Home prices continue their stubborn climb while mortgage rates bounce sideways at 6.74%. Rocket Companies swallows Mr. Cooper in a $9.4 billion mortgage servicing power merger. Trump’s new tariffs on building materials threaten to make construction even pricier starting tomorrow. Compliance officers everywhere rejoice at the closing of the CFPB. Now let’s get you caught up and out the door in three minutes.

Today’s newsletter was generated by our AI platform ALFReD. Know Better. Work Smarter. Be More Successful. Tim

Key Takeaways

• Home prices continue rising with forecasts predicting 1.3% to 3.5% appreciation in 2025 despite affordability challenges. 1
• Trump administration closes the CFPB “for good.” OMB official claims “enough is enough.”
• Mortgage rates dropped to 6.52% as of March 31, 2025, according to Mortgage News Daily’s rate survey, reaching the lowest level since early December and potentially boosting spring buying activity. 2
• Rocket Companies is acquiring Mr. Cooper in a $9.4 billion all-stock deal, creating a mortgage giant servicing one in six U.S. mortgages with a combined $2.1 trillion servicing portfolio. 3
• Housing inventory grew 32% year-over-year in February 2025, giving buyers more options after years of limited supply. 4
• NAR revised its 2025 existing-home sales forecast down to 4.3 million (6% growth) due to ongoing affordability challenges. 5
• Trump administration’s new tariffs on building materials take effect tomorrow, with NAHB estimating they will add $3,000-$5,000 to the cost of a typical new home, further straining affordability. 6

Residential Real Estate Markets

The housing market continues to face affordability challenges despite growing inventory, with regional markets showing increasing divergence in price trends and buyer behavior.

• Sales Trend: Existing home sales decreased year-over-year in February after four consecutive monthly increases, with SAAR at 4.26 million. 7
• Price Growth: Median existing-home price reached $396,900 in January 2025, up 4.8% year-over-year and setting a January record. 8
• Affordability Crisis: Monthly mortgage payments hit an all-time high of $2,807, up 5.3% from last year, further straining buyer budgets. 9
• Regional Divergence: Northeast markets show stronger price growth due to tight inventory, while Sunbelt markets like Tampa and Phoenix are cooling with increased supply. 10
• Spring Selling Challenges: Sellers face more competition as rate lock-in effects ease and more homeowners list properties, creating a more balanced market. 11
• Buyer Behavior: Purchasers are becoming more selective and negotiating aggressively on price, particularly in markets with rapid pandemic appreciation. 12
• Inventory Projection: Housing supply could reach 2019 levels by year-end if current growth trends continue, potentially easing price pressures. 12
• Construction Boost: Single-family home building continues to increase in response to high prices and low inventory. 13

Mortgage Markets

Mortgage rates have declined recently, triggering a surge in refinancing activity, while the industry undergoes significant consolidation with Rocket’s acquisition of Mr. Cooper.

• Current Rates: 30-year fixed mortgage rates dropped to 6.74% as of March 31, 2025, according to Mortgage News Daily’s rate survey, down 12 basis points from the previous week and reaching the lowest level since early December. 2
• Refinance Boom: Refinancing applications surged 37% in one week and 83% year-over-year as rates declined, with VA loan refinances up 15.5% week-over-week. 14
• Fed Policy: Federal Reserve maintained the federal funds rate between 4.25% and 4.5%, signaling potential cuts later in 2025 if inflation continues to moderate. 15
• Industry Consolidation: Rocket Companies acquiring Mr. Cooper for $9.4 billion, creating a mortgage giant servicing one in six U.S. mortgages with a $2.1 trillion portfolio. 3
• Deal Structure: Mr. Cooper shareholders will receive 11 Rocket shares per share, with Rocket shareholders owning approximately 75% of the combined company. 16
• Leadership Change: Mr. Cooper CEO Jay Bray will become president and CEO of Rocket Mortgage following the merger’s completion. 17
• Strategic Expansion: Deal follows Rocket’s recent $1.75 billion acquisition of Redfin, signaling an aggressive strategy to create a comprehensive homeownership platform. 17
• Buyer Demographics: Single women have nearly doubled their share of home purchasing, representing a significant shift in the market despite affordability challenges. 18

Economic & Political News

Policy shifts at federal and state levels are significantly impacting housing markets, with debates over lending access for non-permanent residents and efforts to address affordable housing shortages.

• Tariff Impact: Trump administration’s new tariffs on building materials take effect tomorrow, with NAHB estimating they will add $3,000-$5,000 to the cost of a typical new home, further straining affordability. 6
• Construction Costs: New tariffs will affect lumber, steel, aluminum, and other essential building materials, potentially slowing construction activity just as the housing supply was beginning to recover. 6
• CFPB Closure: Trump administration announces the “permanent and final” closure of the Consumer Financial Protection Bureau, with the President tweeting “No more overregulation! Mortgage market FREED at last!” [Not a real story – April Fools’ Day spoof] 😉
• Lending Policy Debate: NAMB urging FHFA not to follow FHA’s lead in excluding non-permanent residents from mortgage programs starting May 25, 2025. 26
• Industry Concerns: Mortgage brokers warn restrictions could lead to market contraction, less diversified portfolios, and adverse social implications. 26
• Florida Housing Reform: State lawmakers advancing bills to expedite tax incentives for developers and reduce local restrictions that hinder affordable housing projects. 27
• Economic Headwinds: New policies on trade tariffs, immigration, and reduced spending have renewed recession concerns and could impact buyer confidence. 28

Commercial Real Estate Markets

Commercial real estate markets show mixed signals across sectors, with strong activity in industrial and multifamily segments while office properties continue to face challenges. Financing trends indicate growing investor confidence in select assets.

• CLO Issuance Boom: Commercial real estate CLO issuance is surging in 2025, with volumes significantly outpacing 2023 and 2024 levels as investors seek higher yields. 19
• CMBS Performance: CMBS loan losses pulled back to $79.7 million across 14 loans in February 2025, with total losses of $38.2 million and average loss severity of 47.87%, down from January’s $246.9 million. 20
• Industrial Ownership Trend: Industrial occupiers increasingly choosing to buy rather than lease, with sales to occupiers up 32% in 2024, driven by long-term savings and greater control over property use. 21
• Older Asset Demand: Buildings constructed before 1980 represent over half of industrial acquisitions, with Chicago (188 transactions), Houston (143), and Los Angeles (123) leading the market. 21
• Multifamily Absorption: Net absorption hit 480,000 units in 2024, nearly double 2023 figures, with Northmarq forecasting a more modest 300,000 units in 2025, still above the long-term average of 200,000. 22
• Trophy Asset Financing: Witkoff and Cammeby’s secured a $279 million refinancing from Blackstone for the office portion of Manhattan’s Woolworth Building, demonstrating continued investor interest in high-profile, well-leased historic assets. 23
• Retail Transformation: Walgreens Boots Alliance entering into a definitive agreement to be acquired by Sycamore Partners for up to $23.7 billion, with significant implications for retail real estate portfolios. 24
• Office Market Recovery: Downtown Manhattan office market showing signs of recovery with increased leasing activity, though nationwide office vacancy rates remain elevated at 14% with only 25% of metro areas showing better-than-pre-pandemic absorption. 25