Daily Dose of Real Estate

Daily Dose of Real Estate for October 30

The mortgage industry lost two true stalwarts of service to the American Dream — John Bell, former Executive Director for VA Loan Guaranty Service, and Dr. Cheryl Travis-Johnson, Executive Vice President and COO of VRM Mortgage Services. Unsurprising but welcome news today: the Federal Reserve cut the Fed Funds rate by 25 bps. Powell was clear — and his words carried weight — stressing repeatedly that a December rate cut is “not a foregone conclusion.” Case-Shiller is now showing a dip in home values after months of meager gains, with 19 out of 20 major metros posting price declines. The FHFA report was a touch brighter, with values up 0.4% month-over-month (we’ll take what we can get). Mortgage rates continued inching lower, giving both purchase and refinance applications a nice bump. Meanwhile, Fannie Mae brought back its former President and Acting CEO to advise on reform options. Director Pulte seems to be stacking his team with familiar lieutenants and subject-matter experts — like Benson — while Freddie Mac remains largely untouched. That doesn’t happen for no reason, IMHO. Delinquency rates across both Single-Family and Multifamily GSE portfolios moved up slightly but are still well within “reasonable” territory.

Let’s get you caught up in 3 minutes.

— Tim

Today’s newsletter was prepared by our AI platform ALFReD. Know Better.

Table of Contents

KEY TAKEAWAYS

Federal Reserve cuts rates for second consecutive time: The FOMC lowered the federal funds rate by 25 basis points to 3.75%-4.00% range, marking the second straight cut amid concerns about a softening labor market 1
Mortgage rates hit one-year low: The 30-year fixed mortgage rate dropped to 6.30%, spurring a 111% year-over-year surge in refinance applications and a 7.1% weekly increase in total mortgage applications 2
Fannie Mae reports strong Q3 earnings: The GSE posted $3.9 billion in net income for the third quarter, up 16% from Q2, while maintaining a $4.1 trillion guaranty book and building regulatory capital 3
Home prices show mixed signals: U.S. home prices fell 0.3% month-over-month in August according to S&P Case-Shiller, with only Chicago showing price increases, while year-over-year growth slowed to 1.5% 4
Consumer confidence edges down: The Conference Board Consumer Confidence Index declined to 94.6 in October, with consumers expressing concerns about the government shutdown and future employment prospects 5
CFPB rescinds nonbank registry rules: The Consumer Financial Protection Bureau withdrew its controversial nonbank registration requirements, earning praise from the MBA for reducing regulatory burdens on lenders and servicers 6
Rocket Mortgage leads customer satisfaction: The digital lender climbed 4% to an ACSI score of 83, maintaining its leadership position as customer satisfaction with mortgage lenders declined to 74 7
Transaction Surge: CRE deal volume hit $27B in September, marking 2025’s busiest month with a 23% increase in nine-figure deals 1
Fed Rate Cut: Federal Reserve lowered rates by 25 basis points to 3.75%-4% range, boosting CRE refinancing opportunities 2
Delinquency Relief: Commercial mortgage delinquencies decreased in Q3 2025 after significant Q2 increases, though CMBS loans remain stressed at 5.66% 3
Lending Boom: MBA forecasts $827B CRE lending surge in 2025, representing a 24% jump driven by falling rates 4
Tech Earnings: CoStar revenue jumped 20% to $834M in Q3 with 58th consecutive quarter of double-digit growth, despite $31M net loss 5

RESIDENTIAL REAL ESTATE MARKETS

The residential real estate market is displaying clear signs of a shift toward buyer-friendly conditions across many metropolitan areas. National home prices continued their downward trajectory in August, with regional variations showing stark contrasts between markets. Housing inventory remains constrained despite some improvements in supply conditions, while sales activity shows modest gains.

NATIONAL HOUSING MARKET SHOWS SIGNS OF COOLING

Home prices declined 0.3% month-over-month in August according to S&P Case-Shiller U.S. National Home Price Index, following a 0.2% drop in July, marking the weakest annual growth rate in more than two years at just 1.5% 4
19 of the top 20 metropolitan regions experienced month-over-month price declines, with Chicago standing alone with a 0.3% increase, while Tampa experienced the steepest decline at 3.3% year-over-year 4
FHFA reported more modest price growth of 0.4% in August, representing a significant slowdown from earlier in the year, with continued regional divergence between competitive and cooling markets 8
New York City led year-over-year price increases at 6.1%, while 11 cities recorded price increases and 9 cities experienced declines, highlighting the uneven nature of the current market correction 4

