Daily Dose of Real Estate for March 12

The February CPI report landed squarely on expectations — 2.4% headline, 2.5% core — delivering the lowest core reading in nearly five years and the smallest monthly rent increase since January 2021 (shelter costs coming down). The report captures a pre-war economy and does not reflect the oil shock that has since pushed Brent crude above $100 a barrel at times and sent the 10-year Treasury yield to 4.21%. Mortgage rates, popped back up which had after weeks below 6% – jumping 15 basis points in a single session to 6.24%. The Fed meets March 17–18, will almost certainly hold at 3.50%–3.75%. Markets are pricing the next cut for September.

On the housing side, existing-home sales ticked up 1.7% in February to a 4.09 million annual pace, affordability improved for the eighth consecutive month, and single-family supply hit its highest February reading in nine years. But demand remains frozen at levels that have persisted since 2022. AEI’s Housing Finance Watch reports home price appreciation approaching record lows in its 13-year tracking history, with real (inflation-adjusted) appreciation already negative. Realtor.com’s latest supply gap analysis puts the national housing deficit above 4 million homes. The market is slowly rebalancing, but “slowly” is doing a lot of work in that sentence.

In commercial real estate, CMBS delinquent loan volume posted its largest monthly decline since 2022, though office distress remains near record levels with $25 billion in loans past maturity. CRE debt markets are described as “funded but selective” — capital is available, but conviction is uneven.

In industry news, the Rocket-Compass strategic alliance is the headline, bundling home search, brokerage, and mortgage into one integrated platform with financial incentives for buyers. Whether it reshapes the transaction experience or simply reshuffles market share remains to be seen.

Let’s get you caught up and out the door in three minutes. Tim 

KEY TAKEAWAYS

• February CPI holds at 2.4% year-over-year, matching expectations. Core CPI rose 0.2% monthly and 2.5% annually — the lowest core reading in nearly five years. Shelter gains slowed, with rent up just 0.1%, the smallest monthly increase since January 2021.
• Mortgage rates jump sharply on Iran conflict fallout. The Mortgage News Daily 30-year fixed rate rose 15 bps to 6.24% as the 10-year Treasury surged to 4.16% amid oil-driven inflation fears, reversing weeks of sub-6% readings.
• Existing-home sales rose 1.7% in February to a 4.09M annual pace (NAR). Affordability improved for the eighth straight month, but sales remain 1.4% below year-ago levels. Single-family home supply jumped to 3.8 months — the highest for February in nine years.
• Housing supply gap surpasses 4 million homes. Realtor.com’s 2026 Housing Supply Gap Report estimates the deficit widened to 4.03 million units in 2025, as starts fell short of household formation for another year.
• AEI Housing Finance Watch: Home price appreciation slowing to near-record lows. Preliminary YoY HPA was 1.5% in January 2026, projected at 1.4%–1.6% for Feb–March — among the lowest readings since AEI began tracking in 2013. Inflation-adjusted HPA is negative at -0.9%.
• Fed widely expected to hold rates at 3.50%–3.75% at March 17–18 meeting. CME FedWatch shows 92%+ probability of no change. Updated dot plot and economic projections will be released.
• 10-Year Treasury surges to 4.16%–4.21% on oil-driven inflation fears. Brent crude spiked above $100/bbl amid the U.S.-Iran conflict and Strait of Hormuz disruption, sending bond yields sharply higher and threatening the mortgage rate outlook.
• Cotality: National home price appreciation slows to 0.7% YoY in January. A “two-speed” market has emerged — Midwest and Northeast outperforming while Florida, Colorado, and Utah post price declines.
• CMBS delinquency volume drops 5.18% in February, largest decline since 2022. Office CMBS delinquencies remain near record highs at 11.2%, but overall delinquent loan balances fell to $42.76 billion.
• Rocket Companies and Compass announce three-year strategic alliance. Compass off-MLS listings will appear on Redfin; Rocket Mortgage will offer preferred pricing (1-point rate buy-down or $6,000 credit) to Compass clients.

