Daily Dose of Real Estate

Daily Dose of Real Estate for June 23

The construction pipeline flashed a warning on new construction, with May housing starts down 15.4 percent from April and multifamily off 41.6 percent. Existing-home sellers pitched in to move inventory, raising concessions to a record 46.2 percent of May closings. A buyer’s market yet? Almost. KB Home reports after the close Tuesday, where the Street has penciled in a 29 percent revenue decline even as broader demand holds up, helped by mortgage spreads that continue to tighten. Homeowners pulled $47 billion in equity in the first quarter, the most for a first quarter since 2021 – $11 trillion in tappable equity is apparently irresistible. The luxury tier yawned through all of it, predictably, and now includes millennials buying $7 million to $25 million homes with help from the Bank of Mom & Dad.

On the policy side, the ROAD to Housing Act cleared the Senate last night, billed as the biggest housing bill in three decades. It was expected to pass on the merits, but it had been at this stage at least twice – stripped from the 2025 NDAA, then passed 89-10 in March before the House amended and bounced it back. This is also the Congress that let FISA’s Section 702 lapse and is still deadlocked over bolting the SAVE Act onto the reauthorization, a tool both parties broadly support. Wrapped around the axle on its other business and heading for the exits, this group earns the benefit of the doubt only once the President signs. Two Harbors shareholders vote today on the CrossCountry sale after UWM declined to put a real number in writing. Hilton-flagged hotels account for an outsized share of CMBS distress at 16 percent delinquent, and senior housing drew a record $12.1 billion in the quarter against a supply pipeline nowhere near ready for the 2 million Americans turning 80 this year.

Let’s get you caught up and out the door in 3 minutes. Tim

Table of Contents

KEY TAKEAWAYS

May housing starts dropped 15.4% from April, dragged down by a 41.6% collapse in multifamily.
The ROAD to Housing Act faces a final Senate vote tonight, with the House to follow this week.
Nearly half of home sellers gave buyers concessions in May, a record for the month.
KB Home reports fiscal Q2 after today’s close, the first major homebuilder read of the cycle.
Short-term Treasury yields spiked on Chair Warsh’s hawkish turn, with the 1-year hitting 4.0%.
Homeowners tapped an estimated $47B in equity in Q1, the most for a first quarter since 2021.
Two Harbors shareholders vote today on the CrossCountry buyout after UWM let its window lapse.
FHFA Director Pulte’s move to acting DNI keeps the FISA surveillance law in limbo.
Mortgage News Daily’s 30-year fixed sits at 6.66%, up 0.08
Hilton hotels now carry an outsized share of CMBS distress.

RESIDENTIAL REAL ESTATE MARKETS

Housing starts tumble on a multifamily pullback. Housing starts fell 15.4% from April and 8.7% over the year in May, with buildings of five-plus units plunging 41.6% for the month while single-family starts slipped 1.9%. Building permits edged down 0.7% and completions fell 8.1%, pointing to a construction pipeline that is thinning into the back half of the year.
Source: NAM (Census/HUD data) (June 22)
Seller concessions hit a record for May. Sellers gave concessions in 46.2% of U.S. home sales in May, up from 43.1% a year earlier and the highest May share on record, with about one in seven sales carrying both a concession and a price cut. Nashville led at 75.5% while New York sellers conceded in just 2.9% of deals, and Washington, DC, sat at 42.8%. Source: Redfin (June 22)
KB Home reports Q2 after the close today. KB Home releases fiscal second-quarter results after market close on June 23, with the Street modeling roughly $0.45 in adjusted EPS on about $1.09 billion in revenue, a projected year-over-year revenue decline near 29%. Watch the call for net orders, community count, and incentive levels as a real-time read on builder demand. Source: Yahoo Finance / Zacks preview (June 20) TradingView
Demand is holding up despite rates near 2026 highs. Weekly pending home sales ran about 5% above last year and purchase applications were up 7% year over year, even as inventory growth nearly stalled. The resilience owes more to better mortgage spreads and modest affordability gains than to any move in rates. Source: HousingWire (June 21)
Geography decides single-parent homeownership. A LendingTree analysis found 39.2% of single parents own homes nationally versus 65.2% of all Americans, with Salt Lake City the most attainable metro at a 52.2% single-parent ownership rate and Los Angeles the least at 24.3%. Single-parent renters spend a punishing 40.9% of income on housing, well above the 30% affordability line. Source: NMP (June 22) nationalmortgageprofessional
Millennials are powering the luxury tier. A Sotheby’s International Realty mid-year report found millennials are the fastest-growing segment of the upscale market, with 73% of its agents citing a surge of interest in $5 million-plus homes from buyers aged 30 to 45. A newly raised lifetime gift-tax threshold, up to $15 million per person, is helping boomer parents bankroll purchases in the $7 million to $25 million range even as the broader market corrects. Source: Yahoo Finance / Moneywise (June 21)

MORTGAGE MARKETS

30-year fixed holds at 6.66%. Mortgage News Daily’s national index showed the 30-year fixed at 6.66%, up 0.08, with MBS trading moderately weaker on the session. Rates remain in the upper end of the range seen since mid-May as the market settles into the Fed’s more hawkish projections.
Source: Mortgage News Daily (June 22) Mortgage News Daily
Spreads are still doing the heavy lifting. Mortgage spreads recently closed near 2.01%, off the year’s lows but well inside the levels that would otherwise have pushed rates above 7%. The second half hinges on whether demand stays positive with rates parked near 6.60% and tougher year-over-year comps arriving from July. Source: HousingWire (June 21)
Homeowners are tapping equity again. Homeowners pulled an estimated $47 billion in equity in the first quarter, the highest first-quarter withdrawal since 2021, with HELOCs and home equity loans making up 54% and cash-out refinances the rest. With roughly $11 trillion in tappable equity available and many borrowers unwilling to surrender sub-market first liens, second liens remain the preferred access point. Source: CNBC (June 19)

