Homebuyers just started braving the snowy conditions on the East Coast and returning to home shopping — back to year-over-year growth — just in time for another Nor’easter to hit the coast. The median age of a homebuyer dipped to 34, slightly below the recent trend line.
Mortgage spreads continue to provide a positive backdrop for housing in 2026, closing at 1.94% — slightly above the historical range of 1.60%–1.80% — helping keep rates relatively low. If spreads matched their 2023 peak levels, mortgage rates would be 1.20 percentage points higher.
The Council of Economic Advisers estimates the CFPB has cost consumers $237–$369 billion since 2011, with mortgage borrowers paying $116–$183 billion in higher costs due to regulatory compliance burdens. Multifamily loan delinquencies surged to 1.37% in Q3 2025 from 0.40% in Q3 2023, while $76.6 billion in commercial mortgage-backed securities faces hard maturities in 2026 with no extension options remaining — creating significant distress across the sector.
Industrial real estate attracted major capital, with BlackRock launching a new net lease REIT and Blackstone securing $1.2 billion in CMBS refinancing for its 7.4 million-square-foot portfolio, driven by strong rent growth, including a 132% renewal increase from Home Depot.
Let’s get you caught up and out the door in 3 minutes. Tim
Today’s newsletter was prepared by our AI platform ALFReD. Know Better.
KEY TAKEAWAYS
- Supreme Court strikes down Trump’s sweeping tariffs in 6-3 decision ruling president lacks authority under IEEPA to impose global levies, potentially triggering $70+ billion in refunds to businesses 1 2
- Trump announces new 10% global tariff following Supreme Court ruling, with exceptions for critical minerals, beef, fruits, cars, pharmaceuticals, and products from Canada/Mexico, effective February 24 3 4
- Pending home sales declined 0.8% in January with NAR’s Pending Home Sales Index falling to 70.9, signaling subdued buyer activity heading into spring despite mortgage rates hovering around 6% 5
- Weekly pending sales returned to year-over-year growth after January snowstorm impacts cleared, with 2026 showing 59,283 sales versus 56,693 in 2025, indicating market recovery 5
- Federal court upholds FinCEN’s anti-money laundering rule for residential real estate transfers, with implementation now scheduled for March 1, 2026, after Fidelity National Financial’s legal challenge was rejected 6
- Fed officials signal March rate hold is nearly certain with 90%+ probability as inflation data holds steady and GDP growth slows to 1.4% annualized in Q4 2025 7
- Mortgage rates ended the week at 6.04% according to Mortgage News Daily, with spreads remaining favorable for housing at 1.94% versus historical peaks 5
- Council of Economic Advisers estimates CFPB has cost consumers $237-$369 billion since 2011, with mortgage borrowers paying $116-$183 billion in higher costs due to regulatory compliance burdens 8
- Multifamily distress accelerates Delinquency rates hit 1.37% in Q3 2025, up from 0.40% in Q3 2023, with $8.9B in delinquent loans and loss rates doubling to $911M 1
- CMBS maturity wall looms $76.6B in commercial debt faces hard maturities in 2026 with no extension options remaining, according to Trepp research 2
- Industrial capital surge continues BlackRock launches new industrial REIT while Blackstone secures $1.2B CMBS refinancing for 7.4M SF portfolio, with Home Depot renewal showing 132% rent increases 3
- Multifamily construction shows resilience December 2025 starts hit year-high 402,000 units despite broader market caution, though completions fell 15.9% year-over-year 4
- DC metro attracts contrarian capital 29th Street Capital acquires 1,225-unit portfolio in Prince George’s County despite federal job cuts pressuring regional fundamentals 5
- Office sector faces AI headwinds Major REITs including SL Green, Vornado, and BXP see sharp stock declines despite leasing activity, with tenant concessions 69% higher than pre-pandemic levels 6
RESIDENTIAL REAL ESTATE MARKETS
The housing market showed mixed signals in late February, with pending sales declining monthly but weekly data indicating recovery from winter weather disruptions. Inventory levels reached multiyear highs while pricing pressures showed signs of easing, and first-time homebuyer demographics remained stable despite ongoing tariff uncertainty.
