First-time homebuyers that are storming the housing market need to make sure they don’t trip over their student loan payments book – collections restart today for 5.3 million defaulted borrowers. Treasury Secretary Bessent preaches a harvest of economic prosperity at the Milken Institute Conf. CRE sales and originations get a nice lift. Let’s get you caught up and out the door in 3 minutes. Tim 

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Key Takeaways

• First-time homebuyers accounted for a record 58% of agency purchase lending in Q1 2025, with Gen Z buyers representing one in four FTHB loans 1
• Weekly pending home sales disappointed at the end of April, with 10% fewer transactions than the same week in 2024 2
• Year-over-year home price growth slowed to 2.5% in March 2025, down from 2.9% in February 3
• Housing inventory has surged to 744,000 single-family homes on the market nationwide, representing a 33% increase from last year 2
• Treasury Secretary Scott Bessent outlined the administration’s economic agenda at the Milken Institute Global Conference yesterday, highlighting tariffs, tax cuts, and deregulation 4
• The Department of Education begins collecting on defaulted student loans today, affecting 5.3 million borrowers 5
• Depositories topped the list of CRE capital sources in 2024, followed by life insurance companies, pension funds, CMBS, and GSEs
• Dedicated mortgage bankers originated $411 billion in CRE loans, showing a 34% increase from 2023

Residential Real Estate Markets

Overview: The U.S. housing market is experiencing a significant transformation as inventory levels continue to rise, potentially ending the pandemic-era shortage. This inventory growth is finally beginning to impact home prices, which had remained resilient despite weak demand in recent years.

• Inventory Growth: 744,000 single-family homes are now available for sale nationwide, representing a 33% increase from last year and the highest level since before the pandemic 2
• Sales Decline: Weekly pending transactions were down 10% compared to the same period in 2024, with single-family home sales decreasing by 8.7% and condo sales plummeting by 19% 2
• Price Moderation: The median price of newly pending sales fell to $395,000, marking the first negative year-over-year reading in nearly two years 2
• Regional Variations: Northeast markets continue to show remarkable resilience, with Rhode Island, Connecticut, and New Jersey all posting year-over-year price growth at or above 7%, while western states like Utah and Idaho saw prices drop 2.1% and 2.2%, respectively 3
• Inventory Recovery: Inventory deficits compared to pre-pandemic levels (2017-2019) have improved substantially, falling to -20% in March from -38% a year ago, with new listings up 10% year-over-year 1
• Price Reductions: 36.5% of homes on the market experienced price cuts by the end of April, up 60 basis points from the previous week, indicating significantly weaker price pressures than at any point since 2022 2

Mortgage Markets

Overview: The mortgage landscape is being reshaped by the growing influence of first-time homebuyers, who now account for a record share of agency purchase lending. Mortgage rates have shown modest improvement, providing some relief for potential homebuyers.

• First-Time Buyer Dominance: First-time homebuyers accounted for a record 58% of agency purchase lending in Q1 2025, while repeat buyer activity has softened markedly from pre-pandemic levels, with originations among this group down 31% compared to 2018-2019 1
• Rate Improvement: The average 30-year fixed rate decreased to 6.78%, down 8 basis points from the previous week, while 15-year fixed rates fell to 5.95%, a decrease of 13 basis points 6
• Down Payment Disparities: The average first-time homebuyer in March put down $49,000 on their home purchase, significantly below the $134,000 average among repeat buyers 1
• FHA Popularity: First-time homebuyers using FHA loans averaged just $16,000 in down payments, while those qualifying for VA mortgages had even lower average down payments of just under $10,000 1
• Delinquency Trends: The national delinquency rate dropped by 32 basis points to 3.21% in March—the lowest figure since May 2024 and only 29 basis points above the record low of 2.92% set in March 2023 7
• Foreclosure Activity: 213,000 loans were in active foreclosure at the end of Q1 2025—a 4% rise from a year ago and the first annualized increase in nearly two years, with VA foreclosures surging 54% after a moratorium ended 7

Economic & Political News

Overview: Treasury Secretary Scott Bessent delivered a significant speech outlining the Trump administration’s economic roadmap, while the Federal Reserve prepares for its May meeting. Recent employment data shows moderating wage growth amid complex economic conditions.

• Bessent’s Economic Vision: At the Milken Institute Global Conference yesterday, Treasury Secretary Bessent highlighted tariffs, tax cuts, and deregulation as the three core components of Trump’s economic agenda, making an explicit appeal to investors 4
• Trade Negotiations: Bessent expressed optimism about imminent trade deals, stating “We are very close to some deals” that could come “maybe as early as this week,” with “substantial progress in the coming weeks” possible with China 4
• Fed Meeting: The Federal Reserve is expected to maintain the federal funds rate at 4.25-4.5% during its May 6-7 meeting, as policymakers weigh inflation concerns against potential economic slowdown from tariffs 8
• Employment Data: Compensation costs for civilian workers increased 3.6% for the 12 months ending March 2025, down from 4.2% for the year ending in March 2024, while nonfarm payroll employment increased in 13 states and remained essentially unchanged in 37 states 9
• Economic Resilience: The April jobs report demonstrated stronger-than-expected numbers for both job growth and unemployment, providing some reassurance about economic resilience despite market volatility 6

Student Loan Collections Restart

Overview: Today marks a significant turning point as the Department of Education begins collecting on defaulted student loans for the first time in five years. This policy shift will affect approximately 5.3 million borrowers and could create additional barriers to homeownership for first-time buyers.

