Independence
July 2025
Independence. It's July's favorite word—flags, fireworks, and a lot of nostalgic speeches. But independence isn't just for history books or holiday weekends. It's also a critical principle in economic policy, one that matters more right now than most people want to admit.
There's been plenty of talk about replacing the Fed Chair to "fix" interest rates—as if swapping out leadership is a shortcut to cheaper money and faster growth. It's a convenient political pitch. But that's exactly why the Fed was designed to be independent: to resist election-cycle thinking that trades credibility for short-term gain.
We'll dig into why threatening that independence is more likely to backfire—raising long-term borrowing costs, undermining budget projections, and risking exactly the kind of volatility markets hate. And closer to home, Denver's housing market is navigating its own version of this tension. Detached homes are adjusting to reality with longer days on market and sharper price cuts, while the attached segment remains consistently slower than last year, forcing sellers and buyers alike to get real about their options.
This month, we're talking about why true independence—whether in monetary policy or local pricing strategy—means dealing honestly with the market you have, not the one you wish you had.
The Skim:
1. Independence Day
2. Detached: A Mid-Summer Shift
3. Attached: More of the Same Slowness
Independence Day
Independence is something we celebrate every July, but it's not just a historical concept or a patriotic slogan. It's also a critical economic principle that too often gets overlooked in today's policy debates. The independence of our central bank isn't just bureaucratic window dressing—it's one of the key guardrails protecting the country from the kind of long-term damage that shortsighted political moves can create.
Right now there's a lot of noise suggesting that replacing the Fed Chair is some sort of easy solution for getting interest rates down. It's a tempting political narrative: swap out the leadership, loosen policy, goose the economy, problem solved. But that view is dangerously simplistic. The Federal Reserve isn't a one-person show. Policy is set by the full FOMC—a voting committee with regional presidents who can't be removed at will, and Board members serving staggered 14-year terms precisely to resist this kind of political pressure. Even a new, more dovish Chair would still need to build a real majority to shift course, especially in an environment of sticky inflation and a still-tight labor market.
But even more importantly, the real cost of trying to politicize the Fed isn't about what happens to short-term rates next quarter—it's about the permanent damage to credibility. If investors conclude that monetary policy decisions are now politically captive, they'll demand higher compensation for that risk. That shows up immediately in long-term interest rates and debt servicing costs. We've seen this playbook before. Arthur Burns in the 1970s gave in to pressure from the White House to keep rates artificially low, letting inflation expectations slip their anchor. The result was a decade of economic instability, culminating in Volcker's painfully high rate hikes to restore trust.
It's especially worth thinking about in the current fiscal context. Sure, June saw a headline budget surplus—the first outside of April since 2017—but it was driven by roughly $250 billion annualized tariff revenue, which is a double-edged sword. That tariff revenue is already starting to show up in inflation data, with June's CPI ticking up 0.2% as these costs work through the supply chain. Meanwhile, early signs of weaker trucking demand suggest trade volumes could slow, undermining those revenue projections. Even if the tariff windfall holds, a modest 0.5% increase in long-term interest rates—easily triggered by lost faith in Fed independence—would add at least $180 billion per year to debt servicing costs, wiping out much of that benefit.
That's the real trade-off policymakers need to think about. Undermining the Fed's independence for short-term political optics is a net negative proposition. If we want durable economic strength, we should let the Fed do its job without interference, encourage labor market participation in critical blue-collar and manufacturing roles, and expand legal immigration to support our aging population. Independence isn't just for July 4th speeches—it's the foundation for keeping our economy stable and competitive in the long run.
Detached: A Mid-Summer Shift
June has always been the traditional high-water mark for pricing in Denver's buying season, and this year is no exception. Buyers came out early, motivated by slightly softer mortgage rates in late spring, but that surge is already tapering. The median days on market for detached homes jumped from 5 in June to 12 so far in July—a seasonal swing that's entirely consistent with last year's shift, but nonetheless important for setting expectations.
Inventory tells an even more interesting story. We're now sitting on four months of predicted supply—and this is the second consecutive month with supply at that level. That might not sound dramatic at first, but context matters: this is the first time Denver has recorded two back-to-back months with four months of supply since 2013. In practical terms, it's a clear marker that the market is rebalancing away from the hyper-competitive, low-inventory environment we saw from 2020 through early 2023.
Sellers are starting to read the tea leaves. The average list price for detached homes dropped roughly 5% month-over-month in June. That's not necessarily a panic move—it's a rational adaptation. Many sellers know the summer clock is ticking: pricing high and hoping for the best isn't working when buyers have more choices and better negotiating leverage.
We're also seeing pricing strategy become a bigger differentiator. Well-prepared, well-priced homes are still moving quickly. Overpriced or underprepared listings are increasingly sitting—and when they do sell, they're often conceding on price or inspection terms. It's a sign that sellers are learning, maybe reluctantly, that they're not calling the shots the way they did even a year ago.
Attached: More of the Same Slowness
The attached segment—condos, townhomes, and smaller-footprint inventory—has shown a remarkably stable pattern over the last few months: slower than last year, but in a consistent, predictable way. Median days on market for attached properties have been running about two weeks longer than 2023 levels for 3–4 months now, indicating buyers in this segment are cautious but present.
In June, that pattern held steady, with median DOM around 30. But the early July data raises a caution flag: median DOM so far this month is 42. If we don't see a pickup heading into late July, we're looking at a meaningful further softening. That trend matters because the attached segment is often a bellwether for affordability stress. Higher HOA dues and less square footage per dollar mean buyers in this category are especially rate-sensitive—and less willing to overextend when monthly budgets are already squeezed.
Negotiations are also intensifying. Sellers in the attached space who've internalized this shift are pricing more sharply and still getting deals done. But there's still a cohort hoping for the easy spring of 2021—and they're the ones contributing to higher DOM stats. Buyers aren't refusing to buy; they're just refusing to overpay for mediocre product in a rate environment that doesn't leave much room for error.
Looking Forward
If there's one theme that defines the Denver market right now, it's the transition to a high plateau. Prices remain historically elevated—nobody's suggesting a major collapse—but the market is clearly working off the excess froth from the COVID-era boom.
The macro backdrop isn't exactly giving real estate much of a tailwind. Inflation has ticked up again, feeding directly into the 10-year Treasury yield and keeping mortgage rates pinned slightly higher. Even incremental moves in the 10-year are meaningful in this affordability-sensitive environment. Meanwhile, the labor market remains tight, especially for skilled trades and service-sector roles. That tightness is keeping wage pressures elevated, which in turn reinforces the Fed's cautious stance. It's hard to see rates dropping enough in the near term to be a meaningful catalyst for a real estate re-acceleration.
That's not all bad news. A market with 4–6 months of supply is what textbooks call balanced. It means pricing power is shared more evenly between buyers and sellers. Negotiations are real, inspections matter again, and agents can actually earn their commission by delivering strategy instead of simply unlocking the door.
For sellers, it means adapting to the reality that pricing expectations need to be rooted in today's market, not last spring's comps. For buyers, especially those who've been sitting out waiting for sanity, this environment offers more choices, more negotiation leverage, and less risk of a bidding war driving them beyond comfort.
*Ready to navigate today's balanced market? Contact Blue Pebble Group for expert guidance on buying or selling in Denver's evolving real estate landscape.*