Homeowners Blindsided by Hidden Crisis
Rates dipped and mortgage demand just jumped to a three-year high, giving the market a quick shot of oxygen.
But under that pop, a growing patchwork of “zombie” foreclosures—especially across the Rust Belt and Midwest—shows real distress hiding in plain sight.
Meanwhile, a potential “triple whammy” in bonds—sticky inflation, rate cuts, and tariff pressure—could keep long-term yields (and borrowing costs) stubbornly high.
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“Zombie Foreclosures” Are Creating Great Deal Opportunities in These States
Out of 24.9 million investor-owned properties nationwide, 3.6% (882,336 homes) were vacant in the third quarter of 2025. The states with the highest number of zombie foreclosures were in the Rust Belt and Midwest, except Alabama:
Southern States Dominate List of Riskiest U.S. Housing Market Counties in Q2 2025
Seven out of the 10 counties with the highest underwater rates were in Louisiana. The top five were Rapides Parish, LA (17.3% of homes seriously underwater); Calcasieu Parish, LA (16.9%); Caddo Parish, LA (14.3%); Tangipahoa Parish, LA (14.1%); and East Baton Rouge Parish, LA (12.1%).
Scenario of a Triple Whammy for Long-Term Treasury Yields
If core services inflation continues to act up in the PPI and CPI this week and later this year, the bond market is faced with rate cuts amid accelerating inflation. But this time, a third element could be on the table: the loss of revenues from the tariffs.
Mortgage Demand Jumps to the Highest Level in 3 Years, as Interest Rates Drop Sharply
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.49% from 6.64%, with points decreasing to 0.56 from 0.59, including the origination fee, for loans with a 20% down payment.
Housing Bubble & 3% Mortgages Replace Breathless Media Hype of Bidding Wars
The below-3% mortgages were a product of the most reckless Fed ever when it repressed interest rates from early 2020 through early 2022, with massive amounts of QE and 0% policy rates. Turns out, free money is a toxin, and now the housing market has cancer, and the treatment is painful.
U.S. Housing Market Value Hits $55.1 Trillion
The total value of U.S. housing climbed to $55.1 trillion in June 2025, a record high and a dramatic $20 trillion gain since before the pandemic. About one dollar in eight (12.5%) of that five‑year run‑up came from newly built homes; the rest was price appreciation on the existing stock.
