The U.S. housing market spent another month doing very little. Existing-home sales reached a 4.02 million annualized pace in April, the median price rose 0.9% to $417,700, and inventory climbed to 4.4 months of supply – the highest April reading since 2016 and a level Wolf Street more bluntly described as a three-and-a-half-year deepfreeze. Mortgage rates per Mortgage News Daily sit at 6.42% on the 30-year fixed, the Federal Reserve’s May Financial Stability Report still has residential price-to-rent ratios in the upper end of their historical range, and the FHA and VA loan books are starting to show the early-payment delinquency pattern that tends to precede broader stress. Affordability has improved on the margin, which NAR’s Lawrence Yun credits for the sales bump, though the same release notes record stocks and historically low consumer confidence sitting side by side without comment (try to square that circle).
The policy and macro backdrop is doing most of the work. AAA’s national gas average near $4.50, the Strait of Hormuz shut, and the Iran conflict unresolved (potentially worsening), the White House and Energy Secretary Chris Wright are now floating a pause on the federal motor fuels taxes — most likely via emergency executive action despite the well-established legal view that no such authority exists. CNBC’s read is that the Fed is “running out of reasons to cut” with inflation above 3% and payrolls stabilizing at 115,000; Goldman has pushed its last two expected cuts into 2027, and half of sell-side forecasters now see no cut this year. Retailers added jobs in April while Whirlpool flagged a “recession-level industry decline,” McDonald’s said consumer spending “may be getting a little bit worse” (keep your burger out of my hot tub), and University of Michigan sentiment hit another record low. Blackstone is undaunted and launched a builder-finance platform aimed at 50,000 homes a year.
Let’s get you caught up and out the door in 3 minutes. Tim
KEY TAKEAWAYS
- Existing-home sales edged up 0.2% in April to a 4.02M SAAR, but Wolf Street’s read of the same data emphasized that single-family supply rose to 4.4 months — the highest for any April since 2016 — with sales still in a multi-year “deepfreeze.” NAR | Wolf Street
- The Fed’s May 2026 Financial Stability Report flagged residential real estate valuations as remaining elevated relative to fundamentals, with house price-to-rent ratios still in the upper range of their historical distribution. Federal Reserve
- A federal gas tax holiday is back on the table as AAA’s national average hovers near $4.50, the Strait of Hormuz remains shut, and the White House and Energy Secretary Chris Wright float a pause on the 18-cent gasoline and 24-cent diesel federal motor fuels taxes. An emergency-powers executive action is the likeliest path at 55–65% probability, despite the absence of clear statutory authority.
- CNBC argued the Fed is “running out of reasons to cut” with inflation above 3% and the labor market stabilizing, citing Goldman’s revision pushing its last two expected cuts to December 2026 and March 2027 and noting half of sell-side forecasters now see no cut this year. CNBC
- NEC Director Kevin Hassett discussed the Iran war’s economic impact, the Trump-Xi summit, Fed chair nominee Kevin Warsh, and the rate outlook in a Monday Squawk Box interview. CNBC
- Retailer hiring surged in the April jobs report even as consumer warning signs flashed — Whirlpool cited a “recession-level industry decline” from the Iran war, McDonald’s CEO said spending “may be getting a little bit worse,” and University of Michigan consumer sentiment hit another record low. CNBC
- Urban Institute and JPMorganChase Institute flagged BNPL as a growing blind spot for mortgage underwriting, with U.S. BNPL spending up 37-fold from $2 billion in 2019 to $75 billion in 2023 while most loans go unreported to credit bureaus. Urban Institute
- Blackstone launched a homebuilder lending platform through BREDS aimed at financing construction of more than 50,000 for-sale homes annually, anchored by portfolio company Brio Homebuilder Solutions. Bloomberg
- Office absorption turned positive for the first time since 2019, with Class A buildings absorbing 17.74M SF in H2 2025 even as national office vacancy hit a record 21% in Q1 2026. CRE Daily
- S3 Capital closed a $1.3B multifamily lending fund; Americold and EQT formed a $1.3B cold storage joint venture; NYC’s Rent Guidelines Board opened its preliminary 2026 range at 0% on the low end.
