Daily Dose of Real Estate

Daily Dose of Real Estate for May 26

Breaking up is hard to do. Not if you’re Donald Trump. But it is a bit harder when you’re Jerome Powell. Powell stays on as Fed governor through January 2028 despite handing over the chair to Kevin Warsh last Friday – and another Fed governor, Waller, picked the same day to turn hawkish on rates, calling for the FOMC to strike its “easing bias” language and noting that a hike cannot be ruled out (somehow this was the dove). The Conference Board’s Leading Economic Index inched up 0.1% in April after March’s 0.6% plunge, though its six- and twelve-month growth rates remain negative – strong present, shaky future, with AI-data-center spending doing most of the lifting. The bond market, for its part, is pricing 10-year inflation at 2.4%, a number Wolf Richter calls delusional given that the same market guessed 1.8% in 2016 (actual: 3.2%) and 2.4% in 2021 (actual through year five: 4.5%).

The 21st Century ROAD to Housing Act – the bipartisan housing supply bill – cleared the House (again) 396-13 and heads back to the Senate (again). The House removed the mandatory seven-year selloff language while keeping broader limits on institutional investor acquisitions of single-family homes. Refinances and servicer retention rates are what to watch: refis surged to 44% of Q1 originations – a four-year high, with rate-and-term refis at a five-year-high 60% of refi activity – but servicer retention slipped to 32% overall (from 35%) and 37% on rate-and-term refis (from 42%), even as both metrics remain near multi-year highs after three years of steady gains. And on the CRE side, condo prices have dropped 15-33% from peak in 24 major markets – Cape Coral down 33%, Oakland 31%, Austin 27% – with some markets now back to where they were 20 years ago, in case anyone needed a reminder that the pandemic-era Sun Belt boom had two sides to it.

Let’s get you caught up and out the door in 3 minutes. Tim

Sign up for the newsletter or refer a friend here – https://impactcapitoldc.com/#signup

KEY TAKEAWAYS

  • Kevin Warsh sworn in as 17th Fed Chair on Friday, succeeding Powell. Trump hosted the East Room ceremony with Justice Clarence Thomas administering the oath, ending Powell’s eight-year tenure and installing a chair widely viewed as more aligned with the administration’s growth-first posture.
  • Fed Governor Waller turns hawkish in Frankfurt: “remove the easing bias.” The Fed governor previously considered the board’s most rate-cut-friendly voice told a German central-banking audience that inflation “is not headed in the right direction” and that a future rate hike cannot be ruled out — the 10-year Treasury yield jumped from 4.53% to 4.58% on the speech.
  • Mortgage News Daily’s 30-year fixed ends the week at 6.65%. The MND rate index — a real-time read of lender rate sheets — closed Friday’s abbreviated pre-Memorial Day session unchanged, with rates settling in a narrow band as the bond market traded Iran headlines into the long weekend.
  • The Conference Board Leading Economic Index (LEI) inches up 0.1% in April after March’s 0.6% plunge.The LEI is a composite of ten forward-looking indicators (building permits, stock prices, consumer expectations, jobless claims, manufacturing orders, etc.) designed to anticipate turning points in the business cycle roughly seven months ahead; April’s reading of 97.4 reflected a rebound in stock prices and multifamily permits, but six- and twelve-month growth rates remain negative.
  • Iran negotiations show progress as Secretary Rubio meets Indian counterparts and an Iranian team arrives in Doha. Trump and Netanyahu spoke Saturday about a possible Strait-of-Hormuz–focused interim agreement, with Israel pushing for nuclear-program concessions; AAA pegs the national gasoline average at $4.56/gallon, a four-year high.
  • California Mortgage Bankers Association endorses Newsom’s $100M Southern California Rebuild Fund. The May revised budget proposal would use loan guarantees, rate buydowns, and subordinate financing to bridge insurance-payout shortfalls for homeowners affected by the 2025 wildfires, ahead of the June 15 state budget deadline.
  • Bravern Office Commons in Bellevue heads to auction backing $304M of CMBS debt. Commercial mortgage-backed securities (CMBS) are bonds collateralized by pools of commercial real estate loans; this dark, single-tenant Microsoft campus — appraised at $605M at issuance — is the latest major office workout to test market clearing levels in a top-tier suburban submarket.
  • Bipartisan Policy Center publishes a side-by-side of the House and Senate ROAD Act amendments. With both chambers having now passed comprehensive housing legislation twice, the analysis maps the remaining differences — institutional-investor purchase limits, central-bank-digital-currency language, and community-bank deregulation — that still need to be reconciled before the bill can reach the President’s desk.