INVENTORY AND SALES ACTIVITY TRENDS

Housing inventory reached 1.55 million homes for sale in September, equating to a 4.6-month supply compared to 4.2 months available a year earlier, showing gradual improvement in supply conditions 9
Existing home sales rose 1.5% in September to a seasonally adjusted annual rate of 4.06 million, representing the highest level in seven months and indicating renewed buyer activity 9
Newly built homes represented just 27% of for-sale inventory in August, the lowest share in four years, reflecting the easing of the mortgage rate lock-in effect as more homeowners with low-rate mortgages list their properties 10
Median time to sale reached 50 days in September, the longest for that month since tracking began, indicating homes are staying on the market longer as buyer selectivity increases 10

REGIONAL MARKET CONDITIONS

Bay Area continues robust activity driven by AI boom, with San Francisco showing significant increases in pending home sales and faster-than-average sales rates compared to national trends 11
Los Angeles shows signs of potential soft landing, with new listings coming to market below current median prices and homes taking a median of 63 days to sell, indicating market normalization 11

MORTGAGE MARKETS

Mortgage markets experienced significant activity over the past 48 hours, driven by the Federal Reserve’s rate cut and continued decline in mortgage rates. The 30-year fixed mortgage rate reached its lowest level in over a year, triggering substantial increases in both refinance and purchase applications. Delinquency rates showed mixed signals across different loan types and GSEs, while customer satisfaction data revealed industry challenges.

HISTORIC RATE DECLINE SPARKS APPLICATION SURGE

30-year fixed mortgage rate fell to 6.30% in the week ending October 24, down from 6.37% the previous week, marking the fourth consecutive week of declines and the lowest point since September 2024 2
Total mortgage application volume surged 7.1% week-over-week according to MBA’s seasonally adjusted index, with refinance demand jumping 9% for the week and 111% higher than the same week one year ago 2
Refinancing share rose to 57.1% of total applications, up from 55.9% the previous week, as borrowers rushed to take advantage of the improved rate environment 2
Purchase applications increased 5% for the week and registered 20% higher than the same week one year ago, indicating renewed homebuyer activity despite elevated price levels 2
USDA applications fell more than 26% due to the ongoing government shutdown that has frozen rural lending programs, directly impacting rural borrowers’ access to financing 2

CUSTOMER SATISFACTION REVEALS INDUSTRY CHALLENGES

Mortgage lender customer satisfaction declined 1% to 74 according to the American Customer Satisfaction Index, ranking among the lowest-performing ACSI industries despite tech improvements 7
Rocket Mortgage maintained leadership with ACSI score of 83, climbing 4% year-over-year, while Bank of America moved into second place with a 3% rise to 79, followed by Chase (78) and Wells Fargo (77) 7
Credit unions outperformed banks and independent lenders with an ACSI score of 78, compared to banks (74) and independent mortgage lenders (72), particularly excelling in service-related aspects and fee structures 7
Mobile experience remained industry strength with quality benchmark steady at 82 and reliability up 1% to 81, while fees and costs (69), call center satisfaction (73), and loan officers’ ability to explain processes (78) all improved 1% 7

ADJUSTABLE-RATE MORTGAGE TRENDS SHIFT

ARM share of applications dropped below 10% last week after trending higher in recent months, as borrowers preferred rate certainty when fixed rates became more attractive 2
Average refinance loan size remained elevated at $393,900, as borrowers with larger loans can achieve more substantial savings through refinancing in the current rate environment 2

DELINQUENCY RATES SHOW MIXED SIGNALS

Freddie Mac’s serious delinquency rate rose to 0.57% in September from 0.56% in August, up from 0.54% in September 2024, though remaining below pre-pandemic levels 12
Fannie Mae’s serious delinquency rate increased to 0.54% from 0.53% in August, up from 0.52% in September 2024, showing similar trends to Freddie Mac 12
Fannie Mae’s multifamily serious delinquency rate rose to 0.68%, representing the highest level since the housing bust excluding the pandemic period, reflecting ongoing stress in parts of the rental market 13

REGULATORY DEVELOPMENTS IN REAL ESTATE

Regulatory developments over the past 48 hours focused on reducing compliance burdens while maintaining consumer protections. The CFPB made significant reversals on nonbank registry requirements, while the Federal Reserve announced enhanced transparency measures for bank stress testing. The ongoing government shutdown continues to impact rural lending programs.

