most valuable asset in housing: data, judgment, and blame when things go wrong.

Here’s what actually matters to you.

A single national framework sounds clean. Fifty states arguing over disclosures, bias tests, and “high-risk” classifications is messy. Washington wants fewer speed bumps so capital and code can move faster.

But faster markets don’t always mean better markets. State AI rules were emerging precisely because housing is where algorithms can quietly do the most damage, pricing nudges, tenant screening, rent optimization. The RealPage lawsuit made that painfully clear. The federal government isn’t erasing that risk; it’s centralizing the authority to define it.

This is ai in real estate news today in its purest form: fewer guardrails, more velocity, and a lot of faith that markets will self-correct before trust erodes.

AI doesn’t hallucinate value out of thin air. It feeds on MLS data, standardized, historical, and obsessively local. That’s why this fight isn’t abstract. It’s contractual.

MLS licenses determine who can use what, where, and how. When that data trains models that influence pricing, negotiations, or marketing copy, compliance risk doesn’t disappear just because the tool has a slick interface. Responsibility still attaches to the humans and institutions closest to the source of truth.

The quiet power shift here isn’t regulation vs. innovation. It’s who gets to define accuracy when the algorithm spits out a confident answer that feels right until it isn’t.

Third-party tools are multiplying. Lead scoring, pricing guidance, negotiation insights, instant copy. The pitch is seductive: faster decisions, fewer mistakes.

But software doesn’t carry fiduciary duty. People do.

When something breaks bias claims, pricing distortions, compliance failures, the algorithm won’t be in the deposition chair. Transparency about where insights come from and how they’re validated isn’t a nice-to-have anymore. It’s reputational insurance.

This is the uncomfortable truth about how ai is changing real estate in the USA: judgment is becoming more valuable, not less, precisely because machines speak with such unearned confidence.

The least flashy takeaway is the most important. Standardized data beats clever models. Always has.

AI systems trained on clean, interoperable datasets produce fewer distortions and expose bad actors faster. Markets eventually punish tools that get it wrong but only after real people absorb the damage. The industry’s north stars haven’t changed: transparency, accuracy, and comprehensive data.

AI just accelerates the consequences of ignoring them.

Federal control isn’t inherently good or bad. It’s a wager. That innovation plus market discipline will outperform fragmented local protections.

Maybe it works. Maybe it doesn’t.

What’s certain is that ai in real estate industry is no longer a side experiment. It’s infrastructure. And infrastructure failures don’t announce themselves politely, they surface during the next cycle, when trust is already thin and margins are under pressure.

Pay attention not to what the models promise, but to who owns the data, who explains the outputs, and who eats the risk when the math meets reality. That’s where the real edge is now.

You can feel it if you’re paying attention. Not panic. Not collapse. Hesitation. The housing market didn’t fall down the stairs in December, it paused on the landing, checked its phone, and wondered if it should keep going.

Pending home sales are down nearly 6% year over year, the sharpest pullback in almost a year, and the retreat is broad-based, ugly in the places that used to feel invincible, and telling in the ones that aren’t. This isn’t noise. It’s a message.

The story starts, as all real estate stories eventually do, with monthly payments. Mortgage rates hovering north of 6% have turned once-manageable homes into psychological hurdles. Prices haven’t cracked meaningfully, but time has homes now sit longer, negotiations take longer, and buyers behave like people spending their own money again.

This is not a crash. It’s a pending home sales decline driven by math, not fear. When the payment feels wrong, even confident households wait. And waiting is contagious.

Here’s the more interesting development: sellers are backing away too. New listings are down more than 3%, the steepest pullback in over two years, and total inventory growth has slowed to a crawl. Translation: fewer buyers, fewer sellers, and a market that’s technically balanced but emotionally gridlocked.

This is what happens when everyone believes they’re early. Buyers think prices might soften. Sellers think demand might come back. So nothing happens, except time passes, and leverage quietly shifts.

The biggest drops in activity are concentrated in markets that priced perfection into the future. San Jose, Oakland, Houston, places where affordability was already stretched and confidence did most of the heavy lifting. When sentiment weakens, it shows up first where belief mattered most.

Meanwhile, a handful of metros are still growing, but even there the energy feels thinner. The december pending home sales drop didn’t discriminate by region so much as by fragility.

Days on market are up. The share of homes selling above list is down. Concessions are back in the conversation. None of this screams distress. It whispers realism.

