Daily Dose of Real Estate for May 11

Last week delivered a new round of contradictory economic data. April payrolls came in at +115,000 against a 65,000 consensus, unemployment held at 4.3%, and February’s already-weak print was revised down another 23,000 to a 156,000 job loss. Mortgage News Daily’s 30-year fixed closed Friday at 6.42%, down two basis points on the week. Redfin reported pending home sales at their highest level since September 2022, up 7.7% year-over-year — and simultaneously noted that just 26.4% of homes sold above list, the lowest share for this time of year in at least five years, with the typical home taking 43 days to close. MBA applications fell 4.4%. Trepp’s April CMBS delinquency rate ticked down one basis point to 7.54% while multifamily delinquencies jumped 56 basis points to a fresh high of 7.71%. Office held at 11.69%, which now apparently qualifies as stability. The Fed’s Financial Stability Report identified stretched asset valuations as the leading near-term risk, a finding it has reached in roughly every report since 2021.

On the Fed policy front, Gov Bowman used her Hoover Institution remarks to observe that Basel III pushed $1.4 trillion in corporate lending out of regulated banks and into private credit — a development the Fed is now studying, fifteen years after writing the rules that caused it. Gov Waller announced the twelve regional Reserve Banks have agreed to centralize back-office functions, which is the kind of thing one announces three weeks before a new chairman’s confirmation hearing. HUD issued ML 2026-04 simplifying environmental requirements in the MAP Guide. The Soloviev Group refinanced 9 West 57th Street for $1.8 billion at 4.97% and pocketed $526 million in the process – note: trophy offices like this are doing fine…everything else is not. CrossCountry raised its all-cash bid for Two Harbors to $12 per share, deepening a contested takeover fight that has now eclipsed the original UWM deal price by roughly 20%. Carrington is acquiring Valon Mortgage and its 800,000-loan servicing book. Treasury auctions $125 billion in coupons this week.

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

KEY TAKEAWAYS

• MND 30-year fixed closed Friday at 6.42%, down two basis points week-over-week, with bond volatility easing as Iran headlines faded. Mortgage News Daily
• BLS April payrolls rose 115,000, well above the 65,000 consensus; unemployment held at 4.3%; February revised down to a 156,000 loss. BLS
• Redfin: pending home sales reached their highest level since September 2022, up 7.7% YoY in the four weeks ending May 3. Redfin
• MBA weekly applications fell 4.4% for the week ending May 1, with refinance share at its lowest since August 2025. Mortgage News Daily summary
• Fed Financial Stability Report (May 8) identifies stretched market valuations as the top near-term risk; CRE prices continue to stabilize but refinancing risk persists. American Banker
• HUD issued Mortgagee Letter 2026-04, revising environmental requirements in the Multifamily Accelerated Processing (MAP) Guide. Housing Online summary
• Treasury to sell $125 billion in government bonds this week. Treasury Dept will auction $58B in 3-year notes today, $42B in 10-year notes Tuesday, and $25B in 30-year bonds Wednesday — keeping borrowing volumes steady from the prior quarter. These auctions direct mortgage rates. U.S. Treasury
• Soloviev Group closed a $1.8B refinancing of 9 West 57th Street at 4.97%, led by Bank of America with Wells Fargo and Citi; CMBS execution expected late May. Commercial Observer
• CrossCountry raised its all-cash bid for Two Harbors to $12.00/share, deepening the contested fight with UWM ahead of the May 19 TWO shareholder vote. SEC 8-K
• Carrington Mortgage Services is acquiring Valon Mortgage, adding ~800,000 loans and ~$197B UPB and adopting the ValonOS servicing platform as its core system. Scotsman Guide
• Trepp: CMBS delinquencies down 1 bp to 7.54% in April, but multifamily rose 56 bps to a fresh high of 7.71%; office held at 11.69%. Connect CRE

