USA Law and Practice Contributed by: Richard L. Rosen, Leonard S. Salis and Dennison Marzocco, Rosen Karol Salis PLLC
1. General 1.1 Main Sources of Law
Geopolitical Issues Key construction materials remain subject to signifi - cant Section 232 tariff duties, including a 50% tariff on steel and aluminium, a 50% tariff on copper, and a combined duty of approximately 45% on Canadian softwood lumber – which accounts for roughly 71% of US lumber imports. While the impact on residen - tial construction costs has been more moderate than initially feared, the industry continues to face ongoing cost pressures in 2026. The tariff landscape shifted on 20 February 2026, when the Supreme Court ruled 6-3 that President Trump’s IEEPA-based tariffs were unconstitutional – though Section 232 tariffs on key construction materials remain fully in force. The Trump administration responded swiftly by imposing a new 15% temporary global import surcharge under Sec - tion 122 of the Trade Act of 1974, effective 24 Feb - ruary 2026, adding further uncertainty to the trade landscape. Low Residential Inventory While national housing inventory grew approximately 10% year-over-year through early 2026, the market remains below pre-pandemic levels by roughly 18%. The picture is highly regional: nine states – includ - ing Texas, Florida, Arizona and Colorado – have sur - passed pre-pandemic inventory levels, while much of the Northeast and Midwest remains comparatively tight. Low Vacancies in Multi-Unit (Rental) Properties The rental market has undergone a notable shift. The national multifamily vacancy rate reached 7.3% at the start of 2026 – a record high going back to at least 2017 – driven by a surge in new apartment deliveries coupled with softer demand. Nationally, rents have declined for the sixth consecutive month in Janu - ary 2026. However, the picture varies significantly by region: urban vacancy rates (7.6%) are rising faster than suburban rates (6.9%), and “Sun Belt” cities such as Austin and Atlanta continue to face significant over - supply, while many Northeast and Midwest markets remain comparatively tight. Office Space Office vacancies remain elevated, but are show - ing meaningful signs of recovery. The national office vacancy rate ended 2025 at approximately 18.4%,
Real property law in the United States is primarily derived from the common law of the states and has been modified over time by statute. Certain aspects of real estate law are governed by federal law. For exam - ple, federal law makes discrimination in real estate transactions on account of race, colour, religion, sex, national origin, familial status or disability illegal. Envi - ronmental issues affecting real property are typically governed by federal law. US courts have also shaped real property law through the interpretation of statutes and common law, to address various issues such as eminent domain, zoning and landlord-tenant disputes. 1.2 Main Market Trends and Deals While typically volatile, the US real estate market is currently affected by various macroeconomic factors. The Residual Effects of Inflation While the rate of inflation in the United States has decreased to about 2.4% as of January 2026 – its lowest level since May 2025 – the inflation-affected costs of goods, labour and real estate prices remain high. As a result, rental prices remain high as well. The increased cost of labour and materials has also impacted the costs of owning and operating commer - cial real estate. Further, these factors, along with the cost of financing generally, have affected the ability of commercial tenants to operate profitably while paying the rents and other expenses that landlords require. The combination of these negative factors has had a general impact on the commercial real estate market, which, ironically, has somewhat countered the general upward inflationary pressure on the economy. Moderately High Interest Rates The federal funds rate currently sits at a target range of 3.5% to 3.75%, following three consecutive quar - ter-point cuts in 2025. Mortgage rates have declined meaningfully from their recent highs, with the average 30-year fixed-rate mortgage at approximately 6% as of February 2026 – down from 6.85% at the same time last year. While this has led to a notable improvement in affordability, rates remain historically elevated rela - tive to the pre-COVID-19 pandemic era.
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