PENDING SALES SHOW MIXED REGIONAL PERFORMANCE
- NAR’s Pending Home Sales Index fell 0.8% month-over-month to 70.9 in January, representing only a modest 0.4% year-over-year decline that signals continued buyer caution heading into the spring season 5
- Regional results were uneven with pending sales rising in the Midwest and West while declining in the Northeast and South on a monthly basis, reflecting varying local market conditions and weather impacts 5
- Weekly pending sales data showed more encouraging trends with 59,283 sales versus 56,693 in the same 2025 week, marking a return to positive year-over-year growth after January snowstorm impacts cleared from the data 5
INVENTORY REACHES MULTIYEAR HIGHS
- Total housing inventory hit 700,259 units with 9.38% year-over-year growth, representing multiyear peaks that are helping to contain pricing pressures as the market heads into the traditional spring selling season 5
- While inventory growth has cooled from the 33% peaks seen earlier in the cycle, the elevated levels continue to provide more options for buyers and reduce the urgency that characterized previous years 5
- New listings returned to positive territory with 60,428 new listings versus 53,861 in the same week of 2025, suggesting sellers are becoming more confident about market conditions and timing 5
FIRST-TIME HOMEBUYER DEMOGRAPHICS REMAIN STABLE
- The median age for first-time homebuyers obtaining mortgage loans in 2025 was 34 years, essentially unchanged from 2024 (33 years) and consistent with pre-pandemic levels from 2019 and 2007 9
- Average first-time buyer age was 36.2 years in 2025 compared to 36.4 years in 2024, showing remarkable stability despite affordability challenges and elevated mortgage rates throughout the period 9
- The data reflects a modest decline from 2000 when median and average ages stood at 35 and 37.9 years respectively, indicating first-time buyers are entering the market slightly younger than two decades ago 9
PRICE DYNAMICS SHIFT
- Price-cut percentages are showing negative year-over-year comparisons for the first time in an extended period, with the price-cut percentage falling to 31.90% from 33% the previous year 5
- This shift indicates improved demand conditions and reduced seller desperation, reflecting the impact of mortgage rates near multiyear lows and slightly improved buyer activity in key markets 5
MORTGAGE MARKETS
Mortgage rates held steady near 6% despite significant economic volatility including the Supreme Court tariff ruling, with favorable spreads continuing to support housing affordability. Purchase applications showed growth while Fed policy remains cautious on rate cuts, and new analysis reveals significant regulatory costs impacting borrowers.
RATES HOLD NEAR 6% DESPITE ECONOMIC VOLATILITY
- Mortgage rates ended the week at 6.04% according to Mortgage News Daily, with weekend rate lock data from Polly showing 6.26%, demonstrating remarkable stability despite the Supreme Court tariff ruling and other major economic headlines 5
- Rates showed minimal movement despite major developments including the Supreme Court striking down Trump’s sweeping tariffs and the president’s announcement of new 10% global tariffs, indicating market confidence in current pricing levels 5
- The 10-year Treasury yield also remained stable despite lower GDP numbers and 3% year-over-year inflation, suggesting bond markets are pricing in a measured Fed response to economic and policy uncertainty 5
MORTGAGE SPREADS REMAIN FAVORABLE
- Mortgage spreads continue to provide a positive backdrop for housing in 2026, closing at 1.94% versus historical ranges of 1.60%-1.80%, keeping rates lower than they would be under normal spread conditions 5
- If spreads matched 2023 peak levels, mortgage rates would be 1.20 percentage points higher at 7.21%, demonstrating the significant benefit current spread levels provide to housing affordability 5
- The normalized spreads are reducing mortgage rate volatility and allowing pricing to remain lower for longer than in previous cycles, providing stability for both lenders and borrowers amid policy uncertainty 5
PURCHASE APPLICATIONS SHOW GROWTH
- Purchase application data demonstrated 8% year-over-year growth, providing a forward-looking indicator that typically leads actual sales by 30-90 days and suggests continued market momentum 5
- Notably, 2026 has shown positive year-over-year growth in every week so far, with three weeks posting double-digit growth rates that indicate sustained buyer interest despite affordability challenges and policy volatility 5
CFPB REGULATORY COSTS IMPACT MORTGAGE BORROWERS
- The Council of Economic Advisers estimates that CFPB regulations have cost mortgage borrowers $116-$183 billion from 2011 through 2024, equivalent to $1,100-$1,700 per originated loan in higher borrowing costs 8
- The analysis found that loans subject to CFPB’s Ability-to-Repay rule carried interest rates about 16 basis points or 4.3% higher than similar loans below the regulatory threshold, demonstrating the direct cost impact of compliance requirements 8
- In 2024 alone, the combined annual cost of credit for mortgages, autos, and credit cards from CFPB regulations was estimated at $24-$38 billion, significantly exceeding the Bureau’s reported $21 billion returned to consumers 8
FED POLICY PATH REMAINS CAUTIOUS
- Federal Reserve officials are signaling a cautious approach to rate cuts, with market pricing implying a 90%+ probability that the Fed will leave its benchmark rate unchanged at the March meeting 7
- Traders have pushed back expectations for the first cut toward mid-2026 as inflation data came in slightly above economists’ forecasts, extending the timeline for potential mortgage rate relief 7
REGULATORY & POLICY DEVELOPMENTS
Major regulatory developments included the Supreme Court striking down Trump’s sweeping tariffs in a landmark ruling, followed by the president’s announcement of new tariff measures. Additional developments included a federal court upholding FinCEN’s anti-money laundering rule and advancing legislation for GSE reform.
