Residential inventory creeps back to almost normal. Fun fact: Homebuyers are working 10 days a month just to afford their homes. The stock market takes while the bond market gives – rates trending down quick. HUD contemplates abandoning its brutalist headquarters “ten floors of basement” Jack Kemp. “Liberation Day” tariffs have everyone checking their portfolios and construction budgets. Let’s get you caught up and out the door in three minutes. Tim

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Key Takeaways

• The typical monthly payment for U.S. homebuyers has reached a record high of $2,802, driven by a 3.4% year-over-year increase in sale prices and mortgage rates hovering around 6.65% 1
• New listings of homes for sale rose 12.7% year-over-year during the four weeks ending March 30, marking the biggest increase in 11 months 1
• Mortgage rates are expected to remain in the 6.5% to 7% range in April, with potential for modest decreases if economic slowdown signs continue 2
• A federal judge has blocked the Trump administration’s efforts to dismantle the Consumer Financial Protection Bureau (CFPB), granting a preliminary injunction that preserves the agency’s operations 3
• Commercial real estate CLO issuance is booming in 2025, with volumes far outpacing 2023 and 2024 levels 5

Residential Real Estate Markets

Housing costs hit record highs while inventory shows signs of recovery, creating a mixed market for buyers and sellers.

• Record affordability challenges: The typical monthly payment for homebuyers has reached an all-time high of $2,802, with the average American working 10 full days each month just to afford a median-priced home of $412,000 6
• Regional burden variations: Housing payment burdens vary dramatically by location, with residents in Hawaii and California needing up to 17 workdays monthly for housing payments, while Midwest and Southeast regions require fewer 6
• Inventory improvement: New listings rose 12.7% year-over-year during the four weeks ending March 30, though levels remain below pre-pandemic norms 1
• Growing buyer interest: Google searches for “homes for sale” increased 17% from the previous month and are up 4% year-over-year, reaching their highest level since August 1
• Midwest gaining popularity: Five of the ten most-viewed zip codes are located in the Midwest, particularly around cities like Grand Rapids, Milwaukee, Kansas City, Minneapolis, and Chicago 7
• Market cooling in some regions: 11 of the top 60 metros saw months’ supply of over 7 months in February, with 5 located in Florida and 5 in Western states (Colorado, Arizona, and California) 8

Mortgage Markets

Rates remain elevated while industry consolidation accelerates, with modest improvements expected later in the year.

• Rate stability: Mortgage rates are expected to remain in the 6.5% to 7% range in April, with the average 30-year fixed rate at 6.76% as of late March 9
• Application activity: Mortgage applications decreased 1.6% for the week ending March 28, with refinance applications down 6% week-over-week but 57% higher than one year ago 10
• Purchase growth: Purchase applications increased 2% week-over-week and were 9% higher than the same week last year, showing year-over-year growth for more than two months 10
• Rate forecast: Fannie Mae has revised mortgage rate projections downward, now expecting rates to end 2025 at 6.3% and 2026 at 6.2% 11
• Major consolidation: Rocket Companies is acquiring Mr. Cooper Group for $9.4 billion, creating a combined entity managing a mortgage portfolio exceeding $2.1 trillion and serving nearly 10 million customers 4
• Strategic acquisition: A&D Mortgage has closed its acquisition of Mr. Cooper’s wholesale and non-delegated correspondent mortgage origination business, enhancing A&D’s presence in Agency and Government lending markets 12

Economic & Political News

Trump’s tariff policies and regulatory battles create market uncertainty with significant implications for real estate.

• “Liberation Day” tariffs: President Trump announced sweeping new tariffs on April 2, including a 25% tariff on all automobiles and automotive parts not assembled in the United States, along with various reciprocal tariffs on other countries 23
• Construction cost concerns: The tariffs could increase construction material costs by 3-5%, potentially further exacerbating housing affordability challenges 24
• Negotiation signals: While initially insisting the tariffs were “permanent,” Trump later indicated openness to talks with countries that “offer something phenomenal” 25
• CFPB legal battle: U.S. District Court Judge Amy Berman Jackson granted a preliminary injunction on March 28 blocking the Trump administration’s efforts to dismantle the Consumer Financial Protection Bureau 3
• Fiscal warning: 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 5
• Market volatility: Stock markets experienced sharp declines following the tariff announcement, reflecting broader economic uncertainty 23

Policy and Regulatory Developments

Recent policy changes impact housing affordability and mortgage market operations across multiple fronts.

