Shadows are falling on the Sunshine State as inbound migration slows sharply — almost as abruptly as the shift away from work-from-home policies. Mortgage rates continue to inch lower, supporting affordability and helping prevent property values from slipping; once home prices start moving down, the trend tends to stick. Meanwhile, “shared sacrifice” is a difficult campaign message heading into the midterms.
The HECM program remains in a precarious position despite signals of support from HUD and constructive industry feedback on reforms to the HECM and HMBS programs. Fitch Ratings warns that proposed reductions to U.S. bank mortgage capital requirements — outlined last week by the Fed Vice Chair — could pressure nonbank lenders through lower volumes and tighter margins as banks regain competitive advantages.
Multifamily delinquencies rose to 1.37% in Q3 2025, the highest level since the post–Great Financial Crisis recovery period, with $8.9 billion in delinquent balances concentrated at community and commercial banks. Fannie Mae also launched a $1.6 billion-plus tender offer to repurchase Connecticut Avenue Securities (CAS) — bonds that transfer mortgage credit risk from taxpayers to private investors — offering premiums of up to 8.95% above face value to retire older credit risk transfer bonds and potentially reduce risk exposure.
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Today’s newsletter was prepared by our AI platform ALFReD. Know Better.
KEY TAKEAWAYS
- Mortgage rates hit 4-year low at 5.99% – The 30-year fixed mortgage rate dropped to its lowest level since 2022, driven by bond market rally and economic uncertainty 1
- Refinance applications surge 130% year-over-year – Lower rates triggered massive refinancing wave as homeowners rush to capture better terms 1
- Florida migration plummets 93% from pandemic peak – Net domestic migration to Florida fell to just 22,517 people in 2025, down from 310,892 in 2022, as housing costs and return-to-office policies dampen relocation appeal 2
- Home prices remain resilient despite four years of high rates – National median list prices up 8.1% since January 2022 despite 142% increase in active listings, showing market correction through volume rather than price 3
- Fitch warns lower bank capital rules would pressure non-bank lenders – Reduced mortgage capital requirements for banks could squeeze non-bank lender volumes and margins as competitive dynamics shift 4
- HUD reverse mortgage reforms stalled – Federal agencies received extensive feedback on HECM program changes but haven’t announced timeline for implementation 5
- Gary Keller predicts stronger 2026 housing market – Keller Williams founder projects lower rates and improved conditions despite industry consolidation concerns 6
- Miami attracts high-income job migrants despite state slowdown – Professional workers earning over $101,000 annually continue moving to Miami metro for career opportunities, with 55,244 interstate job migrants in 2024 2
- Multifamily delinquencies hit post-GFC highs at 1.37% in Q3 2025, with $8.9B in delinquent balances and $911M in quarterly losses signaling established credit stress 1
- Commercial lending surged 30% year-over-year in Q4 2025, led by 95% growth in office loans and 22% increase in multifamily originations 2
- Fannie Mae launches major CAS tender offer targeting $1.6B+ in Connecticut Avenue Securities across 22 note classes with premiums up to 8.95% 3
- CMBS distress accelerates with Fitch downgrading DC office portfolio and $76.6B in hard maturity debt facing 2026 deadlines 4 5
- Dallas multifamily market dominance continues with Kushner’s luxury acquisition highlighting the metro’s $4.4B investment volume ranking 6
- Industrial momentum builds with Stream Realty’s $1.7B Tesla-leased portfolio sale to BGO demonstrating institutional appetite for credit tenants 7
RESIDENTIAL REAL ESTATE MARKETS
Despite mortgage rates falling to four-year lows, the residential market continues showing mixed signals with pending sales declining while migration patterns shift dramatically. Four years of high rates have fundamentally reshaped housing dynamics, creating a market correction through volume rather than price.