• Collection Resumption: The Department of Education begins collecting on defaulted student loans today, subjecting 5.3 million borrowers to wage garnishments and the seizure of tax refunds and Social Security benefits 5
• First-Time Buyer Impact: Renewed collections will make it harder for younger borrowers to save for down payments while also making it more difficult to qualify for mortgages due to higher debt-to-income ratios, likely delaying homeownership goals 5
• Credit Score Effects: The New York Federal Reserve recently estimated that more than 9 million borrowers could face “significant drops” in their credit scores when delinquencies resume over the first half of 2025 10
• Rental Market Implications: Many landlords routinely check credit reports for prospective tenants, and the resumption of student loan collections could lead to denied rental applications, particularly problematic given that renting has become increasingly more affordable than buying 11
• Affordability Context: The average home value in the U.S. is $357,138, up 2.6% year over year, while mortgage rates averaged 6.45% in March, creating significant barriers for entry-level buyers even before student loan collections resumed 12

Industry News

Overview: The real estate industry continues to innovate with new marketing campaigns, technological solutions, and strategic hires. These developments reflect adaptation to changing market conditions and regulatory environments.

• Realtor.com Campaign: Realtor.com has launched a major national advertising campaign featuring Reba McEntire, titled “Nearly Home,” which incorporates sitcom-style ads that draw on real buyer experiences and marks the company’s largest brand investment in nearly three decades 13
• Mortgage Servicing Technology: Sagent has unveiled a new digital portal designed to streamline foreclosure and default management processes, featuring real-time data access, document sharing, and communication capabilities for law firms handling foreclosure and default cases 14
• Regulatory Strategy: Newrez LLC has appointed Mark McArdle, a former executive at the Consumer Financial Protection Bureau (CFPB), to a newly created position focused on regulatory relations, leveraging his extensive experience in shaping mortgage policy 15
• Single-Family Rental Development: Crescent Communities has announced plans to develop HARMON Cedar Run, a 151-unit single-family rental project in Lawrenceville, Georgia, as part of a $345 million joint venture with Heitman 16
• GSE Performance: Freddie Mac reported $2.8 billion in net income for Q1 2025, driving the company’s net worth to $62 billion, while helping 313,000 families buy, rent, or refinance homes during the quarter, with 52% of single-family loan purchases supporting first-time homebuyers 17

Commercial Real Estate Markets (including Multifamily)

Market Overview: Commercial real estate showed mixed performance across sectors in Q1 2025, with multifamily and industrial demonstrating resilience while office continues its recalibration. Total CRE lending reached $498 billion in 2024, with nearly $1 trillion in loans maturing this year.

Office Sector

• Office sales hit $10.1 billion in Q1 2025, marking a 48.5% increase year-over-year with 61.6 million square feet traded
• Average sale price per square foot rose to $181.46, reflecting a 13.7% increase from the previous quarter
• Early Q2 trends show transactions averaging $536.74 PSF, indicating strong appetite for premium office assets
• Piedmont Office Realty Trust suspended dividends for the first time in 15 years to conserve $60 million annually for tenant improvements
• Over 10% of Piedmont’s tenants have signed leases but are not yet paying rent, potentially boosting annual revenue by $67 million in the future

Multifamily Sector

• Apartment sales volume reached $30 billion in Q1 2025, a 7% year-over-year increase marking four consecutive quarters of improvement
• Individual asset sales surged 39% to $25.7 billion, while apartment prices declined slightly by 0.9%
• Cap rates remained stable at 5.7%, with mid- and high-rise properties showing particular strength
• Multifamily lending dominated 2024 CRE activity, accounting for $326 billion of the $498 billion total volume
• NYC’s multifamily market demonstrated resilience with deal volume rising 11% year-over-year in Q1 despite economic headwinds

Industrial & Self-Storage

• E-commerce continues to bolster industrial real estate demand despite tariff-related challenges
• Industrial rents increased 6.8% year-over-year nationally, with the Sun Belt region showing notable growth
• National industrial vacancy rates have reached 8.5%, expected to stabilize once tariff negotiations conclude
• Phoenix is emerging as a key hub for industrial development, particularly for data centers
• Self-storage chains report significant growth in early 2025, driven by high housing prices and evolving work lifestyles

Financing & Servicing

• Depositories topped the list of CRE capital sources in 2024, followed by life insurance companies, pension funds, CMBS, and GSEs
• Dedicated mortgage bankers originated $411 billion in loans, showing a 34% increase from 2023
• MBA is advocating for Congress to update FHA multifamily loan limits through the bipartisan Housing Affordability Act
• CMBS delinquency rates continued their upward trend in March 2025, driven primarily by office and retail properties
• Special servicing transfers have increased for several office, mixed-use, and retail loans as borrowers struggle with higher interest rates
• MBA’s Commercial/Multifamily Finance Servicing and Technology Conference is scheduled for May 18-21, 2025, in Hollywood, Florida