• HUD headquarters relocation: The Department of Housing and Urban Development is exploring options to move from its aging brutalist headquarters building, potentially following other federal agencies that have relocated to more modern, efficient facilities 26
• FHFA tenant protection reversal: Bill Pulte, U.S. Federal Housing Director, rescinded Biden administration directives regarding multifamily leasing policies, including the requirement for 30-day advance notice for lease terminations 27
• Justification for reversal: Pulte cited existing state and local laws and potential compliance burdens on lenders and property owners as reasons for the policy change 27
• Fannie Mae data requirements: Fannie Mae announced updates to data requirements in its DUS Gateway for all Mortgage Loans, effective April 4, 2025, including new conditional requirements for “Forward Commitment Period” and “Refinance Type” 28
• Idaho mortgage protection: Idaho’s governor signed a law restricting mortgage trigger leads, effective July 1, 2025, shielding homebuyers from credit solicitations following mortgage applications 29
• Federal property withdrawal: The Trump administration has pulled 443 federal properties off the market, potentially impacting development opportunities 30
• Affordable housing concerns: Federal budget cuts threaten to deepen the affordable housing crisis, with potential impacts on HUD workforce and crucial funding programs 31

Commercial Real Estate Markets

The commercial real estate market shows mixed performance across sectors, with investors adapting strategies amid changing economic conditions.

• Investor preferences shifting: Small commercial property prices rose 1.1% in February, while large investment-grade properties fell 1.3%, as investors increasingly favor smaller, more resilient assets amid high vacancy rates in premium properties 13
• CLO boom: Commercial real estate CLO issuance is surging in 2025, with billions in new deals far outpacing volumes seen in 2023 and 2024, indicating strong investor appetite for structured CRE debt 5
• Data center investment: PGIM Real Estate secured $2 billion for its global data center fund, marking the largest closed-end vehicle in the firm’s history, with $450 million already deployed and plans to invest the remaining capital over the next 18 months 14
• Industrial ownership trend: Industrial occupiers increased property purchases by 32% in 2024, with over half of acquisitions involving buildings constructed before 1980, as companies seek long-term cost savings and greater control over their facilities 15
• Office market challenges: Federal office lease cancellations are creating uncertainty for landlords, with more than a dozen federal leases canceled in Massachusetts alone, calling into question the government’s reliability as a stable tenant 16
• Retail transformation: Brookfield has begun its overhaul of Northbrook Court Mall with a residential-first approach, constructing apartments, row houses, and townhomes before addressing retail renovations, reflecting a broader trend of repositioning struggling malls as mixed-use developments 17
• Prime asset financing: Blackstone provided a $278.9 million loan to refinance the office condo portion of the Woolworth Building in Lower Manhattan, replacing a previous $256 million loan from 2015, demonstrating continued investor confidence in well-leased, historic assets in prime locations 18

Multifamily Market Trends

Multifamily shows modest growth amid changing supply dynamics, with investors positioning for opportunities in 2025.

• Rent growth: National multifamily rents increased by $5 to $1,755 in March, representing a 1.0% year-over-year growth rate 19
• Occupancy stability: Occupancy rates remained stable at around 94.5%, indicating steady demand despite economic uncertainties 19
• Geographic variations: Gateway markets like New York and Chicago are leading in rent growth, while high-supply areas such as Austin and Phoenix are experiencing declines 19
• Supply moderation: The Minneapolis multifamily market shows development activity moderating to 3,211 units across the Twin Cities metro area in 2025, a significant shift following the addition of 26,000 apartments over the past three years 20
• Absorption forecast: Multifamily absorption is projected 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 21
• Investor intentions: 83% of multifamily investors plan to make acquisitions in 2025, while only 2% intend to shrink their portfolios, according to a Berkadia survey 22
• Tariff impact: New tariffs could increase development costs by 3-5%, potentially delaying or canceling new multifamily projects, which may benefit existing property owners by reducing supply and supporting rent growth 22