REGULATORY & POLICY DEVELOPMENTS

ROAD to Housing Act past the Senate Monday night. The Senate took its last final vote on the bipartisan housing package and passed it Monday night – the House is voting on the bill later this week. Driven by Senators Warren and Tim Scott with Representatives French Hill and Maxine Waters, it would be the biggest housing measure in three decades, though some Republicans objected that it waives NEPA for housing rather than tackling permitting broadly. Source: The Hill (June 22)
What is in the reconciled bill. The Bipartisan Policy Center refreshed its section-by-section explainer to reflect the final text. New provisions would restrict large institutional investors from buying single-family homes and temporarily bar the Federal Reserve from establishing a digital dollar, alongside a CFPB study on loan-officer compensation, FHA appraisal flexibility, and a three-year CDBG-DR authorization. Source: Bipartisan Policy Center (updated June 21)
FHFA chief’s spy-agency role stalls FISA. Section 702 of FISA lapsed June 12 after Democrats objected to FHFA Director Bill Pulte serving as acting director of national intelligence, and renewal talks remain at a standstill after a nomination hearing for the administration’s longer-term pick was postponed. The episode keeps the head of the GSEs’ regulator entangled in an unrelated surveillance fight as housing legislation moves in parallel. Source: The Hill (June 22)
State regulators push back on the bank capital reproposal. CSBS filed a comment letter backing the goals of the agencies’ revised risk-based capital rules but urging changes to level the field for community banks, including adopting the proposed capital treatment of mortgage exposures and mortgage servicing assets. It also wants more banks eligible for the Community Bank Leverage Ratio and dollar thresholds indexed to inflation. Source: CSBS (June 18) csbscsbs
HUD secretary leans on public-private partnerships. HUD Secretary Scott Turner toured affordable-housing developments in mid-Michigan with Representative Tom Barrett, framing public-private partnerships and Opportunity Zones as the path to expanding supply. Local officials used the visit to press for continued Community Development Block Grant and homelessness funding. Source: AOL / The Center Square (June 19)

ECONOMIC NEWS

Short-end yields spike on Warsh’s “regime change.” The Treasury sold $518 billion of securities last week as 6-month-to-2-year yields jumped following the first FOMC meeting under Chair Kevin Warsh, with the 1-year yield up 16 basis points to 4.0% and the 2-year at 4.19%, the bond market now pricing a second rate hike. The 10-year, by contrast, eased 7 basis points to 4.46% as falling oil prices tempered inflation fears, and the Fed signaled it may end its T-bill purchases after mid-July.
Source: Wolf Street (June 19) wolfstreetwolfstreet
A data-light week points to Friday’s PCE. With Juneteenth on Friday and the post-FOMC quiet, little major macro data printed in the window, leaving Friday’s PCE inflation report as the main catalyst with the Fed funds target at 3.50% to 3.75%. An upside PCE surprise would pressure yields, and mortgage rates, higher into early July. Source: Mortgage Daily week-ahead forecast (June 22)

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

Hilton hotels carry an outsized share of CMBS distress. Nearly 16% of securitized debt tied to Hilton-branded hotels is delinquent, more than double the market average, with about $2.5B of the chain’s $15.9B CMBS balance behind, versus 7% for Marriott and 2.8% for Hyatt, per a KBRA report. Two San Francisco hotels alone account for roughly $725M of the delinquent balance.
Source: Bisnow (June 21)
Wall Street is piling into senior housing. Investors spent $12.1B on senior housing in the first quarter, the most of any quarter in at least 20 years per MSCI, making it the second-most-active property type behind data centers over the trailing year. The supply gap is stark: only about 2,500 new units started in Q4 2025 against more than 2 million people projected to turn 80 in 2026. Source: Bisnow (June 21)
Another Brooklyn building heads back to its lender. Clipper Realty expects to turn over the 12-story mixed-use building at 250 Livingston St. in Brooklyn to special servicer LNR Partners after defaulting last September. A small but telling marker in the steady drip of workouts on 2019-vintage commercial debt. Source: Commercial Real Estate Direct (June 22)

INDUSTRY NEWS

Two Harbors shareholders vote today on the CrossCountry deal. Two Harbors holds its special meeting June 23, with its board urging shareholders to approve the all-cash sale to CrossCountry Mortgage at $12.00 per share. The vote follows UWM’s decision to let a June 8-to-12 negotiating waiver expire without a revised bid, a contest watched closely because Two Harbors owns RoundPoint Mortgage Servicing.
Source: Two Harbors / BusinessWire (June 15) TWOHousingWire
FICO makes the revenue case for empathy in collections. A FICO piece argues that empathetic, data-driven, digitally personalized collections protect recovery and revenue better than aggressive tactics, since borrowers respond faster and more favorably to discreet, omnichannel outreach. The framing is increasingly relevant for servicers refining default and loss-mitigation strategies as FHA and VA rule changes push more loans through workouts. Source: FICO FICOSymend