RESIDENTIAL REAL ESTATE MARKETS

• Pending home sales hit highest level since September 2022. Redfin reported seasonally adjusted pending sales rose 7.7% YoY in the four weeks ending May 3, driven by a temporary dip in rates and inventory near a five-year high. Median monthly housing payment fell 2.2% YoY to $2,606. Redfin
• Spring momentum modest but uneven. Just 26.4% of homes sold above list price — the lowest share for this time of year in at least five years — and the typical home spent 43 days on market, three days longer than a year ago. Inman
• Realtor.com weekly: inventory builds, absorption improving. For the week ending May 2, inventory continued to climb but at a slowing pace as buyers absorbed available supply; new listings remained near their highest volume in nearly a year. HousingWire
• NAR releases April existing-home sales today at 10 a.m. ET. March printed at a 3.98 million SAAR (-3.6% MoM), with median price at $408,800 (+1.4% YoY) and 4.1 months of supply. NAR
• Wolf Street: existing-home sales hit their lowest level since 1995. Existing-home sales fell 24% below 2019 volumes for a third consecutive year, down 34% from the 2021 peak and 43% from the 2005 all-time high — a structural freeze the spring season has not broken. Wolf Street
• Pandemic boom markets face a new affordability squeeze. Tampa’s median sales price fell nearly 4% YoY in 2025, the steepest annual drop among major metros, even as the effective tax rate jumped 13% — the ninth-highest increase nationally, per Attom data cited in The Real Deal’s Friday digest. The Real Deal

MORTGAGE MARKETS

• MND 30-year fixed ends week at 6.42%. After Monday’s spike to a one-month high, Wednesday’s 10 bp drop and smaller declines Tuesday and Friday left the index down 2 bps on the week from 6.44%; Iran-related volatility was meaningfully lighter. Mortgage News Daily
• MBA: applications fall 4.4% for week ending May 1. Both purchase (-4% WoW, +5% YoY) and refi (-5% WoW, +29% YoY) activity declined as the 30-year contract rate rose to 6.45% from 6.37% — the highest in a month. Refi share fell to its lowest since August 2025. Mortgage News Daily summary
• Bond market reaction to jobs report stays muted. The unemployment rate, now the market’s preferred labor signal, came in at 4.3% — in line with expectations — and the upside surprise on payrolls had no material impact on rates. Mortgage News Daily
• Treasury holds quarterly refunding at $125 billion. This week’s coupon auctions: $58B in 3-year notes (today, May 11), $42B in 10-year notes (Tuesday), $25B in 30-year bonds (Wednesday); all settle Friday, May 15. Treasury maintained “at least” guidance, signaling no coupon-size increase before early 2027. U.S. Treasury
• Fannie Mae multifamily originations surge 45% YoY in Q1. The GSE funded 669 multifamily loans for $17.1 billion in the first quarter, up from $11.8 billion a year earlier — front-loading activity against the $176 billion combined 2026 cap. Commercial Real Estate Direct
• Nonbank mortgage lender employment hits lowest since 1997. BLS data show employment at nonbank mortgage lenders fell 40% from the mid-2021 peak to 176,700 in March; broker employment is down 38% from April 2021. Combined headcount is down 163,000 — the lowest since May 2012 — reflecting four consecutive years of frozen origination and refi volumes. Wolf Street