REGULATORY & POLICY DEVELOPMENTS

  • Kevin Warsh sworn in as the 17th Federal Reserve Chair on Friday. Supreme Court Justice Clarence Thomas administered the oath in the White House East Room (rather than the customary Fed building venue), with Trump pledging the new chair would be “totally independent” while signaling clear preferences on growth and rates; Powell remains on the Board through January 2028. https://www.cbsnews.com/news/kevin-warsh-sworn-in-federal-reserve-chair/
  • Waller calls for the FOMC to drop its easing bias and warns a rate hike is on the table. In a May 22 lecture at the ECB-affiliated Center for Central Banking in Frankfurt, the Fed governor flagged that core PCE — the Fed’s preferred inflation measure, which tracks personal consumption expenditures excluding food and energy — hit 3.8% in April, that supply-shock effects from the Iran conflict may prove non-transitory, and that he supports striking the “easing bias” language from the FOMC policy statement. https://www.federalreserve.gov/newsevents/speech/waller20260522a.htm
  • Conference Board LEI rises 0.1% in April to 97.4, snapping March’s 0.6% decline. The leading-index gain reflected a stock-price rebound and a pickup in multifamily building permits, but the LEI’s six- and twelve-month growth rates remained negative — a signal the Board reads as “fragile economic conditions ahead” — and the Board kept its 2026 GDP forecast at 1.7%. https://www.prnewswire.com/news-releases/the-conference-board-leading-economic-index-lei-for-the-us-inched-up-in-april-302780137.html
  • Bipartisan Policy Center publishes a detailed analysis of the House amendment to the 21st Century ROAD to Housing Act. The May 22 brief catalogs the differences between the House’s 396-13 amended version (passed May 20) and the Senate’s earlier 89-10 March version — including the removal of the seven-year forced-divestiture provision on institutional investors owning 350+ single-family homes — and frames the path to reconciliation. https://bipartisanpolicy.org/issue-brief/whats-in-the-house-amendment-to-the-21st-century-road-to-housing-act/
  • Trump-Netanyahu call sets up a possible US-Iran framework focused on the Strait of Hormuz. Saturday’s readout (per an Israeli official) had the President pledging to “stand firm” on dismantling Iran’s nuclear program and removing enriched uranium, with Iran’s chief negotiator and Foreign Minister Araghchi arriving in Doha on Monday for follow-on talks. https://www.cnn.com/2026/05/25/world/live-news/iran-war-us-peace-deal

RESIDENTIAL REAL ESTATE MARKETS

MORTGAGE MARKETS

  • The MND 30-year fixed closes the week at 6.65%, unchanged on Friday’s shortened session. Mortgage News Daily — the per-prompt exclusive rate source for this newsletter — runs a real-time index based on actual lender rate sheets; the index was steady through the abbreviated pre–Memorial Day trading even as Iran diplomacy headlines drove intraday volatility. https://www.mortgagenewsdaily.com/mortgage-rates
  • The 10-year Treasury jumped from 4.53% to 4.58% on Waller’s Frankfurt speech. Because lenders price 30-year mortgages off the 10-year Treasury (plus a risk-and-servicing spread), every move in the benchmark feeds quickly into rate sheets — bond markets repriced the path of policy in real time as the Fed’s reliable dove flagged supply-disruption persistence. https://www.housingwire.com/articles/new-fed-chair-warsh-loses-dove-as-waller-turns-hawkish/
  • ICE Mortgage Monitor: servicer retention slips in Q1 even as the refinance wave hits a four-year high.“Servicer retention” is the share of borrowers who refinance with their existing loan servicer rather than switching lenders; roughly 585,000 first-lien refinances closed for $242 billion — the strongest quarterly volume since early 2022 — but retention weakened even as refinances reached 44% of all originations. https://www.mortgagenewsdaily.com/news/05152026-service-retention-ice-mortgage-monitor

ECONOMIC NEWS

  • Waller’s Frankfurt speech reframes the policy debate. The governor’s prepared remarks raised the prospect of a rate increase, said he wants to remove the easing bias, and explicitly worried that 1-to-5-year inflation expectations — which have moved up since the start of 2026 — could begin to drift long-run expectations, the anchor the Fed has been most determined to protect. https://www.bloomberg.com/news/articles/2026-05-22/fed-s-waller-says-next-move-as-likely-to-be-rate-hike-as-cut
  • Warsh takes the Fed gavel at an unusually awkward moment for the central bank. Core PCE at 3.8%, the longest Fed-vs-White-House public tension in modern memory, an Iran-driven energy shock, and a labor market the Board describes as “near balance” all hit Warsh’s desk on day one. https://www.cnn.com/2026/05/22/economy/kevin-warsh-sworn-in-fed-chair
  • The bond market is pricing 10-year inflation at just 2.4% — a level Wolf Richter argues is “delusional.” Treasury sold $19 billion of 10-year Treasury Inflation-Protected Securities (TIPS — bonds whose principal adjusts upward with the Consumer Price Index) at a 2.169% yield on Thursday, and the gap between the regular 10-year Treasury (4.56%) and the 10-year TIPS yield (2.16%) implies the bond market expects average CPI inflation of just 2.4% over the next decade. The track record on these forecasts is poor: in May 2016 the market expected 1.8% — actual was 3.2%; in May 2021 the market expected 2.4% — actual over the first five years has been 4.5%. With the Fed’s preferred inflation gauge already at 3.8% in April and Waller flagging an upside drift in expectations. https://wolfstreet.com/2026/05/24/10-year-tips-v-10-year-treasury-securities-bond-market-has-long-been-delusional-about-actual-cpi-inflation/
  • The Conference Board’s leading and coincident indexes diverge. The economy looks healthy today but shaky tomorrow, per Conference Board data. The Coincident Economic Index — a real-time snapshot built from jobs, paychecks, factory output, and sales — rose 0.3% in April and is up 0.8% over the past six months, signaling current strength. But the Leading Economic Index, which tries to predict where the economy is heading several months out, has been falling over the same stretch. The Board’s explanation: massive spending on AI data centers and infrastructure is propping up today’s numbers and masking weakness on the consumer side that the forward-looking index is picking up. https://www.conference-board.org/topics/us-leading-indicators/
  • National gasoline average hits $4.56/gallon per AAA, the highest in four years. The May 21 reading puts retail energy directly into the shelter-affordability conversation and complicates the Fed’s path even if the Iran negotiations close out cleanly. https://www.cnn.com/2026/05/24/world/live-news/iran-war-news