RESIDENTIAL REAL ESTATE MARKETS

• NAR: Existing-Home Sales Rise 1.7% in February to 4.09M Annual Rate. The median existing-home price was $398,000. NAR’s Housing Affordability Index rose to 117.6 — the highest since March 2022 and the eighth consecutive monthly improvement. Sales remain 1.4% below year-ago levels, with Lawrence Yun noting there are more than 6 million more jobs than in 2019 yet home sales per year are down by one million. HousingWire
• Wolf Street: Single-Family Home Supply Surges to Highest for February in 9 Years; Demand Stuck in Deepfreeze. Single-family supply jumped to 3.8 months in February — the highest for the month since 2017 — while sales remained at the depressed levels that began in 2022 (SAAR of 3.73M single-family). The national median single-family price edged up just 0.2% YoY, effectively flat for three consecutive months. Condo sales plunged 5.3% month-over-month and 5.3% YoY to a near-record low of 360,000 SAAR. Wolf Street
• Cotality Home Price Insights: National Appreciation Slows to 0.7% YoY in January. The Midwest leads with 3.56% average annual growth (Illinois +4.91%, Wisconsin +4.78%). Eleven jurisdictions posted negative annual price growth, led by Florida (-2.36%), Colorado (-1.31%), and Utah (-1.11%). Chief Economist Selma Hepp described a “two-speed” market with high-cost Sunbelt regions correcting while affordable regions remain resilient. Cotality
• AEI Housing Finance Watch (Week 10): Home Price Appreciation Approaching Record Lows. Preliminary YoY HPA was 1.5% in January 2026, projected at 1.4% and 1.6% for February and March respectively — among the lowest readings since AEI began tracking in 2013 and likely negative in real (inflation-adjusted) terms at -0.9%. The slowdown reflects subdued purchase activity, relatively high rates and inventory, and a diminishing pool of well-qualified entry-level buyers. Active listings are up 7% YoY and essentially back to 2020 levels. AEI Housing Center
• Realtor.com: U.S. Housing Supply Gap Widens to 4.03 Million Homes. Household formation (1.41M) outpaced housing starts (1.36M) in 2025 for another year. Chief Economist Danielle Hale said it would take roughly seven years to eliminate the deficit even under an optimistic building scenario. Reuters/Realtor.com
• HousingWire: Housing Market Poised for Growth if Iran Conflict Doesn’t Push Rates Higher. Analyst Logan Mohtashami notes purchase applications have been positive year-over-year every week in 2026 and pending sales data has turned positive. The key risk: if the 10-year yield moves above 4.30%, mortgage rates could breach 6.25% and stall progress. HousingWire
• ATTOM: Single-Family Rental Yields Declining in 55% of Counties. Record-high home prices ($360K national median in 2025) are compressing investor returns even as rents outpace home prices in 55% of analyzed markets. Midwest counties (St. Clair, IL at 14.5%; Mobile, AL at 13.6%) offer the strongest yields. ATTOM

MORTGAGE MARKETS

• Mortgage News Daily: 30-Year Fixed Rate Jumps to 6.24%. Rates rose 15 basis points on the day as MBS weakened sharply. The 15-year fixed climbed to 5.69%. The move reversed weeks of sub-6% readings as the 10-year Treasury yield surged to 4.16% on oil-driven inflation fears from the Iran conflict. Mortgage News Daily
• AEI: Median Purchase Rate Effectively Unchanged at 5.99% in Week 10. Purchase rate lock volume remains muted, down 39% from the same week in 2020 but up 6% YoY. No-cash-out refinance rate lock volume surged 157% YoY, reflecting a mini-boom as borrowers respond to modest rate declines. Cash-out refinance volume remains deeply depressed, down 79% from 2020 levels. AEI Housing Center
• Freddie Mac Weekly Survey: 30-Year Fixed Averaged 6.0% for the Week Ending March 5. Rates rose 2 bps week-over-week but remain near three-year lows. Both Fannie Mae and MBA forecast the 30-year rate near 6.0%–6.10% through year-end 2026. The Mortgage Reports
• Refinance Activity at Highest Level in Over Three Years. MBA data shows refinance applications up 109% year-over-year. Refinancing accounted for nearly 40% of total mortgage origination volume in Q4 2025 — the highest share since early 2022 — as millions of borrowers who locked rates above 7% in 2023–2024 take advantage of lower rates. CBS News/MBA
• Pennymac to Acquire Cenlar Subservicing for $257.5M. The all-cash deal will add up to $740 billion in UPB and 2 million loans, making Pennymac the second-largest mortgage servicer overall. Cenlar will surrender its bank charter. Expected to close in H2 2026. HousingWire

REGULATORY & POLICY DEVELOPMENTS

• Fed Widely Expected to Hold Rates Steady at March 17–18 FOMC Meeting. CME FedWatch pricing shows a 92%+ probability of no change to the 3.50%–3.75% target range. The meeting will include updated economic projections and the dot plot — the first opportunity for the Committee to formally incorporate the Iran conflict and 15% global tariffs into its forward guidance. Two FOMC members (Miran, Waller) dissented at the January meeting, preferring a 25 bps cut. Federal Reserve
• Bipartisan Homes for American Families Act Introduced in Senate. Sens. Hawley (R-MO) and Merkley (D-OR) would amend the Sherman Antitrust Act to bar investment funds with over $150M in assets from buying single-family homes, condominiums, or townhouses. The companion HOPE for Homeownership Act would use tax changes to push institutional investors to divest existing SFR holdings. The bills lack a precise statutory definition of “large institutional investor.” Treasury Secretary Bessent is separately developing definitions under Trump’s January executive order. Multifamily Dive
• Brookings Analyzes Ripple Effects of Proposed SFR Investor Ban. A new analysis finds that while institutional investors modestly increased home prices in concentrated geographies, they also lowered rents. Banning purchases could reduce future rental supply and put upward pressure on owner-occupied home prices — effects policymakers should weigh carefully. Brookings
• BLS Notes CPI Data Affected by 2025 Government Shutdown. Economists flagged that December 2025 through April 2026 inflation readings are affected by data collection interruptions during last fall’s 43-day shutdown. BLS used carry-forward methodology for the missing October CPI report and gaps in November data, likely imparting a downward bias on inflation figures until fresh data replaces the estimates this spring. Fox Business