PENDING HOME SALES DECLINE DESPITE RATE IMPROVEMENTS
- January pending home sales fell 0.8% month-over-month and 0.4% year-over-year, with the Pending Home Sales Index dropping to 70.9 showing continued buyer hesitation 7 8
- Regional trends diverged with monthly sales rising in Midwest and West but falling in Northeast and South, while year-over-year gains only occurred in South and West regions 7 8
FOUR YEARS OF HIGH RATES RESHAPE MARKET DYNAMICS
- National median list prices increased 8.1% since January 2022 despite active listings surging 142%, demonstrating market correction through volume as existing-home sales fell nearly 40% from 6.43 million to 3.91 million annually 3
- Lock-in effect constrains new listings with over 50% of borrowers holding rates below 4%, while inventory growth driven by longer marketing times as homes now take 78 days to sell versus 59 days in January 2022 3
- Delistings more than doubled as share of active listings and quadrupled as share of new listings over past five years, with sellers choosing to withdraw rather than accept lower prices 3
FLORIDA MIGRATION PATTERNS SHIFT DRAMATICALLY
- Net domestic migration to Florida plummeted 93% from pandemic peak, falling to just 22,517 people in 2025 compared to 310,892 in 2022, dropping the state from first to eighth position nationally 2
- Miami continues attracting high-income professionals with 55,244 interstate job migrants in 2024 earning median salaries over $101,000 annually, primarily from New York, Texas, Georgia, California, and New Jersey 2
- Foreign buyers and luxury market segments remain strong in South Florida with transaction volumes at all-time highs, as Miami evolves into global financial capital 2
NEW HOME SALES SHOW MODEST RECOVERY SIGNS
- New home purchase mortgage applications increased 2% year-over-year in January and jumped 19% from December 2025, with estimated sales running at 663,000 annual rate 9
- Average loan size for new homes increased from $380,607 in December to $385,506 in January, marking the highest level in 11 months as builders target higher-end segments 9
MORTGAGE MARKETS
Mortgage rates have plummeted to their lowest levels since 2022, triggering a massive refinancing boom while purchase applications remain surprisingly muted. The rate environment has dramatically improved affordability conditions, potentially qualifying millions of additional homebuyers.
MORTGAGE RATES HIT FOUR-YEAR LOW
- 30-year fixed mortgage rate fell to 5.99% on Monday according to Mortgage News Daily, matching 2022 lows and representing significant improvement from 6.89% at same time last year 1
- Mortgage News Daily’s Matthew Graham notes this visit to high 5% range “looks more sustainable on paper” compared to previous brief dips 1
REFINANCING ACTIVITY EXPLODES
- Refinance applications surged 130% year-over-year according to MBA data, with weekly applications rising 7% in latest survey as homeowners rush to capture lower borrowing costs 1
- Sustained rate declines expected to continue driving refinancing surge as homeowners with rates above 6% seek to reduce monthly payments and total interest costs 1
PURCHASE APPLICATIONS LAG DESPITE RATE BENEFITS
- Purchase applications only 8% higher year-over-year in mid-February despite dramatically improved affordability, showing buyer hesitation persists 1
- Lower rates could add roughly 550,000 new homebuyers this year versus last year, with 5.5 million households now qualifying for mortgages who couldn’t qualify a year ago 1
FREDDIE MAC CONFIRMS RATE DECLINE TREND
- 30-year FRM averaged 6.01% as of February 19, down from 6.09% prior week and 6.85% year ago, while 15-year FRM averaged 5.35% down from 5.44% previous week 7
- Chief Economist Sam Khater notes rates now at lowest level since September 2022, improving affordability for prospective buyers and strengthening homeowner financial positions 7
REGULATORY & POLICY DEVELOPMENTS
Federal housing agencies remain in limbo on key reverse mortgage reforms while Congress advances housing supply legislation. Industry stakeholders await clarity on HECM program changes and HMBS 2.0 implementation after extensive public comment periods, while regulatory changes threaten to reshape competitive dynamics between banks and non-bank lenders.