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

  • Receiver markets the Bravern Office Commons in Bellevue, Wash., backing $304M of CMBS debt. The Class-A property has been dark since Microsoft consolidated to its Redmond campus; it was valued at $605M at issuance with a $230M “dark value” estimate from Morningstar DBRS — that dark value is the rating agency’s estimate of what the building is worth assuming no tenant in place, which sets a benchmark for how far premier suburban office can fall. https://crenews.com/2026/05/22/receiver-brings-bellevue-wash-office-property-backing-304mln-of-cmbs-debt-to-sales-block/
  • Appraised value of 10 South LaSalle in Chicago cut again, this time to $27.2M. The 781,426-square-foot Loop office tower — bought by the Feil Organization for $139M in 2002 — is now valued at less than 20% of its purchase price as the loan moves through workout, despite a recent doubling of the Housing Authority of Cook County’s lease footprint. https://crenews.com/2026/05/22/chicagos-10-south-lasalle-office-has-appraised-value-slashed-further/
  • Breevast pays $109.9M, or $413,158 per unit, for Avida Aventura in Miami. The Amsterdam-based buyer acquired the 266-unit, two-year-old apartment property from Fifield Cos. — one of the higher per-unit South Florida multifamily prints of the spring and a useful pricing data point as the multifamily CMBS delinquency rate sits at a record 7.71%. https://crenews.com/2026/05/22/2-year-old-apartment-property-in-miami-sells-for-109-9mln/
  • US Merchants pays $63.88M for a 453,960-square-foot industrial building in Surprise, Ariz. The $140.72-per-square-foot print at the West Summit complex outside Phoenix continues the pattern of premium pricing for Sun Belt logistics product even as broader CRE values reset. https://crenews.com/
  • Dominium acquires Sweetwater Terraces in Duluth, Ga., for $27.8M and plans a $9.9M renovation. The 165-unit senior Low-Income Housing Tax Credit (LIHTC) property — the federal program that finances most affordable rental housing through equity raised by selling tax credits to investors — was at risk of losing affordability status; Dominium will re-syndicate the property in Q4 2026 to lock in long-term affordability under a new credit allocation. https://www.bisnow.com/atlanta/news/deal-sheet/duluth-senior-apartments-trade-hands-the-atlanta-deal-sheet-134708
  • Sade Real Estate closes a $128.5M loan for a Houston apartment acquisition. The financing — disclosed late Thursday — is one of the larger Sun Belt multifamily debt prints of the past week and underscores that lender appetite for stabilized multifamily remains intact even with delinquencies running at multi-year highs. https://crenews.com/2026/05/21/sade-real-estate-secures-128-5mln-loan-for-houston-apartment-buy/

INDUSTRY NEWS

  • Powell stays on as Fed governor through January 2028 despite handing over the chair. The unusual decision to keep the seat rather than retire signals Powell’s intention to preserve a moderating voice on the Board through the back half of Trump’s term — a development markets will watch as the Warsh-Waller dynamic plays out across the next several FOMC meetings. https://thehill.com/video-clips/5890977-watch-live-donald-trump-kevin-warsh-federal-reserve-swear-in-ceremony/
  • HousingWire’s Mohtashami: April single-family starts at 930K SAAR reflect builder caution. “SAAR” (seasonally adjusted annual rate) is what a monthly figure would total if extrapolated to a full year and stripped of seasonal patterns — total housing starts ran 1.465M SAAR with single-family weakness offset by multifamily strength of 529K, the divergence consistent with the multifamily-permits component that pulled the LEI back to positive. https://www.housingwire.com/housing-market/
Get Updates

Insights Delivered to Your Inbox

REQUEST EARLY ACCESS

AI For Real Estate Professionals