RESIDENTIAL REAL ESTATE MARKETS
- Existing-home sales rose 0.2% in April to a 4.02M annualized pace, flat year-over-year, with the median price at $417,700 (+0.9% YoY). Inventory climbed 5.8% month-over-month to 1.47M units, equating to 4.4 months of supply. NAR
- Wolf Street’s read of the same data emphasized the supply story over the headline: single-family supply at 4.4 months is the highest for any April since 2016, single-family SAAR sits at 3.64M near the bottom of a three-and-a-half-year deepfreeze range, and condo supply (after NAR revisions) hit 6.0 months in March — the highest for that month since 2012. Cities including Oakland (-25%), Austin (-24%), and New Orleans (-20%) have seen single-family prices fall significantly from mid-2022 peaks, while New York City (+5.3%), Chicago (+3.9%), and Milwaukee (+3.7%) continued to post YoY gains. Wolf Street
- Regional sales were mixed: the Midwest rose 2.2% and the South 0.5%, the Northeast was unchanged, and the West fell 2.6%. Regional medians spanned $324,500 in the Midwest to $619,600 in the West. NAR
- First-time buyers accounted for 33% of April transactions, all-cash 25%, and individual investors or second-home buyers 16%. Median time on market shortened to 32 days from 41 in March, though it remained slower than the 29 days in April 2025. NAR
- NAR Chief Economist Lawrence Yun attributed the modest gain to improving affordability, with the Housing Affordability Index at 110.6 versus 101.4 a year earlier — even as he flagged “mixed macroeconomic signals” including record stocks and weak consumer confidence. NAR
- HousingWire’s coverage of the April release highlighted that the inventory build is bringing more sellers to market without yet generating offsetting buyer pull-through, with the year-over-year price gain narrowing to under one percent. HousingWire
MORTGAGE MARKETS
- MND’s 30-year fixed conforming rate stands at 6.42%, with the 15-year at 5.99%, the jumbo 30-year at 6.59%, the 7/6 SOFR ARM at 6.27%, FHA 30-year at 5.93%, and VA 30-year at 5.95%. Mortgage News Daily
- The Fed’s May 2026 Financial Stability Report noted overall mortgage delinquency rates remain low by historical standards, supported by large home equity cushions and tight underwriting. The Fed flagged emerging distress among recent low-down-payment borrowers — particularly FHA and VA loans, where early payment delinquencies for near- and subprime borrowers sit somewhat above the historical median. Federal Reserve
- CNBC argued the Fed is “running out of reasons to cut” rates with the April payrolls print of 115,000 reinforcing labor market stability while inflation sits north of 3%. Goldman Sachs pushed its last two expected cuts to December 2026 and March 2027, and half of sell-side forecasters now see no cut this year. The piece flagged the politically charged dynamic awaiting incoming Fed Chair Kevin Warsh, who has signaled a preference for lower rates and a balance-sheet-led approach. CNBC
REGULATORY & POLICY DEVELOPMENTS
- Pressure at the pump. AAA’s national average is hovering around $4.50 this morning. The Iran conflict remains unresolved, the Strait of Hormuz is shut, and President Trump has signaled potential re-escalation. Crude has held lower than feared thanks to softer Chinese buying, stronger U.S. export flows, and historic reserve releases, but the cushion is thinning. With retail prices now in the “Abrasive” band of the Gas Price Anxiety Index, the White House and Energy Secretary Chris Wright are starting to float a pause on the federal motor fuels taxes (roughly 18 cents on gasoline, 24 cents on diesel). State-level Republicans have already endorsed month-long to quarter-long holidays.
- Three viable paths, ranked by probability:
- 55–65% — Emergency-powers executive action. The likeliest channel despite a long bipartisan track record of legal counsel concluding that no statutory authority exists for the executive branch to waive the tax unilaterally (the Biden team reached the same conclusion during the pandemic). Two predicates would need to hold: a formal declaration that the Iran war constitutes a national emergency, and a willingness to stretch executive authority beyond prior precedent. The administration’s prior moves (first-term payroll tax deferral, IEEPA-based tariffs on dozens of countries) suggest the appetite is there.
- 30–40% — Standalone bipartisan legislation clearing the 60-vote threshold. A real but difficult path. Democratic offices are divided, with reactions ranging from outright skepticism to grudging acknowledgment that they may have no choice. Any floor process would invite a punishing markup with amendments on War Powers, AUMFs, and other provisions engineered to assign blame for elevated prices to the President and his conference. With early voting opening in September and voter frustration compounding, the politics could shift, but cross-aisle movement before the June work period looks improbable.
- 5% or less — Inclusion in the Senate’s pending reconciliation package. Largely foreclosed. The FY26 Budget Resolution contains no reconciliation instructions for Ways and Means or Senate Finance, so any tax language would trigger a Point of Order and need 60 votes anyway. Democratic cooperation on a vehicle financing ICE, DHS, and $1 billion toward the President’s ballroom is not on offer. The small residual probability accounts for the unprecedented scenario in which Leadership negotiates a workaround with the Parliamentarian, potentially surfaced through a Managers Amendment ahead of vote-a-rama if Thune brings the bill to the floor before Memorial Day.