SUPREME COURT STRIKES DOWN TRUMP’S SWEEPING TARIFFS
- The Supreme Court delivered a major blow to President Trump’s economic agenda in a 6-3 decision ruling that he lacks authority under the International Emergency Economic Powers Act (IEEPA) to impose sweeping global tariffs 1 2
- Chief Justice John Roberts, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson, emphasized that “the power to tax, including the imposition of tariffs, resides with Congress, not the President” in striking down the “Liberation Day” and “Reciprocal” tariffs 1 10
- The ruling potentially triggers over $70 billion in refunds to businesses that paid the illegal tariffs, with the Tax Foundation estimating more than $160 billion was illegally collected under IEEPA since early 2025 1 11
TRUMP ANNOUNCES NEW TARIFF MEASURES
- Following the Supreme Court ruling, President Trump signed an executive order Friday evening imposing a new 10% tariff on nearly all imports to the United States, effective February 24, 2026 3
- The new tariffs include exceptions for critical minerals, beef and fruits, cars, pharmaceuticals, and products from Canada or Mexico, representing a more targeted approach than the struck-down global levies 3
- Trump called the Supreme Court ruling “deeply disappointing” and said he was “ashamed” of the justices who ruled against his trade policies, including two he nominated, Neil Gorsuch and Amy Coney Barrett 12 3
HOUSING INDUSTRY RESPONDS TO TARIFF DEVELOPMENTS
- National Association of Home Builders 2026 board chair Bill Owens noted that “Trump still has wide latitude in setting tariff policy” despite the Supreme Court ruling and urged exemptions for building materials amid the housing affordability crisis 13
- The tariffs have impacted home construction costs and contributed to the Federal Reserve’s hesitancy to lower short-term interest rates in the first half of 2025, with NAHB urging the president to exempt building materials from tariff strategy 13
FINCEN ANTI-MONEY LAUNDERING RULE UPHELD
- A U.S. District Court judge in Jacksonville, Florida, upheld FinCEN’s Anti-Money Laundering Regulations for Residential Real Estate Transfers Rule, rejecting Fidelity National Financial’s comprehensive legal challenge 6
- Judge Berger agreed with FinCEN’s argument that the rule “was statutorily authorized by the Bank Secrecy Act” and resulted from “reasoned decision-making,” dismissing industry concerns about regulatory overreach 6
- The rule requires title firms to report specific details on all-cash home purchase transactions and is now scheduled to take effect March 1, 2026, after being postponed from December 2025 6
FANNIE MAE AND FREDDIE MAC IPO LEGISLATION ADVANCES
- The Trump administration’s plans to take Fannie Mae and Freddie Mac public are moving forward, with GOP Rep. Scott Fitzgerald of Wisconsin announcing legislation to end the conservatorships “in the coming weeks” 14
- The legislation will work “by codifying many of the reforms that have been accomplished the past few years, in particular encouraging more credit risk transfers” to reduce taxpayer exposure to GSE losses 14
- Federal Housing Finance Agency Director Bill Pulte suggested the IPO could be the “largest in history,” indicating the significant scale and market impact of returning the GSEs to private ownership 14
CFPB COST ANALYSIS REVEALS SIGNIFICANT CONSUMER BURDEN
- The Council of Economic Advisers released a comprehensive analysis estimating that the Consumer Financial Protection Bureau has cost consumers between $237-$369 billion since its inception in 2011, including fiscal costs, increased borrowing expenses, and reduced originations 8
- The analysis found that CFPB regulations have increased consumer borrowing costs by $222-$350 billion from 2011 through 2024, with mortgage borrowers bearing $116-$183 billion of this burden through higher interest rates and fees 8
- Annual paperwork burden from CFPB rules exceeds 29 million hours, equivalent to 14,100 full-time employees spending all their time on documentation and reporting requirements at a cost of $2.5 billion annually 8
ECONOMIC NEWS
Economic data painted a mixed picture with disappointing GDP growth complicating Fed policy decisions, while the Supreme Court tariff ruling created significant policy uncertainty. Consumer debt stress showed diverging patterns across loan types with particular concerns in credit cards and student loans.
