How latest inflation data impacts real estate

Facing some headwinds

Our readers know that our goal with this newsletter is to give you info clear and straight. No sugarcoating!

As you’ll see below, the latest market data shows that we could be facing some headwinds in the market. Rising inflation. Homeowners unwilling to budge. We’ll break it all down below.

But as usual, we want to help you do something about it. In today’s Foundation Plans, we start our deep dive into lead generation. It’s the heart and soul of this business, and we’ll give you our best tips on how to keep your pipeline full.

However, we don’t want to keep it all down and dry. Check out our third story, where we list the biggest recent sales. Those huge numbers show us what’s still possible in our industry!

With that, let’s dig into today’s Blueprint!

- James and David

Rate cut still likely despite rising inflation

Recently, several important economic reports on July numbers indicated that inflation is on the rise. Here’s a summary of key takeaways:

• Consumer prices: The CPI held steady at 2.7% year over year, but core inflation rose to 3.1% from 2.9%, its highest since February. Headline CPI grew 0.2% month-over-month, while core CPI gained 0.3%.

• Producer prices: The PPI jumped 0.9%, far above the 0.2% estimate, marking the largest monthly gain since June 2022. Core PPI (excluding food and energy) rose 0.9%, sharply above expectations of 0.3%. Stripping out food, energy, and trade services, the index climbed 0.6%, the biggest gain since March 2022.

• Market reaction: Odds of a September Fed rate cut dipped slightly but remain high, according to the CME FedWatch tool.

Our take

The Fed’s in a tricky spot. Rising CPI and PPI readings suggest inflation is re-accelerating, which could complicate the outlook for mortgage rates. While borrowing costs have edged lower recently and affordability remains tight, a Fed cut alone won’t guarantee relief. Mortgage rates also depend on other facts: 10-year Treasury yields, inflation expectations, broader market sentiment. If inflation keeps rising, expect mortgage rates to remain elevated for longer, clouding the path to more affordable housing finance. Keep an eye out for August 29th, when the next major report on inflation comes out.

The reality of the lock-in effect

A new Realtor.com survey shows more than 81% of homeowners have a mortgage rate below 6% and are in no rush to sell or even refinance in the current economy. Economists expect the share of mortgages below 6% to edge down to 75% by the end of 2025. Here’s what else the survey showed:

• This is the full breakdown of the share of mortgages at each rate:

  • 18.8% are equal to or higher than 6% (highest level since 2016)

  • 9.9% are between 5 and 6%

  • 17.9% are between 4 and 5%

  • 32.7% are between 3 and 4%

  • 20.7% are rate below 3%

Our take

While the lock-in effect has been keeping many homeowners on the sidelines, it hasn’t frozen the market. Between Q1 2024 and Q1 2025, the share of mortgages at 6% or higher grew as buyers pressed on despite elevated borrowing costs. Life events such as marriage, a new child, or divorce continue to drive moves by sellers and buyers. Even in a slow year, home sales are projected to hit about 4.3 million. Make sure you’re positioned to claim your share. Scroll down to today’s Foundation Plans for practical steps on how to do it.

The most expensive sales of July

The priciest home sold last month was “Spelling Manor” in Los Angeles, once owned by legendary TV producer Aaron Spelling, which closed for $110 million. For perspective, the next home on the list–a beachfront compound in Delray Beach, FL–sold at about half that price ($51 million) 

Of the 10 most expensive sales, five were in coastal Florida, four were in Southern California, and one was a Martha’s Vineyard estate that was once President Obama's summer home. All sold for over $29 million, with four topping $40 million.

These were the most expensive U.S. home sales of July:

1. 594 S. Mapleton Dr., Los Angeles, CA 90024: Sold for $110 million

2. 2325 S. Ocean Blvd., Delray Beach, FL 33483: Sold for $51.1 million

3. 29130 Cliffside Dr., Malibu, CA 90265: Sold for $49.8 million

4. 555 Reinante Ave., Coral Gables, FL 33156: Sold for $40 million

5. 9001 Collins Ave. Unit S-PH2, Surfside, FL 33154: Sold for $38.2 million

6. 41 Cobbs Hill Road, Chilmark, MA 02535: Sold for $37 million

7. 370 S. Hibiscus Dr., Miami Beach, FL 33139: Sold for $31.8 million

8. 28808 Cliffside Dr., Malibu, CA 90265: Sold for $30.5 million

9. 845 Longboat Club Rd., Longboat Key, FL 34228: Sold for $30.3 million

10. 1680 N. Doheny Dr., Los Angeles, CA 90069: Sold for $29.5 million

Our take

Even as climate risks rise and insurance costs soar, demand for luxury coastal real estate shows no signs of cooling. This is clearly true in Florida’s high-risk coastal zones, where wealthy buyers continue to invest. For high-net-worth buyers, exclusivity and lifestyle still outweigh concerns over long-term risk.

Schematics

The news that just missed the cut

• The #1 homebuyer education platform agents aren’t using

• Real is offering a free 8-week AI training for all agents

• The majority of homes are now selling below ask

• Buyer agent commissions return to pre-NAR-settlement levels

• Angelina Jolie is preparing to put her luxe Hollywood estate on the market

Foundation Plans

Advice from James and David to win the day

Recently, in a speech to fellow agents, Gary Keller said, “Lead generation will lead to success in a slow market.” We couldn’t agree more. Agents who consistently generate and nurture leads will outperform those who wait for business to come to them. That’s why, starting with this edition, we’re diving deep into lead generation, sharing our best strategies to help you attract, convert, and sustain a steady flow of clients.

1. Protect your lead-gen time –  Lead generation is the lifeblood of a thriving real estate business, yet many agents either approach it inconsistently or let distractions take over. Protecting this time is non-negotiable. Treat it with the same importance as a client meeting. By balancing outreach to new prospects with nurturing existing ones, you’ll ensure no lead slips through the cracks while steadily growing your pipeline.

2. Time-block for both new and follow-up leads – Set a daily lead-gen block and split it evenly between calling new leads and following up with existing ones. This ensures you’re both growing your audience and moving warm prospects toward conversion. Treat this time as sacred — silence notifications, close your email, and let colleagues know you’re unavailable so your focus stays sharp.

3. Prioritize speed with new prospects – When new leads come in, act fast! The first agent to connect often wins the business. Go beyond fresh inquiries by targeting expired listings, FSBOs, and older leads that have gone cold. Keep a daily contact goal to maintain high outreach volume and increase your number of quality conversations..

4. Systematize your follow-up process – Your database, warm prospects, and pending deliverables are goldmines… but only if you work them consistently. Use a CRM to track every interaction, set reminders for follow-ups, and deliver on promises like market analyses or property lists quickly. Consistent follow-up builds trust, keeps you top of mind, and turns “maybe later” into “let’s meet now!”

5. Add a personal touch to stand out – In a crowded market, personalized communication can tip the scales. For leads who haven’t set an appointment, send a short video reintroducing yourself, highlighting your expertise, and showing genuine interest in their needs. This extra step makes you memorable and increases the likelihood they’ll take your next call.

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Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Don’t let events or other people set your agenda. Stay ruthlessly focused on your goals — your time is limited, and you only get one life. Make the most of it. Have a great weekend, friends! We’ll see you back here on Tuesday.

- James and David