CFPB RESCINDS CONTROVERSIAL NONBANK REGISTRY RULES

CFPB rescinded its July 2024 regulation that would have established a public registry of nonbank entities subject to certain agency and court orders, marking a substantial victory for industry advocates 6
CFPB also withdrew its 2023 proposal to create a registry of nonbank contract terms and conditions, eliminating what the MBA called “compliance burdens without improving consumer protection or market transparency” 6
MBA strongly praised the decision, noting that virtually all intended registry information is already available in the NMLS Consumer Access database managed by state regulators 6
Regulatory rollback represents broader Trump administration efforts to reduce regulatory burdens on financial services companies while maintaining consumer protections and fostering market competition 6

FEDERAL RESERVE ANNOUNCES ENHANCED STRESS TESTING TRANSPARENCY

Fed issued significant proposals to enhance transparency of its bank stress testing framework on October 29, including enhanced public accountability measures and scenarios for the 2026 supervisory stress test 14
Proposals address long-standing industry concerns about Administrative Procedure Act compliance of current stress testing practices, responding to legal challenges from the Bank Policy Institute and other industry groups 14

GOVERNMENT SHUTDOWN IMPACT ON RURAL LENDING

USDA loan programs remain effectively frozen due to the ongoing government shutdown, with LeeCoye “LC” Parker of C2 Financial noting that “frozen USDA loans are stalling deals and delaying homeownership for first-time buyers” 15
Rural communities particularly affected as they depend heavily on government-backed financing programs that are currently unavailable during the shutdown 15

ECONOMIC NEWS

Economic developments centered on the Federal Reserve’s second consecutive rate cut and growing concerns about labor market softening. Consumer confidence declined amid government shutdown concerns, while data gaps created by the shutdown are complicating policy making. The Fed also announced the conclusion of its quantitative tightening program.

FEDERAL RESERVE CUTS RATES AMID LABOR MARKET CONCERNS

FOMC delivered second consecutive rate cut on October 29, lowering the federal funds rate by 25 basis points to 3.75%-4.00% range, reflecting growing concerns about labor market softening 1
Vote was not unanimous with Stephen I. Miran preferring a larger 50 basis point reduction and Jeffrey R. Schmid favoring no change, highlighting internal disagreement about appropriate policy stance 1
Fed noted that “job gains have slowed this year” and unemployment has edged up but remained low through August, while inflation remains “somewhat elevated” but employment risks have increased 1
Fed announced it will conclude reduction of securities holdings on December 1, ending the quantitative tightening program that has been shrinking the central bank’s balance sheet 16

CONSUMER CONFIDENCE REFLECTS ECONOMIC UNCERTAINTY

Consumer Confidence Index declined 1.0 point to 94.6 in October from an upwardly revised 95.6 in September, with the Expectations Index falling 2.9 points to 71.5, remaining below the 80 recession threshold 5
Government shutdown concerns dominated consumer sentiment, with multiple references to the ongoing federal government closure appearing in write-in survey responses expressing worry about economic data and government services 5
Inflation expectations ticked higher to 5.9% from 5.8% in September, while 52.8% of consumers expected interest rates to rise, up from 51.1% the previous month 5
Housing purchasing plans weakened for the month despite the overall six-month trend showing improvement, with the Conference Board noting “lower-but-steady confidence likely means a more measured approach to major purchases” 17

LABOR MARKET DATA GAPS CHALLENGE POLICY MAKING

Government shutdown created significant data gaps complicating Federal Reserve decision-making, with the September jobs report nearly a month overdue and questions about October employment data compilation 18
Fed Chair Powell acknowledged alternative data sources are helpful but “won’t be as effective as the main course” of official government statistics for monetary policy decisions 18
Available alternative data suggests continued softening, with ADP showing private employers shed 32,000 jobs in September and major corporations including Amazon, UPS, and Target announcing significant layoffs 18
Last official unemployment report showed 4.5% rate in August, little changed year-over-year, but current conditions remain unclear due to data reporting delays 18

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

September delivered the strongest CRE transaction month of 2025, with nearly $27 billion in deal volume driven by investor confidence returning across multiple asset classes. Nine-figure deals surged 23% as buyers targeted both stabilized assets and value-add opportunities.