REGULATORY & POLICY DEVELOPMENTS

• Fed releases Financial Stability Report (May 8). Stretched asset valuations remain the top near-term risk; the Treasury market saw initial liquidity deterioration during recent volatility before recovering. CRE prices continued to stabilize, though refinancing risk persists for borrowers with upcoming maturities. American Banker Federal Reserve report PDF
• HUD Mortgagee Letter 2026-04 revises MAP environmental rules. The letter removes railroad vibration review requirements, updates setback rules for pressurized pipelines and high-voltage transmission lines, and provides new guidance defining noise-sensitive outdoor uses — intended to simplify environmental review and clarify underwriting expectations. Housing Online
• FDIC rescinds re-presentment guidance. FIL-14-2026 withdraws FIL-32-2023, which the agency concluded was “overly broad in scope” and created uncertainty over when disclosures could raise UDAP concerns under Section 5 of the FTC Act. Consumer Finance Monitor
• CFPB OIG opens review of workforce and contracting moves. The Office of Inspector General disclosed it is reviewing whether the agency’s workforce and contracting actions have affected its statutory mission-related activities and support functions. Consumer Finance Monitor
• Federal Reserve speeches Friday: Bowman, Waller, Cook. Vice Chair for Supervision Bowman spoke on the migration of corporate lending; Governor Waller addressed Federal Reserve Bank operations; Governor Cook delivered remarks on tokenization and its implications for the financial system. Federal Reserve
  • Bowman: bank rules pushed $1.4T in corporate lending into shadow markets. At the Hoover Institution Monetary Policy Conference, Vice Chair for Supervision Bowman said the bank share of corporate lending fell from 48% in 2015 to 29% in 2025, with most volume migrating to private credit funds and BDCs. She called Basel III’s current risk weights a “perverse incentive” — banks get better treatment for lending to a private credit fund than directly to the same corporation — and proposed a recalibration. The Fed will also start requiring banks to report more detail on the nonbanks they lend to. Federal Reserve
  • Waller: 12 regional Feds agree to centralize back-office operations. Also at Hoover, Waller announced a framework to consolidate HR, IT, and risk management across the Reserve Banks, with one bank handling each function for the whole system. He framed it as protecting Fed independence by demonstrating responsible use of public resources — preemptive housekeeping with Warsh’s chair confirmation hearing set for May 15. Federal Reserve
  • Cook: tokenization complements traditional finance, doesn’t replace it. Speaking in Dakar, Cook said U.S. tokenized assets have roughly doubled to ~$25 billion over the past year, with collateral and liquidity management as the leading use case. She flagged cybersecurity and supervisory gaps as 24/7 settlement scales, but framed tokenization as friction-reducing rather than disruptive. Matters for housing finance as the same infrastructure is applied to tokenized MBS and mortgage notes. Federal Reserve
• House Financial Services to mark up Wednesday, May 13. Chairman Hill’s Committee schedule for May also includes a National Security/Illicit Finance subcommittee hearing on BSA modernization (May 19) and Digital Assets and Capital Markets subcommittee hearings May 20. House Financial Services Committee
• Second Circuit reaffirms preemption of NY mortgage escrow interest law. In a decision issued May 5, the panel held in Cantero v. Bank of America that NY’s General Obligations Law § 5-601 — requiring lenders to pay at least 2% interest on escrow accounts — is preempted by the National Bank Act as applied to national banks. Consumer Finance Monitor
• Prosperity Now study: VantageScore 4.0 delivers 41% better risk differentiation under stress. The independent loan-level analysis of Fannie Mae and Freddie Mac data across a ten-year window — including COVID — found VantageScore 4.0 more accurately rank-orders mortgage borrower risk than the incumbent FICO model, with the largest performance gap appearing in stress periods and at the top of the score distribution. The study also concludes that “gaming” risk in a two-score system is a myth: when FICO scored a loan high and VantageScore scored it low, the loan was riskier; the reverse pairing carried equivalent risk. The findings land directly in the middle of the FHFA/HUD VantageScore 4.0 rollout announced April 22. VantageScore

ECONOMIC NEWS

• April nonfarm payrolls +115K, beating 65K consensus. Health care led with 37,000 jobs added; transportation/warehousing added 30,000. Federal employment fell another 9,000 and is now down 348,000 from its October 2024 peak. February revised down to -156,000; March revised up to +185,000. BLS
• U-6 underemployment rises to 8.2%. Those working part-time for economic reasons rose by 445,000 to 4.9 million; labor force participation slipped to 61.8%, the lowest since October 2021. The household survey showed a 226,000 decline in employment, diverging from the establishment survey. CNBC
• KPMG: payroll strength may harden Fed hawks. Diane Swonk’s team noted three Fed presidents dissented in April in favor of removing easing-bias language, and that the firm now expects two Fed rate hikes in response to stickier inflation tied to the Strait of Hormuz closure. KPMG
• TBAC: 2026 GDP rebounded to 2.0% in Q1 after Q4’s shutdown-depressed 0.5%, with AI-related investment a major growth contributor. Oil prices remain up ~60% since the start of the Iran conflict; one-year inflation swaps in the U.S. have risen ~75 bps. U.S. Treasury TBAC report
• CPI release next week. April CPI is scheduled for release Tuesday, May 13, and is the next major data point for both rate watchers and the Fed.

