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

Key Takeaways

The real estate market continues to evolve with demographic shifts, policy changes, and industry consolidation shaping the landscape:

• Baby boomers have overtaken millennials as the largest generational group of home buyers, now representing 42% of all buyers compared to millennials’ 29% 1
• Mortgage rates are expected to remain in the 6.5% to 7% range throughout April, with economic uncertainties and potential tariff impacts keeping rates elevated 2
• The Federal Housing Administration (FHA) announced non-permanent U.S. residents will no longer be eligible for FHA-insured mortgages effective May 25, 2025 3
• Rocket Companies is acquiring Mr. Cooper Group in a $9.4 billion deal, uniting America’s largest mortgage lender and servicer 4
• Home affordability remains challenging with housing costs consuming about one-third of the average national wage, and 97% of analyzed counties being less affordable than their historical averages 5
• The Federal Housing Finance Agency (FHFA) has ordered Fannie Mae and Freddie Mac to terminate their support for Special Purpose Credit Programs 6

Residential Real Estate Markets

Baby boomers are flexing their financial muscle in the housing market while affordability challenges persist for younger buyers:

• Baby boomers now represent 42% of all home buyers, with millennials dropping to 29% from 38% a year ago 1
• Half of older boomers and two out of five younger boomers are purchasing homes entirely with cash, bypassing financing altogether 1
• First-time buyers now represent only 24% of recent home buyers, down significantly from 32% last year 1
• Existing home sales decreased year-over-year in February, breaking a streak of four consecutive months with year-over-year increases 7
• Housing expenses now consume about one-third of the average national wage, with 97% of analyzed counties being less affordable than their historical averages 5
• Median home prices decreased slightly to $351,000, but year-over-year prices are still up 5.2% 5
• Midwest zip codes are leading housing demand in early 2025, with five of the ten most-viewed zip codes located in the Midwest 8

Mortgage Markets

The mortgage industry is experiencing significant consolidation while rates remain elevated:

• Mortgage rates are expected to stay in the 6.5% to 7% range throughout April due to economic uncertainties and potential inflation concerns from new tariffs 2
• Rocket Companies is acquiring Mr. Cooper Group in a $9.4 billion all-stock deal, creating a financial powerhouse that will manage a mortgage portfolio exceeding $2.1 trillion and serve nearly 10 million customers 4
• A&D Mortgage has finalized its acquisition of Mr. Cooper’s wholesale and non-delegated correspondent mortgage origination business, expanding its presence in Agency and Government lending markets 9
• Brookfield Asset Management has acquired a majority stake in Angel Oak Companies, integrating Angel Oak’s specialized mortgage strategies into Brookfield’s $317 billion credit platform 10
• The FHA has announced that non-permanent U.S. residents will no longer be eligible for FHA-insured mortgages effective May 25, 2025 3
• Fannie Mae announced the results of its thirty-fourth reperforming loan sale transaction, involving 3,130 loans totaling $558.7 million in unpaid principal balance 11
• Freddie Mac sold $261 million in non-performing loans, consisting of 1,458 deeply delinquent residential first lien loans 12

Commercial Real Estate Markets (including Multifamily)

The multifamily sector shows signs of stabilization amid rising vacancy rates and changing investment dynamics:

• Apartment vacancy rates reached 6.3% in Q1 2025, the highest level since 2010, according to Moody’s Analytics 13
• Multifamily absorption is forecast at 300,000 units in 2025, marking the third straight year above the long-term average of 200,000 units despite a slowdown from 2024’s 480,000 units 14
• Multifamily permits decreased by 4.3% from January and nearly 16% year-over-year, while starts rose by 12.1% month-over-month, suggesting potential market stabilization 15
• Impending tariffs could increase development costs by 3-5%, potentially delaying or canceling new multifamily projects but benefiting existing property owners by reducing supply 16
• A recent Berkadia survey shows 83% of multifamily investors plan to expand their portfolios this year, reflecting growing institutional confidence 16
• Rent growth of 2.5-3% is expected in the short term, with stronger gains anticipated by 2026 as the market digests the influx of pandemic-era units 16
• Portland’s multifamily market shows resilience with effective rent growth forecast at 2.8% year-over-year in 2025, higher than the national average 17

CRE Financing & Servicing

Commercial real estate financing is seeing increased activity with new issuances and strategic acquisitions:

• Commercial real estate CLO issuance is booming in 2025, with billions in new deals far outpacing volumes in 2023 and 2024 18
• Realty Income Corporation priced a public offering of $600 million of 5.125% senior unsecured notes due 2035, with proceeds to be used for general corporate purposes including debt repayment 19
• Moody’s warns that US fiscal strength will continue declining as debt rises and affordability worsens, with tariffs and tax cuts unlikely to offset mounting deficits 18
• Trends in commercial non-bank lending will be explored in an MBA webinar on May 7, focusing on evolving strategies and operational advantages 20
• MBA Education is offering a School of Multifamily Property Inspections course from April 14-24, designed for originators, asset managers, underwriters, and servicers 21
• Trepp continues to be a leading provider of data and analytics for the structured finance, commercial real estate, and banking markets 22
• Delaware approved controversial legislation favoring corporate executives, sparking investor backlash and fears of companies relocating to take advantage of the new protections 18

Economic & Political News

The Trump Administration’s policies are reshaping economic expectations and real estate development:

• President Trump announced a 25% tariff on all automobiles and automotive parts not assembled in the United States, effective April 2 23
• Automotive executives warn of price increases, sales declines, and supply chain disruptions, with potential inflationary effects that could put upward pressure on mortgage rates 2
• The Trump Administration has taken steps to implement campaign promises related to housing, including plans to build 3 million new houses by selling and leasing government land 24
• Realtor.com is pushing for policies to close the estimated 4-million-home shortage in the U.S. market 25
• The Department of Housing and Urban Development (HUD) and Department of the Interior are opening federal lands for development, fulfilling a campaign promise 26
• Idaho’s governor passed a law to restrict mortgage trigger leads, effective July 1, 2025, shielding Idaho homebuyers from being inundated with credit solicitations 27
• The Federal Reserve maintained the federal funds rate between 4.25% and 4.5% in its most recent decision 4

Regulatory Developments

New regulations are reshaping access to mortgage financing and industry practices:

• The FHA announced that non-permanent U.S. residents will no longer be eligible for FHA-insured mortgages effective May 25, 2025, applying to all FHA Title II Single-Family forward and Home Equity Conversion Mortgage programs 3
• The FHFA has directed Fannie Mae and Freddie Mac to terminate their support for Special Purpose Credit Programs, though other programs like Fannie Mae’s HomeReady and Freddie Mac’s Home Possible remain unaffected 6
• On March 19, 2025, the FHA issued Mortgagee Letter 2025-08, rescinding three previous mortgagee letters relating to Appraisal Fair Housing Compliance and Appraisal Review and Reconsideration 28
• New York’s Department of Financial Services Superintendent Adrienne A. Harris strengthened commitment to health equity with a new regulation requiring insurers to collect voluntarily disclosed information 29
• The CFPB’s impact on mortgage finance and administrative law changes will be discussed in an MBA webinar on April 16 20
• Key federal regulations and emerging regulatory trends for lead generation in the mortgage industry will be explored in an MBA webinar on April 29 20
• Social media compliance and identifying potential RESPA violations in digital advertising will be addressed in an MBA webinar on April 22 20