HUD REVERSE MORTGAGE REFORMS STALLED
- HUD, FHA, and Ginnie Mae completed extended public comment period two months ago on HECM and HMBS program changes but have not announced timeline for next steps 5
- Agencies received dozens of comments from major lenders including Mutual of Omaha Mortgage and Finance of America, plus servicer Celink, but regulatory decision-making process remains opaque 5
INDUSTRY PUSHES FOR HECM PROGRAM IMPROVEMENTS
- Mutual of Omaha, the country’s top HECM lender in 2025 with 5,740 endorsements, focused requests on lowering upfront mortgage insurance premiums currently at 2% of home value 5
- Company also called for modernization of Housing and Economic Recovery Act of 2008 to allow financial advisers to better assist seniors while maintaining consumer protections 5
HMBS 2.0 IMPLEMENTATION REMAINS UNCERTAIN
- Celink advocates for advancement of HMBS 2.0 program previously proposed by Ginnie Mae leadership, with agency releasing final term sheet in November 2024 before implementation stalled 5
- Implementation stalled under Trump administration due to reported staff cuts at Ginnie Mae and leadership vacancies, affecting about 15% of loans reaching maximum claim threshold 5
FITCH WARNS OF NON-BANK LENDER PRESSURE FROM CAPITAL RULE CHANGES
- Fitch Ratings warns that lower US bank mortgage capital rules would pressure non-bank lenders through reduced volumes and margins as banks gain competitive advantage 4
- Regulatory changes could fundamentally alter competitive dynamics in mortgage origination market, potentially disadvantaging independent mortgage companies and credit unions that have gained share 4
HOUSING SUPPLY LEGISLATION ADVANCES
- House of Representatives passed Housing for the 21st Century Act with strong bipartisan support, representing meaningful step toward expanding housing supply and removing homeownership barriers 8
- Legislation addresses nation’s housing shortage through supply expansion measures and represents shared priority across party lines for tackling affordability crisis 8
ECONOMIC NEWS
Economic momentum is showing signs of deceleration after strong 2025 performance, with business activity weakening and Fed rate cut expectations pushed further into 2026. Tax burden variations across states continue influencing migration patterns and housing demand.
FED RATE HOLD EXPECTED IN MARCH
- Market pricing shows mid-90% chance Fed leaves benchmark rate unchanged at March meeting according to CME Fed funds contracts, with traders pushing back first rate cut expectations toward mid-2026 10
- Fed’s preferred inflation gauge holding steady reinforces restrictive policy stance and sustained higher-for-longer rate environment despite mortgage rate improvements in secondary markets 10
ECONOMIC GROWTH MOMENTUM SLOWING
- Recent GDP estimates suggest economic expansion rate starting to decelerate after economy stunned observers through mid-2025 with strong performance that fueled stock market boom 11
- Friday’s economic releases ended string of positive employment and inflation reports that Trump administration officials had cited as proof of their agenda’s success 11
BUSINESS ACTIVITY HITS 10-MONTH LOW
- US business activity rose at weakest rate in 10 months during February with S&P Global Flash US Composite PMI Output Index falling to 52.3 from 53.0 in January 12
- Slowdown attributed to weak demand, high prices, and adverse weather conditions affecting business operations across multiple sectors 12
STATE TAX BURDENS INFLUENCE HOUSING DECISIONS
- Oregon residents face nation’s highest tax burden at 24.08% of annual income for individual filers, while Massachusetts couples filing jointly pay highest rate at 23.47% 13
- Florida residents enjoy lowest effective tax rate at 16.58% for individuals, followed by Tennessee at 16.60%, with no-income-tax states continuing to attract relocations despite other cost pressures 13
COMMERCIAL REAL ESTATE MARKETS (INLCUDING MULTIFAMILY)
Commercial real estate distress indicators are flashing red as multifamily delinquencies reach crisis-era levels while CMBS maturity walls create unprecedented refinancing pressure across property sectors. Government-sponsored enterprises and commercial lenders are showing renewed activity with major tender offers and lending growth signaling improved market confidence despite underlying credit concerns.
