Home price growth slowest in 15 months. Sellers across the country are capitulating – offering concessions in nearly half of all transactions. Despite all the tariff drama that had Wall Street reaching for the liquor carts – some economists remain quite optimistic (read for the rest). Office sales prices climb 15% YoY. Let’s get you caught up and out the door in 3 minutes. Tim

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Key Takeaways

• Home price growth has slowed to its weakest pace in 15 months, with just a 0.2% month-over-month increase in March 2025 1
• Mortgage rates averaged 6.75% for 30-year fixed loans as of April 22, with 15-year fixed rates at 5.95%, according to Zillow’s latest mortgage rate survey 2
• FHFA Director Bill Pulte has launched an aggressive anti-fraud campaign, establishing a fraud hotline and terminating over 100 Fannie Mae employees 3
• Seattle leads the nation in seller concessions with 71% of transactions including buyer incentives in Q1 2025, nearly double the rate from a year earlier 4
• Commercial real estate cap rates are stabilizing across sectors, with retail holding steady at 6.7% and office cap rates dipping to 7.5% amid signs of recovery 5
• ITR Economics is not forecasting a recession for 2025 despite tariff concerns, arguing that impacts will be localized to specific sectors rather than causing broad economic decline 6

Residential Real Estate Markets

The U.S. housing market is experiencing a significant deceleration in price growth as buyer demand lags behind rising inventory. Regional variations are becoming more pronounced, with home prices falling in two-fifths of the 50 most populous metro areas.

• Home prices rose just 0.2% from February to March 2025, marking the slowest monthly growth rate in 15 months 1
• Annual price growth decreased from 5.1% to 4.6% year-over-year 1
• Active listings increased by 31.2% year-over-year as of April 12, 2025 7
• Median listing prices remained flat (0.0%) compared to the same period last year 7
• Homes are spending more time on the market, averaging 4 days slower than in 2024 7
• The typical home that went under contract in March took 47 days to sell, the longest duration for that month since 2019 8
• The week of April 13-19, 2025, was identified as the most favorable time for sellers due to increased buyer activity 9

Seller Concessions Reach Near-Record Levels

Seller concessions have become increasingly prevalent as the market shifts in favor of buyers, with significant regional variations in the frequency of these incentives.

• Sellers provided concessions in 44% of U.S. home-sale transactions in Q1 2025, up from 39% a year earlier 4
• Seattle leads the nation with concessions in 71% of transactions, nearly double the rate from a year earlier 4
• Portland, Oregon ranks second at 64%, up from 50% a year before 4
• Other markets with high concession rates include Atlanta (62%), San Diego (61%), and Denver (59%) 4
• New York City has the lowest concession rate at just 6%, down nearly 16 percentage points from a year earlier 4
• Miami saw concessions fall about 13 points to 34% 4
• Condos have become particularly challenging to sell due to “skyrocketing HOA fees and insurance” 4

Mortgage Markets

Mortgage rates have experienced significant volatility in April, largely attributed to President Trump’s tariff announcements and resulting economic uncertainty. Despite recent fluctuations, rates remain below the 7% threshold for the 14th consecutive week.

• 30-year fixed-rate mortgage averaged 6.75% as of April 22, with rates ranging from 6.63% to 6.88% depending on borrower qualifications and loan characteristics 2
• 15-year fixed-rate mortgage averaged 5.95% as of April 22, offering a discount of approximately 80 basis points compared to 30-year terms 2
• 5/1 ARM rates averaged 6.12%, providing only a modest discount compared to 30-year fixed rates, reducing the incentive for borrowers to choose adjustable-rate products 2
• Purchase application demand is 13% higher than last year, indicating a stronger start to the spring home-buying season 10
• The 10-Year Treasury yield stood at 4.38% as of April 22, reflecting ongoing investor concerns about inflation and economic policy 11
• According to Bankrate’s survey, 70% of rate watchers predict rates will remain rangebound in the coming week, while 20% expect rates to drop and 10% anticipate increases 12
• The spread between the 10-year Treasury and 30-year fixed mortgage remains elevated at approximately 2.37 percentage points, compared to a historical average of 1.7-1.8 points 13

Mortgage Regulatory Developments

• FHFA Director Bill Pulte established a fraud hotline (FraudTips@fhfa.GOV) on April 15, 2025, for reporting alleged mortgage fraud 3
• Fannie Mae terminated over 100 employees for unethical behavior, including involvement in fraud 3
• Pulte referred New York Attorney General Letitia James for federal prosecution for alleged mortgage fraud 3
• FHFA, Fannie Mae, and Freddie Mac are evaluating ways to “recall loans” that have been obtained fraudulently, signaling increased repurchase demands 3
• Four federal financial regulatory agencies temporarily paused certain appraisal requirements for real estate transactions in Los Angeles County affected by wildfires 14
• A bipartisan bill has been introduced to restore and expand the mortgage insurance premium tax deduction 15
• The CFPB released its 2025 priorities memo with unusual detail and transparency, emphasizing a return to the agency’s original goals established by the Dodd-Frank Act 16
• The CFPB is reportedly reducing staff and changing course under the new administration 16
• VantageScore has launched its latest credit scoring model, VantageScore 5.0, enhancing predictive capabilities for individuals with limited credit histories 17
• KeyBank National Association leads commercial/multifamily mortgage servicing with 14,201 loans totaling $221,083 million as of December 31, 2024 18

Economic & Political News

Recent economic developments and policy shifts continue to impact real estate markets, with tariff concerns and financial market volatility dominating headlines since mid-April.