The key signal isn’t volume,  it’s behavior. Buyers are choosier. Sellers are tentative. Everyone wants clarity, and the economy isn’t offering it yet. Add lingering job anxiety, election-cycle memory effects, and a market that surged last year off relief rather than fundamentals, and you get exactly this outcome: US pending home sales drop as buyers struggle with affordability.

Markets don’t turn when headlines say they should. They turn when expectations quietly reset. This winter feels less like an ending and more like a long inhale before something gives rates, prices, or psychology.

The mistake would be assuming nothing is happening. The smarter move is recognizing that something already has.

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Let’s be clear: the real estate market is no longer about location, location, location. It’s about affordability, affordability, affordability. Zillow’s latest data doesn’t just reflect buyer preferences, it shoves them in your face. When most of the most popular housing markets in 2025 clock in with home values under $350,000, you’re not looking at a coincidence. You’re staring at a reckoning. Buyers aren’t just sidestepping sticker shock, they’re revolting against it.

Rockford. Toledo. South Bend. These aren’t cities that typically make coastal investors foam at the mouth. But they’re outperforming, and fast. Why? Because they sit at the epicenter of a new demand curve, one where the tension between price and paycheck finally snaps. These are the cities that occupy the intersection of livability and sanity. Welcome to the most affordable housing markets that don’t feel like compromise.

It’s not just about clicks, it’s about contracts. In Rockford, homes go pending in five days. That’s not browsing. That’s a market behaving like it’s back in the 2021 frenzy, just at 60% of the cost. Zillow’s methodology, which includes page views, home value growth, and contract velocity,  filters out the fluff. Curiosity doesn’t make this list. Commitment does.

Let’s talk tactics. The markets topping the list, from Albany to Abilene, share three traits: job access, walkability, and home prices that don’t require generational wealth. Buyers are making smarter plays, recalibrating around metrics that actually matter. The housing markets ranked by affordability are where the buyers are going and staying.

Relocation interest is real. In markets like Rockford, over 60% of listing views come from outside the metro. We’re not just watching urban flight anymore; we’re tracking talent migration. Remote work didn’t kill the city, it just changed the coordinates. As lifestyle and livelihood decouple from zip code, secondary markets become primary opportunities.

In 2025, value is not just about price per square foot. It’s about where your dollar feels less like a hand grenade. In cities like Toledo and Springfield, you're seeing buyers not just invest in property, but defect from a system that stopped making sense. The most popular housing markets list isn’t a list, it’s a signal. And if you’re still tethered to conventional coastal thinking, you’re not just behind. You’re betting against gravity.

Zillow didn’t ask anyone how they feel about these markets. It tracked what they do. That’s what makes this list radioactive for anyone paying attention. These aren’t “hot” markets, they’re functional ones. And in a dysfunctional economy, that’s where capital flows. Follow the homes that go pending fast. That’s the real momentum play going into 2026.

This Henderson, NV penthouse at Four Seasons Private Residences is listed at $35,000,000 after a casual $3M price increase, despite being under construction and not expected to be completed until 2027. A brand-new, fully serviced, ultra-luxury condo with Strip views, $9K+ HOA fees… and somehow already feels like it’s been sitting on the shelf a little too long.

Check it out👇

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Power isn’t banning the tool, it’s owning the rules.

The White House declared AI a federal matter, signaled DOJ enforcement against noncompliant state laws, and centralized authority over how housing algorithms are governed.

Strategically, that move trades local friction for national velocity, consolidating control over data, judgment, and accountability before states could harden their own guardrails.

Control the framework, and you control the fallout.

Real estate in 2025 is undergoing a triple shift: AI is grabbing power at the federal level, turning data into destiny and algorithms into gatekeepers; the housing market isn’t crashing, it’s holding its breath, paralyzed by affordability gridlock; and the Midwest just became the market’s main character, as buyers revolt against coastal pricing and chase sanity over square footage. It’s no longer about location, it’s about leverage, liquidity, and latency. Pay attention to who owns the data, who’s holding back listings, and where homes go pending in five days. That’s where the action is.

Have a great weekend - we’ll see you next Saturday.

Cheers 🍻

-Market Minds Team

The content of Market Minds is provided for informational purposes only and reflects personal opinions based on sources believed to be reliable. It does not constitute financial, investment, legal, or professional advice. Each reader is solely responsible for their own decisions.