ECONOMIC NEWS

• BLS: February CPI Rose 0.3% Monthly, 2.4% Year-Over-Year — In Line With Expectations. Core CPI (ex-food and energy) rose 0.2% monthly and 2.5% annually, the lowest core annual reading in nearly five years. Shelter rose 0.2%, with rent of primary residence up just 0.1% — the smallest monthly rent increase since January 2021. Food rose 0.4% (3.1% YoY); energy rose 0.6%. Apparel jumped 1.3%, the biggest monthly gain since September 2018, flagging tariff sensitivity. BLS
• Economists Warn February CPI Is “Calm Before the Storm.” The report predates the Iran-related oil price surge. Capital Economics estimates a severe-but-short conflict could push CPI to 3.5% by year-end, with gasoline near $5/gallon in Q2. Morgan Stanley’s Ellen Zentner noted that oil-price uncertainty translates to a Fed that will remain cautious about cutting rates. CNBC
• 10-Year Treasury Yield Surges to 4.16%–4.21% on Oil-Driven Inflation Angst. Bond yields have risen sharply since the onset of the U.S.-Iran conflict on February 28. Brent crude traded above $100/bbl; WTI reached as high as $119 in overnight trading before pulling back. The Strait of Hormuz remains effectively closed, disrupting roughly 20% of global petroleum flow. CNBC
• ISM Manufacturing PMI: Prices Paid Surge to 70.5, Highest Since June 2022. While the headline manufacturing index eased slightly to 52.4 in February, the prices paid component soared 11.5 points — signaling significant cost pressures at the factory level ahead of the oil price shock. CNBC/ISM
• Markets Pricing Next Fed Cut for September; ~43% Chance of Second Cut Before Year-End. The February CPI report reinforces expectations the Fed will hold steady in March. The upcoming dot plot release on March 18 will be closely watched for any shift in the median rate-cut projection from one cut to two — or zero. CME FedWatch/CNBC

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

• CMBS Delinquent Loan Volume Drops 5.18% in February — Largest Decline Since 2022. Total CMBS loans 30+ days delinquent fell to $42.76 billion, per Trepp. The overall CMBS delinquency rate declined to 7.14%. Office delinquency fell 114 bps to 11.20%, still well above historical norms, while multifamily dipped 9 bps to 6.85%. Retail dropped 74 bps to 6.30%. CRE Direct/Trepp
• Office CMBS Delinquency Hit Record 12.34% in January Before Retreating. The spike was driven by maturity defaults — borrowers current on interest but unable to refinance. Close to $25 billion in CMBS loans are past maturity without resolution, according to Trepp. More than half of the estimated $100B in securitized commercial mortgages due in 2026 are unlikely to pay off at maturity, per Morningstar DBRS. The Real Deal/WSJ
• CRE Debt Markets “Funded But Selective” in 2026. Life insurance companies are increasing allocations and seeking to deploy capital; spreads for low-leverage multifamily and industrial assets have tightened to 115–125 bps. Banks remain competitive for stabilized assets. However, underwriting discipline persists, with lenders cautious on maturity extensions where asset performance is uncertain. Northmarq
• Manhattan Office: Availability Rate Rises for First Time in Two Years. Despite notable leasing activity — Latham & Watkins expanded 131K SF at 1285 Sixth Avenue, Snowflake signed 83K SF at 7 Times Square — Manhattan’s office availability rate ticked up for the first time since 2024. Amazon announced plans to reduce its office footprint by millions of square feet. Commercial Observer/Bisnow
• Retail Closures Accelerating in H1 2026, but Space Being Absorbed. CoStar forecasts store closures will increase in the first half of 2026 as a bifurcated retail sales environment pushes weaker tenants to cut locations. Saks Fifth Avenue, Eddie Bauer, GameStop, and Francesca’s are among those shedding stores. However, local CRE executives say space is being absorbed nearly as fast as it becomes available. Business Observer/CoStar

INDUSTRY NEWS

• Rocket Companies and Compass Form Three-Year Strategic Alliance. Compass off-MLS “Private Exclusive” and “Coming Soon” listings will be syndicated exclusively to Redfin, potentially adding 500,000+ listings to the platform. Rocket Mortgage will offer buyers a 1-percentage-point rate reduction in Year 1 or up to $6,000 in lender credits. The deal integrates home search, brokerage, and mortgage into one platform — what analysts have called the “holy grail of real estate.” Rocket Companies/PR Newswire
• Rocket Companies Reports Strong Q4 2025 Results. Revenue reached $2.69 billion, up roughly 40% year-over-year and above estimates. Adjusted EPS was $0.11 vs. $0.09 expected. CFO Brian Brown was promoted to President effective February 26, 2026. Rocket Companies IR

Daily Dose of Real Estate is provided for informational purposes only. Nothing herein constitutes investment, legal, or tax advice.