After years of bipartisan alignment, the ROAD to Housing Act finally cleared the House (again) – after getting bogged down for months over institutional investor ownership rules, build-to-rent restrictions, zoning politics, and a heck of a lot of distractions. Most of the ideas in the bill have been floating around for years, a reminder that even “urgent” bipartisan policy tends to require a metaphysical change in your perception of patience. Now – back to the Senate the ROAD to Housing Act goes…godspeed. NAHB and the Urban Institute had estimated the original seven-year forced-sale provision would have reduced rental supply by 40,000 to 72,000 units a year – not super helpful. Removing it was the right call. NAHB designated House passage a “key vote,” and a coalition of more than 200 housing organizations endorsed the amended package on May 18. Chairman Hill took the bill to CNBC’s Squawk Box Tuesday morning. The Senate passed its own version 89-10 in March.
Bond markets are getting a workout. The 30-year Treasury yield closed at a 19-year high above 5.2% and the MND 30-year fixed mortgage rate jumped to 6.75% – up roughly 75 bps since the Iran war began – as April CPI at 3.8% and PPI at 6.0% removed the near-term case for rate cuts. Pending home sales rose 1.4% in April, NAHB builder sentiment ticked up to 37, Toll Brothers beat Q2 estimates, and Home Depot reaffirmed full-year guidance, so all is not bad. Some contradictory indicators suggest otherwise: MBA Builder Applications turned negative year-over-year for the first time since October, Toll’s deliveries fell 14%, Home Depot’s CFO flagged a pullback on larger projects, and Wolf Richter’s Q1 read showed subprime auto ABS delinquencies at a record 6.90% as PE-backed dealer-lender chains continue to implode. Wednesday’s FOMC minutes will tell us whether the Fed has noticed.
Let’s get you caught up and out the door in 3 minutes. Tim
KEY TAKEAWAYS
- Mortgage rates jump to new 9-month high. MND’s 30-year fixed climbed to 6.75% on Tuesday, up 7 bps on the day and roughly 75 bps since the Iran war began. Mortgage News Daily
- 30-year Treasury yield hits 5.2%, highest since 2007, as bond markets price in stickier inflation and a Fed that may not cut this year. The benchmark 10-year sits near 4.6%. CNN
- Pending home sales rose 1.4% in April, +3.2% YoY — a third consecutive monthly gain, though economists called the rebound fragile given rate volatility. NAR
- NAHB builder confidence rebounds to 37 in May, beating estimates of 35, but marking the 25th consecutive month below the neutral 50 reading. NAHB via Seeking Alpha
- MBA Builder Applications down 2.4% YoY in April — the first annual decline since October 2025 — as buyers pulled back from new construction. HousingWire
- Broeksmit calls for regulatory rollback at the MBA Secondary Conference, urging changes to LO comp, QM, TRID, and Basel III risk weights as rates remain “stubbornly high.” HousingWire
- House moves on amended ROAD to Housing Act, with Hill and Waters stripping the controversial seven-year forced-sale provision for build-to-rent investors. Chairman Hill discussed the bill on CNBC’s Squawk Box this morning. Financial Services Committee
- Toll Brothers Q2 beats but deliveries slide. EPS of $2.72 topped consensus of $2.57; revenue down 7.4% YoY to $2.53B as deliveries fell to 2,491 homes from 2,899. Investing.com
- Subprime auto delinquencies at record highs. Wolf Richter notes the 60+ day subprime auto ABS delinquency rate hit a record 6.90% in January, with PE-backed subprime dealer-lenders imploding — a leading indicator for stressed-consumer credit. Wolf Street
- Providence tops Zillow’s hottest rental markets for summer 2026, edging out New York and San Francisco. Northeast and coastal California dominate as new construction failed to reach those regions. Zillow
RESIDENTIAL REAL ESTATE MARKETS
- Pending home sales climb 1.4% in April, up 3.2% YoY. NAR’s index rose to 74.8 on contract signings in the Northeast (+6.6%), Midwest (+3.0%), and West (+0.4%); the South fell 0.7%. Yun cited “cautious optimism” but flagged rising mortgage rates as a headwind. NAR
- NAHB Housing Market Index rebounds to 37 in May from 34. All three components — current sales (40), six-month expectations (45), and buyer traffic (25) — gained three points each. Bill Owens cited “higher mortgage rates, rising gas prices and economic uncertainty related to the war in Iran” as continuing headwinds. Advisor Perspectives