SUPREME COURT TARIFF RULING CREATES ECONOMIC UNCERTAINTY
- The Supreme Court’s 6-3 decision striking down Trump’s IEEPA tariffs eliminates an estimated $1.4 trillion in tariff revenue over the next decade, fundamentally altering the administration’s fiscal and trade policy calculations 1
- The ruling could save consumers in the long run, as collections from Trump’s tariffs were estimated to cost U.S. households around $1,300 per year in 2026, according to Tax Foundation analysis 11
- Trump’s immediate response with new 10% global tariffs under different legal authority creates ongoing uncertainty for businesses and consumers planning major purchases, including homes 3
GDP GROWTH DISAPPOINTS, COMPLICATES FED PATH
- Fourth-quarter U.S. GDP growth came in at an annualized 1.4%, badly missing forecasts that ranged as high as 2.9% and marking a sharp slowdown from the third quarter’s robust 4.4% pace 15
- The Bureau of Economic Analysis attributed the deceleration to “downturns in government spending and exports and a deceleration in consumer spending that were partly offset by an acceleration in investment” 15
- The weak GDP print complicates expectations around the Federal Reserve’s next move and extends the wait for mortgage professionals hoping for decisive rate cuts that would stimulate housing demand 15
INFLATION DATA SUPPORTS RATE HOLD
- The Fed’s preferred inflation gauge held steady, with rate futures indicating a mid-90% chance that the Fed will leave its benchmark rate unchanged at the March meeting as policymakers assess economic conditions 7
- The inflation data arrived alongside a modest 0.3% gain in personal income and a 0.4% increase in consumer spending, with the personal saving rate holding steady at 3.6% 7
BUSINESS ACTIVITY SLOWS
- The S&P Global US Flash PMI indicated the slowest business growth for ten months in February, with the Flash US Composite PMI Output Index falling to 52.3 from January’s 53.0 reading 16
- Companies cited high prices, stretched affordability, tariffs, and subdued confidence among customers as key factors dampening business activity and investment decisions 16
CONSUMER DEBT STRESS SHOWS DIVERGING PATTERNS
- Overall household debt delinquency reached 4.8% at the end of 2025, up 0.3 percentage points from Q3 and 1.2% higher than year-end 2024, reflecting normalization from pandemic-era suppressed levels 17
- Credit card delinquencies showed concerning trends with 7.1% of balances transitioning into serious delinquency over the past year, comparable to levels observed during the early stages of the Great Recession 17
- Student loan delinquencies surged dramatically with 16.2% of balances becoming seriously delinquent over the past year by Q4 2025, reflecting the re-entering of delinquent balances into credit reports after a nearly 5-year pandemic pause 17
- Mortgage delinquency transitions remained relatively stable at 1.4% annually, though deterioration is concentrated among borrowers in lower-income zip codes where serious mortgage delinquency rates have reached roughly 3.0% by late 2025 17
COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)
DISTRESS & SERVICING
- Multifamily Delinquencies Hit Multi-Year Highs CRED iQ data shows multifamily loan delinquencies surged to 1.37% in Q3 2025 from 0.40% in Q3 2023, with serious delinquencies (90+ days) comprising $7.1B of stressed loans and loss rates doubling to $911M from $504M year-over-year. 1
- $77B CMBS Maturity Wall Approaches Trepp research identifies $76.6B in commercial mortgage-backed securities facing hard maturities in 2026 with no remaining extension options, marking the largest concentration of distressed debt since the post-financial crisis period. 2
CAPITAL MARKETS
- BlackRock Launches Industrial REIT Asset manager files SEC registration for HPS Net Lease Income REIT targeting stabilized industrial properties with long-term leases, following acquisition of ElmTree Funds and HPS Investment Partners with $10.5B across 257 properties including Amazon’s Tulsa fulfillment center. 3