• ITR Economics is not forecasting a recession for 2025 despite tariff concerns, arguing that impacts will be localized to specific sectors rather than causing broad economic decline 6
• According to ITR Economics, tariffs primarily affect specific sectors and businesses that rely on imported goods the most, creating “areas of pain for some and opportunity for others” 6
• ITR Economics advises businesses to diversify suppliers, understand competitive advantages, know customer behavior, improve customer experience, and prepare for stronger demand in the second half of 2025 6
• The Federal Reserve released its April 16 Beige Book showing economic activity expanded slightly from late February through early April, with five districts reporting modest growth and seven indicating little or no change 27
• Treasury Secretary Janet Yellen warned on April 18, 2025, that recent tariff policies could trigger a 0.3-0.5% increase in inflation by year-end, potentially delaying anticipated Fed rate cuts 28
• The Mortgage Women Leadership Council (MWLC) announced on April 17 that it has surpassed 500 members within just one year of its establishment, becoming the largest independent organization for women in the mortgage industry 29
• A JW Surety Bonds survey released April 19, 2025, revealed significant gaps in homeownership knowledge, with 42% of young renters unable to correctly define a mortgage and 38% of current homeowners misunderstanding how mortgage rates affect monthly payments 30
• The Conference Board’s Leading Economic Index for the U.S. declined by 0.3% in March 2025 to 102.4, following a 0.2% decrease in February, according to data released on April 18 31
• Retail sales unexpectedly fell 0.4% in March, according to Commerce Department data released April 15, suggesting consumer spending may be cooling amid economic uncertainty 32
• Housing starts dropped 14.7% to a seasonally adjusted annual rate of 1.321 million units in March, the Commerce Department reported on April 16, the largest decline since April 2022 33

Commercial Real Estate Markets

Commercial real estate markets are showing signs of stabilization across various sectors despite economic headwinds. Cap rates are holding steady or slightly adjusting as investors demonstrate renewed confidence in certain property types.

Office Market

• Office sale prices climbed 15.6% year-over-year to $231.71 per square foot, signaling recovery in the sector 5
• Cap rates dipped to 7.5%, reflecting growing investor appetite for Class A spaces in central business districts 5
• National vacancy rates rose slightly to 14.1%, but fewer move-outs and policy-driven returns to office suggest momentum may be shifting 5
• Asking and effective rents hovered near parity at around $19 per square foot, hinting at improving leasing fundamentals 5
• Credit spreads for office properties widened from 203.8 to 213.8 basis points between March 21 and April 11, 2025, reflecting lender caution 19

Retail Market

• Retail properties saw a modest year-over-year decline in median sale price—down 1.69% to $259.54 per square foot—but investor demand remains robust 20
• Cap rates held firm at 6.7%, signaling investor confidence in future appreciation and reliable income streams 20
• Grocery-anchored centers and essential-service tenants remain especially attractive, pushing lease rates to a median of $18.89 per square foot 20
• Limited new development due to high construction costs is intensifying competition for existing assets 20
• Credit spreads for retail properties increased from 165.4 to 177.0 basis points between March 21 and April 11, 2025 19
• Bank closures are opening prime retail space for new tenants in some markets 20

Industrial & Multifamily Markets

• Industrial assets continue to perform well, driven by e-commerce demand, with cap rates rising slightly to 7.27% 21
• Credit spreads for industrial properties widened from 152.8 to 161.9 basis points between March 21 and April 11, 2025 19
• Multifamily cap rates expanded to 6.54% for sold properties, with asking rates at 7.11%, revealing a pricing gap between buyers and sellers 22
• Nearly 592,000 multifamily units were completed in 2024, the largest one-year increase since 1974 23
• Net absorption totaled 530,600 units in 2024, more than double the 2023 figure, and has outpaced completions for three consecutive quarters 22
• The construction pipeline contains 750,300 units under construction as of February 2025, with roughly half expected to deliver in 2025 23

CRE Financing & Servicing

• The multifamily CMBS delinquency rate reached 5.44% in March 2025, up from below 2% in mid-2022 24
• Overall CRE CLO distress rate dropped to 14.4% in March from 16.0% in February, showing modest improvement 25
• The special servicing rate dipped to 8.5% in March, while the delinquency rate declined 30 basis points to 11.9% 25
• 69.5% of CRE CLO loans are past maturity, raising concerns about borrower liquidity and refinancing prospects 25
• Only 15% of CRE CLO loans remain current, down from 20.3% in February 25
• In March, $157.5 million across six CMBS loans were resolved with $128.0 million in total losses, with an average loss severity of 81.27% 24
• The 12-month moving average loss severity increased to 62.97%, up from 61.96% recorded as of February 24
• California is considering Senate Bill 789, which would impose a $5 per square foot annual tax on commercial properties vacant for 182+ days 26