- Median U.S. sale price up 2.4% YoY in April — the largest gain since March 2025. Redfin notes the buyer-seller imbalance has narrowed for four straight months but the market still favors buyers, with active listings near a multi-year high. Redfin
- Builder price reductions ease modestly. NAHB data show 32% of builders cut prices in May, down from 36% in April, though the average discount widened to 6% from 5%. Sales incentives remained at 61%, marking the 14th consecutive month at or above 60%. InvestingLive
- Pantheon and Oxford see limited upside. Oliver Allen of Pantheon called the prospects of a “marked further recovery” slim, while Nancy Vanden Houten at Oxford pointed to rates up ~25 bps since end of April as a constraint on sales through year-end. Reuters via U.S. News
MORTGAGE MARKETS
- MND 30-year fixed rate jumps to 6.75% on Tuesday, up 7 bps. The average top-tier rate is now up roughly 0.75% since the start of the Iran war and at a new 9-month high. MBS sold off sharply, with UMBS 30-year 5.0s down 0.61 on the day. Mortgage News Daily
- Rates open the week higher. Monday’s MND read was 6.68%, up 3 bps from Friday, with MND noting markets remained “highly attuned to breaking news on the Iran war” after a planned strike was cancelled mid-day. Mortgage News Daily
- MBA Builder Application Survey down 2.4% YoY in April, down 10% from March — the first annual decline since October 2025. MBA estimates new single-family sales at a 655,000 SAAR; government loans (FHA/VA/USDA) accounted for just over half of applications as buyers leaned on affordability programs. HousingWire
- Broeksmit pushes regulatory rollback agenda at MBA Secondary. The CEO argued LO comp limits flexibility on borrower pricing, QM needs “targeted changes” to ease GSE refis, and TRID’s compliance costs aren’t justified. He also called the current Basel III proposal “far superior” to the prior version but argued the 250% MSR risk weight should return to 100%. HousingWire
- Mortgage rate forecasts diverge from reality. MBA’s May forecast still calls for the 30-year to settle near 6.50% through 2026; Fannie Mae projects 6.3% for the rest of the year. Both forecasts predate the war-driven leg up that has pushed rates to current 6.75% levels. Yahoo Finance
REGULATORY & POLICY DEVELOPMENTS
- Chairman Hill takes ROAD Act to CNBC. Financial Services Committee Chairman French Hill appeared on Squawk Box this morning to discuss the amended 21st Century ROAD to Housing Act, which the House is expected to vote on this week. Financial Services Committee
- House releases amended ROAD to Housing Act text. The Hill-Waters compromise strips the seven-year forced-sale mandate for institutional owners of build-to-rent single-family homes — a provision NAHB and Urban Institute estimated would reduce rental supply by 40,000–72,000 units annually. The bill must return to the Senate after House passage. Washington Times
- NAHB designates House vote a “key vote” in a May 15 letter to members, citing the amended bill’s removal of forced-sale provisions and its broader supply-side measures. NAHB indicated it will also send a letter to the Senate urging swift approval after the House clears the bill. NAHB
- Up for Growth coalition of 200+ organizations sent a letter to House leadership May 18 endorsing the amended package while noting that institutional-investor restrictions still risk reducing rental supply. The coalition flagged that the bill preserves language supporting Trump’s January 20, 2026 executive order on institutional buyers. Up for Growth
- Broeksmit signals MBA opposition to investor ban. At Secondary on Monday, the MBA CEO said the institutional investor restriction “would lead to less new rental home construction” and described it as “a guaranteed recipe for higher prices,” even as he praised other portions of the bill including provisions for modular and manufactured housing. HousingWire
ECONOMIC NEWS
- 30-year Treasury yield hits 5.2%, a 19-year high. The benchmark 10-year sits near 4.6%, also at multi-year highs. Bond traders are pricing in stickier inflation tied to oil prices above $100 a barrel and the ongoing closure of the Strait of Hormuz. CNN
- Markets pricing zero Fed cuts for 2026, with some traders giving non-trivial odds of a hike before year-end. Inflation has run hot — April CPI at 3.8% YoY (highest since 2023) and PPI at 6.0% YoY (largest gain since March 2022) — limiting policy room. Trading Economics