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

• Soloviev Group closes $1.8B refi at 9 W. 57th Street. Bank of America led with Wells Fargo and Citi; the five-year, interest-only fixed-rate loan came in at 4.97% and replaces a 2016 JPMorgan-led $1.2B mortgage. Soloviev expects to take out roughly $526 million in cash. The deal is expected to enter the CMBS market in late May. Commercial Observer
• Trepp: CMBS delinquencies inch down 1 bp to 7.54% in April. Office declined 2 bps to 11.69%; lodging dropped 79 bps to 6.52%; retail fell 31 bps to 6.31%; industrial rose 31 bps to 0.96%. Multifamily jumped 56 bps to a new high of 7.71%, driven by two large loans (one San Francisco, one New York) going 30 days delinquent. Connect CRE
• CBRE Q1 multifamily figures. U.S. multifamily vacancy fell 20 bps to 4.8% in Q1 as net absorption outpaced completions for the first time in three quarters; rents rose 0.2% YoY to $2,217. Investment volume of $29.5B was down 6% YoY but construction completions fell 30%. CBRE
• Walker & Dunlop Investment Partners: bridge demand rising. CIO Marcus Duley said valuations on many deals are at or just below developer cost basis, creating bridge-financing demand as borrowers seek more time; the firm sees CRE-focused private credit differentiated from corporate private credit by ongoing refinancing pressure. Multi-Housing News
• $797B in commercial mortgages maturing in 2026. Trepp data show approximately 16% of the $5.03 trillion universe of income-producing-property loans come due this year, with banks holding the largest share. Commercial Real Estate Direct

INDUSTRY NEWS

• CrossCountry raises Two Harbors bid to $12.00/share all cash. The amended agreement announced May 8 increases per-share consideration from $11.30, with a $3.4B fully committed financing package and HSR clearance reportedly complete. TWO’s board reaffirmed its unanimous recommendation ahead of the May 19 shareholder vote. The transaction is expected to close in Q3 2026, displacing UWM’s December all-stock agreement. SEC 8-K
• UWM challenges CrossCountry deal. Pontiac-based UWM has sent a series of letters directly to Two Harbors shareholders in late April and early May arguing its all-stock proposal represents superior value, raising the prospect of a contested vote. Mortgage Professional America
• Carrington to acquire Valon Mortgage, adding 800,000 loans and adopting ValonOS. Carrington Mortgage Services, in collaboration with a private equity partner, is buying Valon Mortgage in a deal that adds roughly $197 billion in unpaid principal balance — primarily subserviced loans — to its servicing portfolio. As part of the strategic partnership, Carrington will implement Valon Technologies’ AI-native ValonOS as its core servicing platform; Carrington CEO Andrew Taffet called it “the future of Ginnie Mae servicing technology,” and Valon’s leadership framed the structure as a pivot to operate as a pure technology company powering the industry rather than exiting it. Scotsman Guide
• Apple Hospitality REIT raises 2026 RevPAR outlook. The lodging REIT lifted guidance after strong Q1 hotel demand in Nashville, Seattle, and leisure markets, a notable counterpoint to broader hospitality softening. CRE Daily
• Newmark closes $207M industrial portfolio sale. Announced last week as part of a broader uptick in logistics trades; the brokerage also represented BXP in the $132M Needham office campus sale (Wellington Management-anchored) earlier this year. Law360 Real Estate Authority
• Torti Gallas + Partners acquires Wiencek + Associates. The D.C.-based architecture firm closed the acquisition effective May 1; founder Michael Wiencek joins TG+P as executive principal. Bisnow D.C.