- The Federal Reserve published its May 2026 Financial Stability Report on May 8, finding vulnerabilities largely steady since the November 2025 edition. Asset valuations remained elevated, with the report singling out residential real estate price-to-rent ratios as still in the upper range of their historical distribution and CRE prices continuing to stabilize after the 2022–2024 declines. A large volume of CRE debt is scheduled to mature over the coming year, with refinancing risk particularly concentrated in the non-agency CMBS market. Federal Reserve
- Survey respondents in the Fed’s spring 2026 Salient Risks survey cited geopolitical risks (75%), an oil shock (70%), AI-related risks (50%), persistent inflation (50%), and private credit (45%) as the most-cited shocks over the next 12–18 months — a marked rotation from the fall 2025 survey, when policy uncertainty sat at the top. The shift reflects the outbreak of the U.S.-Iran conflict and its energy-supply implications. Federal Reserve
ECONOMIC NEWS
- Retailers added meaningful payrolls in the April jobs report even as consumer-side warning signs accumulated. Whirlpool cited a “recession-level industry decline” in the U.S. as the Iran war battered consumer confidence; McDonald’s CEO Chris Kempczinski told analysts consumer spending “may be getting a little bit worse”; and University of Michigan consumer sentiment posted another record low, driven by gasoline prices at multiyear highs. CNBC
- NEC Director Kevin Hassett discussed the Iran war’s economic impact, the upcoming Trump-Xi summit, Fed chair nominee Kevin Warsh, the Fed’s rate outlook, and inflation on CNBC’s Squawk Box Monday morning. CNBC
- Urban Institute, in research coauthored with the JPMorganChase Institute, flagged buy-now-pay-later as a growing underwriting blind spot for mortgage credit. U.S. BNPL spending grew 37-fold from $2 billion in 2019 to $75 billion in 2023, yet most BNPL loans do not require a hard credit pull and are not consistently reported to credit bureaus — meaning they bypass traditional DTI and credit-score checks even as they show up in borrowers’ cash flow. The research ties to HUD’s 2025 request for information on how BNPL lending affects housing stability. Urban Institute
- The Fed’s May 2026 Financial Stability Report observed that total business and household debt as a share of GDP continued to fall to levels not seen since the early 2000s, with household balance sheets still solid in aggregate. Auto and credit card delinquencies remained elevated relative to the past decade. Federal Reserve
- The Housing Affordability Index sat at 110.6 in April versus 101.4 a year earlier, the clearest macro tailwind cited by NAR’s Yun for the modest sales uptick. NAR
- The economic calendar fills in mid-week with CPI, retail sales, and additional Fed commentary against a backdrop of inflation above 3%, multiyear-high gasoline prices, and the ongoing Iran conflict.
COMMERCIAL REAL ESTATE
- U.S. office posted its first annual net absorption gain since 2019, with Class A buildings absorbing 17.74M SF in H2 2025 against -10.6M SF for Class B. National vacancy nonetheless hit a record 21% in Q1 2026, per Lee & Associates. CRE Daily
- Manhattan office leasing reached 42M SF in 2025 — with 10M SF in Q4 alone — pushing availability to a five-year low of 13.9%. Houston added 2.44M SF of annual absorption and Phoenix 816,000 SF. CRE Daily
- The Fed’s May 2026 Financial Stability Report cited the large volume of CRE debt maturing over the coming year as a key vulnerability, with non-agency CMBS the most exposed segment. The January 2026 SLOOS showed banks eased CRE lending standards through the second half of 2025 after tightening from 2022 through 2024. Federal Reserve
- S3 Capital closed its third real estate credit fund at $1.3B alongside a $465M co-investment vehicle, with capital earmarked for multifamily lending. CRE Daily
- Americold and EQT formed a $1.3B cold storage joint venture covering 12 U.S. facilities, marking another large institutional commitment to logistics-adjacent industrial. CRE Daily
- QTS founder Chad Williams launched QII, a new development firm targeting gigawatt-scale data center campuses as hyperscale demand continues to outrun supply. CRE Daily
- Chiron Real Estate entered senior housing with a $425M DC-area acquisition of three communities, its first transaction in the sector. CRE Daily
- U.S. multifamily rents rose slightly in April but remained negative year-over-year, with Sun Belt oversupply continuing to pressure pricing — even as Texas, Florida, and North Carolina led inbound renter migration in 2026. CRE Daily — rents | CRE Daily — migration
INDUSTRY NEWS
- Blackstone launched a new BREDS Homebuilder Lending Platform designed to finance construction of more than 50,000 for-sale homes annually, anchored by portfolio company Brio Homebuilder Solutions plus third-party builders. Tim Johnson, Global Head of BREDS, framed the move around housing supply. Bloomberg
- The platform builds on Blackstone’s existing for-sale housing footprint, including Tricon Residential, which has developed roughly 64,000 single-family homes and home sites. National Mortgage Professional | The Real Deal
- The NYC Rent Guidelines Board opened its preliminary 2026 range at 0% on the low end, putting a rent freeze for nearly one million stabilized apartments on the table ahead of the final vote. CRE Daily
- Only a handful of multifamily markets are expected to see strong rent growth in 2026, with San Francisco and San Jose leading on tight supply and tech-driven demand. GlobeSt