In the coming months, there could be a significant shift in the US housing market, with housing stocks poised for a surge, according to the July 30 edition of the Investing Whisperer email newsletter.
This outlook might seem contrary to the current consensus, given the myriad challenges such as high inventory levels, steep prices, sluggish sales, and notably, elevated interest rates.
However, newsletter author Keith Schaefer said the sector is on the cusp of a turnaround, with several major catalysts potentially accelerating this change, which the market has yet to factor in.
Currently, homebuilder stocks are remarkably undervalued, the newsletter noted, especially when compared to the broader market. While the stock market continues to hit new highs, the S&P Homebuilders ETF is still rebounding from its lows in April. Notably, DR Horton Inc. (DHI:NASDAQ), the nation's largest homebuilder, saw its stock jump over 15% on the day it reported earnings last week, despite the results being less than stellar.
"All DR Horton said was that things weren’t getting worse. That’s all the market needed to hear," Schaefer wrote.
DR Horton's valuation stands out, trading at 13x PE based on this year's earnings and just 12x for next year's, significantly below the market multiple of 22x, Schaefer noted.
DR Horton also boasted a robust return on equity of 16% last quarter, with expectations to maintain a 20% return on equity long-term. These are not the metrics of a struggling business, Schaefer said. Moreover, these are considered trough earnings. During the COVID-induced homebuilding surge, DR Horton achieved US$16 per share in EPS.
The company has been strategically repurchasing shares, buying back 12.5 million shares last year, reducing their share count by 9%, and also pays a US$1.60 per share dividend, highlighting its shareholder-friendly approach.
Focus on Interest Rates
What's the catalyst for a turnaround? Schaefer said it primarily revolves around interest rates. Housing is heavily dependent on mortgage rates; lower rates mean lower housing costs. Although rates have been high, President Donald Trump has been vocally pressuring the Federal Reserve to reduce them to as low as 1%. Bill Pulte, with deep ties to the homebuilding sector through PulteGroup (PHM – NASDAQ), has also been a vocal critic of the current rate policy, even calling for congressional action against Fed Chair Powell.
While it's true that long-term rates are more crucial for housing, even a reduction in short-term rates could be beneficial, Schaefer noted. It would encourage more homeowners to opt for variable-rate mortgages and developers to seek short-term financing for new projects. There's also a possibility that a decrease in short-term rates could lead to lower long-term rates, despite concerns about inflation.
This focus on rates and housing by the Trump administration is strategic, aimed at stimulating economic growth through the housing market. The recent passage of the Big, Beautiful Bill, despite potentially increasing the deficit, underscores the necessity for economic expansion as the primary means of deficit reduction, the newsletter said.
The housing market is at a potential turning point, and if rates do begin to decline, sectors connected to housing, from builders like DR Horton to platforms like Beeline Holdings, could see substantial gains.
"Mull it over. I will, too," Schaefer wrote. "While I’m not 100% convinced that this thesis will pan out, I am confident if it does, there are lots of ways to play it and lots of money to be made. All we need to do is wait for interest rates to turn."
'Mortgage Rates Have Been Quite Volatile'
Not everyone agrees with that assessment. According to a report by Erika Giovanetti for U.S. News & World Report on August 1, mortgage rates are projected to slightly decrease in 2025 as the U.S. economy experiences a slowdown, though fluctuations will persist due to various factors including tariffs, tax cuts, and other elements of Trump's economic policies.
Currently, analysts predict that the 30-year fixed mortgage rate will oscillate between 6% and 7% over the next two years. However, these projections could shift as new economic data is assessed.
Despite remaining stubbornly high this year, the exact trajectory of mortgage rates amidst ongoing economic volatility is challenging to pinpoint. Analysts now anticipate that the 30-year fixed rate will hover around the mid-6% range throughout 2025, with a gradual decline expected through 2027. This prevailing economic uncertainty is echoed across various forecasts.
While some industry experts foresee a decline in rates, others like Schaefer anticipate them to stabilize. As long as the economy continues to exceed expectations, rates are likely to remain elevated.