MARKET ACTIVITY & TRANSACTIONS

September Volume Record: Nearly $27B in transaction volume set 2025’s monthly high, with nine-digit deals above $100M jumping 23% month-over-month and mid-cap transactions ($50M–$100M) rising 18% 1
Asset Mix Dominance: Multifamily, retail, and office assets captured 64% of all closings, while industrial properties secured 17% of September deals benefiting from logistics demand 1
Land Development Surge: Land deals doubled from August as developers positioned for pipeline growth across industrial and mixed-use projects 1

MAJOR TRANSACTIONS & PRICING

Largest Deal: Rithm Capital’s $1.6B acquisition of Paramount Group’s 17-asset Class A office portfolio topped September’s transaction list 1
Portfolio Strategy: New Mountain Capital acquired a $640M, 53-asset net-lease portfolio, reflecting growing interest in diversification and speed-to-market approaches 1
Price Discovery Mixed: Among deals with price history, 70% sold above prior sale prices while 29% traded at discounts, primarily in office sector. Manhattan’s 1177 Sixth Ave sold for $571M—42% below its 2007 valuation 1
Value-Add Success: Nuveen’s $100M purchase of Algonquin Commons tripled the prior purchase price following a $30M repositioning investment 1

COMMERCIAL FINANCING MARKETS

The Federal Reserve’s second consecutive 25 basis point rate cut to 3.75%-4% is driving a historic lending surge, with MBA forecasting $827B in CRE originations for 2025—a 24% jump from 2024. Multifamily lending continues leading the recovery.

INTEREST RATES & FEDERAL POLICY

Fed Rate Cut: Federal Reserve lowered rates by 25 basis points to 3.75%–4% range, marking second consecutive cut as CRE transaction volumes rise with office sales up 42% year-over-year2
Treasury Impact: 10-year Treasury yields dipped below 4% prior to Fed announcement, creating favorable refinancing conditions for CRE borrowers with maturing debt 2
Cumulative Relief: 150 basis points in cuts over the past year have eased financial conditions, with analysts noting borrowers may accelerate deals to lock in current rates 2

LENDING VOLUME & FORECASTS

Historic Surge: MBA expects $827B in total CRE originations for 2025, representing a 24% jump from 2024 levels driven by easing borrowing costs 4
Multifamily Leadership: $417B will come from multifamily loans while $410B from other commercial property types, with agency lenders accounting for more than 40% of multifamily lending 4
Recovery Timeline: Strongest recovery since pandemic expected through 2026, but MBA forecasts lending activity to level off by 2027, signaling limited window for aggressive expansion 6
September Volume: Total CRE transaction volume reached $42B in September, a 19% increaseover previous year according to MSCI Real Assets 2

COMMERCIAL SERVICING MARKETS

Q3 2025 showed improvement in overall commercial mortgage delinquencies after Q2 spikes, though CMBS loans remain most stressed at 5.66%. The market appears to be experiencing a typical downturn rather than a full-blown crisis, with loan modifications up 66% but still representing only 1.5% of total bank-held CRE loans.

DELINQUENCY TRENDS & PERFORMANCE

Q3 Improvement: Delinquency rates for commercial property mortgages decreased in Q3 2025compared to prior quarter, according to MBA survey covering $2.8 trillion in loans representing 57% of total commercial and multifamily mortgage debt 3
CMBS Stress Levels: CMBS loan delinquencies highest at 5.66% of loan balances 30+ days delinquent, up from 5.14% previous quarter 3
Capital Source Comparison: Life company loans at 1.45% delinquent (down from 1.40%), GSE loans at 0.64% (unchanged from 0.61%), FHA multifamily/healthcare at 0.79% (down from 1.04%) 3

PROPERTY TYPE & WORKOUT ACTIVITY

Mixed Property Performance: Delinquency rates increased for multifamily and health properties while decreasing for office, retail, industrial, and lodging properties 3
Modification Activity: Loan modifications up 66% year-over-year but represent only 1.5% of total bank-held CRE loans, suggesting manageable distress levels 7
CMBS Payoff Performance: 72% of CMBS conduit loans originally scheduled to mature in 2025 have already paid off—only slightly below long-term average of 77% 7
Market Assessment: Despite rising modifications and distress, CRE credit market showing signs of typical downturn—not full-blown crisis 7

INDUSTRY NEWS

Industry developments highlighted strong GSE financial performance, key leadership changes, and continued securitization activity. Fannie Mae reported robust third-quarter earnings while welcoming back former president David Benson as senior advisor. The industry also mourned the loss of VA Loan Guaranty Service Executive Director John Bell III, while commercial real estate lending is forecast to surge in 2026.