- Subprime auto delinquencies set records as PE-backed dealer-lenders implode. Wolf Richter reports the 60+ day subprime auto ABS delinquency rate hit 6.90% in January (record high) and 6.80% in February, while America’s Car Mart trades at $11 — down 93% from its 2021 peak. Total auto loan balances reached $1.68 trillion in Q1, but the auto-loan-to-disposable-income ratio dipped to 7.17%, the lowest since 2014 ex-2021. Subprime is roughly 15% of outstanding balances. Wolf Street
- Home Depot Q1 sales up 4.8% to $41.8 billion; comps up 0.6% (U.S. comps +0.4%). Adjusted EPS of $3.43 topped consensus by 2 cents. CEO Ted Decker said the “underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure.” Full-year guidance reaffirmed. The Home Depot IR
- Home Depot CFO flags larger-project pullback. CFO Richard McPhail noted homeowners are pulling back on bigger-ticket work even as smaller repair-and-maintenance demand holds up — a leading indicator for residential lending tied to home improvement. Yahoo Finance
- FOMC minutes from April 28-29 meeting release Wednesday afternoon. Markets will parse the minutes for evidence on whether the Fed has dropped its easing bias after three dissents at the April meeting from members who wanted to remove dovish language. Federal Reserve
COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)
- Providence tops Zillow’s hottest rental markets for summer 2026, with New York at #2 and San Francisco at #3. Northeast and coastal California metros dominate the top ten because the 2024 surge in new construction largely missed those regions, keeping vacancy tight and concessions low. Sun Belt markets like Austin, Tampa, and Phoenix are absent thanks to ample new supply. Zillow
- Rent growth bifurcated by geography. Chicago (5.7%), San Francisco (5.4%), Providence (5%), and Virginia Beach (4.8%) lead Zillow’s top ten on annual rent growth; only 12.9% of Providence property managers offer concessions, lowest in the top ten. Typical New York metro rent now $3,406/month, with StreetEasy reporting median Manhattan asking rents at a record $4,120. Zillow
- Exurbs outpace metros in growth, per new Census data. Master-planned communities outside major metros are pulling buyers as remote work and affordability shift demand patterns. CRE Daily
- Construction cost pressure returns. Multifamily and CRE developers face fresh material cost increases as inflation and energy markets push prices higher, threatening the supply pipeline already hampered by elevated financing costs. CRE Daily
- Stockton retail center secures $19.1M CMBS mortgage. CJ Park & Associates lined up financing from Barclays Capital against the 142,957-sf Pacific Town Center, in the BBCMS 2026-5C40 conduit deal. Commercial Real Estate Direct
- Industrial demand strong in select markets. Dollar Tree opened a 1 MSF distribution center outside Phoenix and Toyota announced plans for a $2 billion San Antonio expansion, both reported May 18 — reinforcing the bifurcation between strong industrial fundamentals and softer multifamily/office. Commercial Property Executive
INDUSTRY NEWS
- Toll Brothers Q2 EPS $2.72 beats $2.57 estimate. Revenue of $2.53B beat consensus of $2.42B but fell 7.4% YoY; deliveries declined to 2,491 homes from 2,899. Net signed contracts rose 7% in units and 8% in dollars to $2.81B. Gross margin came in 70 bps above guidance at 26.2%. Stocktitan
- UWM presses Two Harbors shareholders to reject CrossCountry deal. United Wholesale Mortgage made a last-minute push urging shareholders to vote down the CCM transaction, citing UWM’s higher bid, proxy firm support, and governance concerns ahead of the Two Harbors shareholder vote. NMP
- Truss launches digital HELOC for self-employed borrowers and investors. The Non-QM lender’s platform can fund in as little as five business days, targeting equity-rich borrowers who don’t want to refinance out of low first-lien rates. NMP
- Click n’ Close hires Christy Soukhamneut to support whole-loan trading expansion, the latest C-suite move as IMBs build out secondary-market capabilities amid flat Q1 production margins. NMP
- Home Depot beats and holds guidance. Adjusted EPS of $3.43 beat by 2 cents; revenue of $41.77B in line. Operating margin held at 11.9%; GMS acquisition pressured gross margin by 75 bps. Full-year sales growth guidance of 2.5%–4.5% and adjusted EPS growth of flat-to-+4% reaffirmed. Stocktitan