DISTRESS & SERVICING
- Multifamily Delinquencies Reach Post-Crisis Peak Bank-reported multifamily delinquencies climbed to 1.37% in Q3 2025, the highest since post-GFC recovery, with serious defaults (90+ days) accounting for $7.1B of the $8.9B total. Loss rates accelerated to 0.14%, equating to $911M in quarterly losses driven by floating-rate exposure and 2021-2022 vintage value declines. 1
- CMBS Maturity Wall Intensifies Roughly $76.6B in commercial mortgage-backed securities debt faces hard deadlines in 2026, with borrowers having exhausted all extension options. The maturity wall represents loans “truly at distress” after years of modifications. 5
- Fitch Downgrades DC Office Portfolio Fitch downgraded Class A notes in BSREP 2021-DC from AAAsf to AAsf, citing declining net cash flow to $25.2M due to higher vacancy and challenging Washington DC office market conditions. Portfolio faces August 2026 maturity with borrower yet to communicate payoff plans. 4
CAPITAL MARKETS
- Fannie Mae Launches $1.6B+ CAS Tender GSE commenced fixed-price cash tender offers for 22 classes of Connecticut Avenue Securities notes with premiums ranging from 1.13% to 8.95%. BofA Securities leads with Wells Fargo as co-manager, targeting notes from 2017-2023 vintages with March 3 settlement. 3
- Commercial Lending Rebounds Sharply Q4 2025 commercial/multifamily originations jumped 30% year-over-year and 25% quarter-over-quarter, with depositories leading growth. Office loans surged 95%, multifamily up 22%, while retail fell 12% and hotel originations dropped 34%. 2
TRANSACTIONS & VOLUME
- High-profile acquisitions across multifamily, industrial, and senior housing sectors demonstrate continued institutional appetite for quality assets with strong fundamentals and credit tenancy.
- Kushner Acquires Dallas Luxury Tower Kushner Companies purchased 330-unit Eastline Residences from Convexity Properties in Dallas’s second-largest single-property residential transaction since 2022. The 28-story luxury tower features the metro’s tallest rooftop pool and maintained 95% average occupancy over five years. Northmarq arranged financing. 6
- BGO Snaps Up Tesla-Leased Industrial Portfolio Stream Realty sold Empire West Buildings 9 and 10 totaling 1.66M SF to BGO for institutional investor. The Houston-area Class A industrial assets are 100% leased to Tesla under long-term investment-grade tenancy, following Stream’s recent sale of three other Empire West buildings. 7
- Welltower Offloads Palm Beach Senior Housing Ohio REIT sold five senior housing properties in Palm Beach County for $81.1M to Excelsior Care Group, comprising 720 units across Boynton Beach, Boca Raton, and Delray Beach locations. Welltower provided $160M financing for the transaction. 5
INDUSTRY NEWS
Industry leaders are projecting improved market conditions for 2026 while major consolidation continues reshaping the competitive landscape. Technology platform updates and significant REIT transactions highlight ongoing sector evolution amid regulatory uncertainty.
GARY KELLER PROJECTS STRONGER 2026 HOUSING MARKET
- Keller Williams founder cites lower mortgage rates and improved economic conditions at company’s annual Family Reunion, projecting 4.2% unemployment rate and 2% inflation rate for 2026 6
- Emphasized that consumers became accustomed to “underpaying historic average for affordability (27%)” over past decade and half, creating misguided perceptions when rates return to normal levels 6
KELLER WEIGHS IN ON INDUSTRY CONSOLIDATION
- Expressed skepticism about Compass-Anywhere merger integration challenges, noting “Compass has this brand that they have built and now they have to put that name on a lot of other brands” 6 14
- Called $1.8 billion Rocket-Redfin combination “kind of a nothing burger” from brokerage market-share standpoint, suggesting Rocket paid for customer acquisition rather than increasing sales volume 6 14
VERIS RESIDENTIAL SOLD FOR $3.4 BILLION
- Multifamily REIT sold to consortium of buyers marking culmination of company’s strategic transformation from former Mack-Cali Realty Corp. into pure-play multifamily REIT with Northeast properties 16
- Deal expected to close in second quarter 2026 subject to shareholder approval, with CEO Mahbod Nia describing sale as realizing intrinsic value on behalf of shareholders 16
CENTURY 21 ANNOUNCES GLOBAL 21 HONOREES
- Company recognized top 21 companies, offices, producers, and teams from worldwide network based on Adjusted Gross Commission performance in 2025, showcasing exceptional results across markets 17
- Prestigious list spans North America, Asia, and Europe within 79-country CENTURY 21 network powered by more than 125,000 independent sales professionals 17