According to Paul Centopani writing for The Mortgage Reports on July 31, there has been a bit of relief as mortgage rates have decreased for the second consecutive week. The average 30-year fixed-rate mortgage (FRM) fell slightly to 6.72% on July 31 from 6.74% on July 24, as reported by Freddie Mac. This drop continues a trend, with the average 30-year FRM staying below 7% for 28 straight weeks.
"Mortgage rates have been quite volatile, reacting to daily economic updates, yet they have consistently hovered between 6% and 7% over the past year. This stability is due to a mix of economic cooling, which tends to lower rates, and persistent inflation, which applies upward pressure," explained Kara Ng, senior economist at Zillow Home Loans, Centopani reported.
Experts from Realtor.com, First American, and other institutions are currently debating whether 30-year mortgage rates will rise, fall, or stabilize in August.
Looking ahead to the rest of 2025, predictions vary among major housing authorities. The National Association of Realtors anticipates the average 30-year fixed mortgage rate will drop to 6.4% in Q3, presenting the most optimistic outlook. On the other hand, the Mortgage Bankers Association forecasts a slightly higher rate of 6.8%, the most conservative estimate among the group.
Expert: Find the Right Property, Make Sure You're Financially Ready
In April, mortgage rates surged as the bond market reacted sharply to Trump's announcement of significant tariff proposals, causing 10-year Treasury yields to spike and mortgage rates to follow suit, Sabrina Karl wrote for Investopedia on August 4. Since the beginning of June, however, there has been some respite for homebuyers, with the benchmark mortgage rate progressively falling below the 7% threshold, reaching its lowest point in five weeks last week. Rates for other types of loans have also decreased to levels seen in June, with jumbo 30-year rates hitting their lowest since April.
Last week, rates on 15-year new purchase loans fell by 15 basis points, bringing the average down to 5.75%, Karl noted. This is now significantly lower than the April peak of 6.31%. Additionally, a decrease of 8 basis points in jumbo 30-year rates last week brought the average down to 6.73%, the lowest since early April, marking an improvement of 42 basis points from the April high of 7.15%.
While today's rates are higher than those seen last fall and winter, 30-year averages in the 6% range still represent an improvement over much of 2025, including the year-to-date peak of 7.14% in mid-April, according to the report. Moreover, many experts anticipate that rates will stabilize in the mid-6% range for the foreseeable future, suggesting that delaying a purchase until next year might not yield significant savings.
Relying on a Federal Reserve rate cut for lower mortgage rates is also uncertain, Karl noted. There is no assurance that the Fed will reduce rates in 2025, and even if it does, mortgage rates may not necessarily follow. In fact, despite three Fed cuts totaling a full percentage point in late 2024, mortgage rates actually increased.
Therefore, it's often wiser to base your home buying decision on your financial readiness and finding the right property, rather than attempting to time the mortgage market, which is nearly impossible and may not result in financial benefits, she wrote. Should rates drop significantly in the future, refinancing into a more affordable loan is always an option.
Beeline Holdings Inc.
One company that could benefit from falling rates is rapidly expanding digital mortgage platform Beeline Holdings Inc. (BLNE:NASDAQ).
On July 16, 2025, Glenn G. Mattson, an analyst at Ladenburg Thalmann, initiated coverage of the company with a Buy rating and set a price target of US$4.50, suggesting a potential increase of 226% from the current share price of US$1.38. Mattson praised the company's innovative strategies in the mortgage sector, which include AI-driven platforms and a unique cash-out equity product, both of which he believes have substantial growth potential.
In a notable move last June, Beeline launched an innovative cash-out equity product that allows homeowners to sell equity stakes to investors rather than relying on traditional debt instruments, thereby eliminating the need for monthly debt payments with a defined maturity date. This product is supported through a third-party that issues a tokenized Cryptocurrency backed by pooled residential properties recorded in the public record which is one of the largest classes of real world assets outside of the dollar. Beeline's first transaction using this new model was successfully completed on June 25, 2025, establishing a groundbreaking moment in residential real estate financing.