- Blackstone Secures $1.2B Industrial CMBS Wells Fargo and Goldman Sachs co-originate financing for 61-property, 7.4M SF portfolio concentrated in Los Angeles, Inland Empire, and New Jersey markets, marking third refinancing of same assets in four years with Home Depot renewal showing 132% rent increase. 3
- Fitch Assigns AAA Rating to ACORE 2026-FL1 Rating agency provides $638M class A notes with ‘AAAsf’ stable outlook, backed by 22 loans secured by 45 commercial properties with $1.1B aggregate principal balance, serviced by Trimont LLC. 7
TRANSACTIONS & VOLUMES
- 29th Street Capital Acquires DC Metro Portfolio Chicago-based firm purchases 1,225-unit Apollo portfolio across three Class A properties in Prince George’s County, Maryland, betting on long-term federal employment stability despite recent government job cuts and funding uncertainty. 5
- Arker Companies Takes Over Park Hill Complex Brooklyn-based developer and partners L+M Development and LIHC Investment Group acquire eight-building, $364.7M Staten Island apartment complex from DelShah Capital, planning $165M renovation over next two years. 2
CONSTRUCTION & PIPELINE
- Multifamily Starts Hit 2025 Peak December housing starts for buildings with 5+ units reached 402,000 annualized rate, up 10.1% month-over-month despite being 1% below December 2024 levels, while project completions fell 15.9% year-over-year to 483,000 units. 4
- Construction Pipeline Shows Caution Under-construction multifamily units totaled 670,000 at year-end, down 12.9% from prior year, with KPMG economist warning of persistent weakness in residential investment amid rising costs and tariff pressures. 4
PRICING & FUNDAMENTALS
- Office REITs Face AI-Driven Selloff SL Green, Vornado, and BXP report sharp stock declines despite strong leasing activity, with tenant improvement packages 69% higher than pre-pandemic levels and effective rents 18% below 2020 levels adjusted for inflation. 6
- Industrial Net Lease Market Expands Sector now comprises 53% of $58B annual net lease market, up from 29% in 2015, driven by e-commerce growth projected to reach $1.5T by 2028 and over $3T in US manufacturing investment expected by 2030. 3
INDUSTRY NEWS
Industry developments included continued structured finance activity with new RMBS transactions, emerging stress in student loan markets, and implementation of new homebuyer privacy protections.
STRUCTURED FINANCE ACTIVITY CONTINUES
- Fitch Ratings assigned expected ratings to multiple residential mortgage-backed securities transactions, including MFA 2026-NQM1 Trust backed by 572 nonprime loans totaling $344.7 million 18
- Aspire Mortgage Trust 2026-1 also received ratings, supported by 752 non-QM loans worth approximately $391.28 million, demonstrating continued investor appetite for alternative mortgage products 18
- The continued securitization activity indicates ongoing capital markets support for mortgage origination, particularly in the non-qualified mortgage space that serves borrowers outside traditional lending parameters 18
STUDENT LOAN MARKET SHOWS STRESS
- Fitch reported that U.S. Federal Family Education Loan Program (FFELP) ABS defaults increased slightly in Q4 2025 after hitting their lowest level in Q3 2025, indicating renewed stress in the student loan market 19
- Private student loan performance diverged significantly, with traditional PSL delinquencies improving while refinance PSL delinquencies continued rising to new highs, reflecting different borrower profiles and economic pressures 19
- Fitch expects FFELP ABS defaults to remain elevated versus pre-pandemic levels through 2026, which could impact household debt-to-income ratios and mortgage qualification rates for younger borrowers 19
HOMEBUYER PRIVACY PROTECTION ACT TAKES EFFECT
- The Homebuyers Privacy Protection Act, championed by the National Association of Mortgage Brokers since 2018, will take effect March 5, 2026, representing a significant victory after seven years of advocacy efforts 20
- The legislation amends the Fair Credit Reporting Act to prohibit consumer reporting agencies from furnishing trigger leads to third parties except in limited circumstances, protecting homebuyer privacy during the mortgage application process 20