GSE FINANCIAL RESULTS AND LEADERSHIP CHANGES

Fannie Mae posted net income of $3.9 billion in Q3, up 16% from Q2 and down just 5% year-over-year, with guaranty book reaching $4.1 trillion and stable guaranty fee revenues of $7.3 billion 3
David Benson rejoins Fannie Mae as senior advisor after retiring as president in November 2023, bringing more than 30 years of experience in mortgage credit, finance, and capital markets back to the GSE as the Trump administration explores options for taking the GSEs public 19
Company provided $109 billion in liquidity to the mortgage market during the quarter, supporting more than 400,000 households, including 207,000 first-time homebuyers 13
Fannie Mae faces regulatory capital deficit of $25.4 billion as of September 30 under current Dodd-Frank requirements, despite strong financial performance 13
Freddie Mac scheduled to report Q3 results on October 30 before market open, with earnings call at 9 a.m. Eastern Time, as both GSEs continue critical mortgage market liquidity roles 20

INDUSTRY MOURNS LOSS OF VA LEADER

John Bell III, Executive Director for VA Loan Guaranty Service, passed away following an extended illness, with industry leaders remembering him as “a tremendous guy with a big heart who loved delivering VA Home Loan Benefits to his fellow Veterans” 21
Industry colleagues praised Bell’s dedication to veterans, with Darius Bozorgi of Veros calling him “1-of-1” and “a passionate advocate for Veterans and an even more amazing human being,” while Leslie Meaux Pordzik described him as “one of the most decent human beings” and “the consummate public servant” 21

INDUSTRY MOURNS LOSS OF VRM EXECUTIVE

Dr. Cheryl Travis-Johnson, Executive Vice President and COO of VRM Mortgage Services, passed away after dedicating over 30 years to advancing the housing industry and serving as instrumental leader in shaping VRM’s vision since joining in 2008 1
Travis-Johnson previously served as Director of REO Sales Operations for Freddie Mac, where she received multiple Premier Achievement Awards and held senior leadership roles across originations, branch operations, auditing, loan servicing, and REO sales 1
She earned Doctorate of Business Administration with Leadership concentration from Walden University in 2018, along with MBA from Walden and BA in Administration and Legal Processes with Economics emphasis from Mills College 1

SECURITIZATION ACTIVITY CONTINUES

Freddie Mac priced $343.2 million seasoned loan securitization on October 28, with SLST Series 2025-2 including both guaranteed senior and non-guaranteed subordinate securities backed by seasoned residential mortgage loans 22
Transaction managed by Citigroup and Nomura Securities as co-lead managers, marking continued activity in the structured transaction market despite broader economic uncertainties 22

COMMERCIAL REAL ESTATE LENDING SURGE PREDICTED

MBA forecasts dramatic 24% surge in CRE lending for 2026, predicting $827 billion in loan originations driven by falling interest rates and improved market conditions 23
Multifamily lending expected to lead growth with agency lenders continuing to provide substantial market support, as originations rose year-over-year during the first half of 2025 24
MBA cautions lending activity may level off by 2027, suggesting the current expansion window may be relatively short-lived despite strong near-term projections 23

LEGAL AND COMPLIANCE DEVELOPMENTS

Swift Home Loans faces class action lawsuit under the Telephone Consumer Protection Act for allegedly making unsolicited marketing calls and texts to consumers, highlighting ongoing industry challenges with trigger lead marketing practices 25

EARNINGS & FINANCIAL PERFORMANCE

CoStar Strong Revenue: $834M in Q3 revenue, up 20% year-over-year marking 58th consecutive quarter of double-digit increases, though company posted $31M net loss due to technology and marketing investments 5
Guidance Boost: CoStar raised adjusted EBITDA guidance for 2025 to $415-425M, an increase of $40M at midpoint 5
Homes.com Growth: Network had 115M average monthly unique visitors in Q3 2025, up from 111M in Q2, with 500-person sales team and 150 in pre-production 5
Freddie Mac Earnings: Will report Q3 2025 financial results before markets open Thursday, October 30, 2025 with earnings call at 9 a.m. Eastern 8

CORPORATE STRATEGY & DISTRESS

Brookfield Office Crisis: Racing to manage more than $8B in office debt maturities through 2026, with $2.8B due next year alone, currently seeking $2.5B financing for two Manhattan towers 9
Major Losses: Houston Center handed back to lenders in 2024, 175 W. Jackson Blvd in Chicago in foreclosure, Brooklyn tower in foreclosure after defaulting on $133M loan 9
Alexandria Challenges: Navigating higher vacancies, tighter capital, and tempered tenant growth in life sciences real estate, focusing on income-generating assets while reducing non-revenue properties 10

TECHNOLOGY & INNOVATION

AI Investment Focus: CoStar CEO announced 50% of Homes.com’s software efforts focused on building AI-empowered features, expected to “open up huge new value opportunities” 5
Market Activity Index: LightBox CRE Activity Index rose to 2025 high of 116.8 in September, fueled by late-Q3 property listings and due diligence pipelines 1