Mattson noted that Beeline's revenue from its lending operations rebounded in 2024, reaching US$3.9 million after a decline the previous year due to rising interest rates. The company has strategically concentrated on Non-QM (non-qualified mortgage) loans, which now constitute 60% of its loan originations with conventional mortgages backed by Freddie and Fannie currently comprising 40% of its mortgage business. For 2025, Beeline anticipates its revenue to rise to US$12.3 million, with expectations to jump to US$30.6 million in 2026, fueled by strong loan origination, the introduction of new software, and its innovative equity product. The company is expected to achieve positive adjusted EBITDA of US$7.1 million by 2026, according to the analyst.
Beeline is also investing in AI technology, holding a significant stake in MagicBlocks, a platform that boosts digital sales through sophisticated AI chatbots. This technology has notably improved application conversion rates and is currently under trial in several pilot programs. Moreover, Beeline has established strategic partnerships to enhance its offerings to customers with credit challenges, further strengthening its market position.
Operating in the vast yet fragmented U.S. mortgage market, where independent mortgage bankers hold a significant share, Beeline's focus on the underserved Non-QM segment uniquely positions it, particularly among Millennial and Gen Z homebuyers who often face challenges with traditional lending standards.
Mattson's valuation of Beeline at a 3.1x revenue multiple for 2026 is consistent with industry averages and reflects the company's innovative approach to the market and its potential for rapid expansion. However, he also points out potential risks, including the company's ongoing need for capital to support its growth and its dependence on warehouse credit facilities.
Buying Homes With Crypto
Prospective American homebuyers may soon have the option to use their cryptocurrency holdings to bolster their mortgage applications, as suggested by the head of the Federal Housing Finance Agency, which supervises housing authorities like Fannie Mae and Freddie Mac. In a recent announcement on social media, Bill Pulte stated, "After extensive research, and aligning with President Trump’s ambition to position the United States as the global hub for cryptocurrency, today I directed the esteemed Fannie Mae and Freddie Mac to gear up their operations to recognize cryptocurrency as an asset in mortgage evaluations."
Beeline has already initiated steps towards this innovation, with its subsidiary Beeline Title LLC integrating cryptocurrency into real estate dealings. On June 25, the company reported completing one of the pioneering residential real estate transactions funded through the sale of a cryptocurrency token backed by real property. This transaction represents a significant advancement in merging blockchain technology with conventional real estate financing, integrating decentralized finance with traditional title and escrow services.
"Several mortgage lenders are already developing funding models that convert cryptocurrencies to U.S. dollars at closing," mentioned Liuzza. "Yet, for these models to scale effectively, it’s imperative to partner with a title company that is not only versed in blockchain transactions but also equipped with the infrastructure to handle and reconcile these transactions in compliance with federal and state laws."
Streetwise Ownership Overview*This trailblazing transaction executed by Beeline Title sets the stage for wider adoption. Another branch, Beeline Loans, Inc., is poised to introduce a Fractional Sale of equity product that taps into the crypto ecosystem in early August 2025, with Beeline Title overseeing the title and closing services for each deal—unless borrowers choose an alternative title company.
Beeline Title is also planning to extend this platform to all mortgage lenders, offering a validated system for the reconciliation, compliance, and disbursement of cryptocurrency token transactions. "Our team established Linear Title, one of the largest privately held title agencies in the U.S., before it merged with Real Matters and went public on the TSX," Liuzza added. "Up until 2019, we finalized over one million title transactions nationwide, and this new platform is a continuation of that expertise—customized for the forthcoming wave of mortgage transactions."
Ownership and Share Structure
According to Refinitiv, 25% of Beeline Holdings is owned by insiders and management and 3% is held by institutions. The rest is retail.
Top shareholders include the CEO Liuzza with 22.63%, Director Joseph Freedman with 1.37%, and Head of Investor Relations Geoffery Gwin with 0.79%.
Its market cap is US$20.47 million with 9.3 million shares outstanding. It trades in a 52-week range of US$0.62 and US$29.80.
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Important Disclosures:
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Beeline Holdings Inc.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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