Daily Dose of Real Estate for May 7

The housing data ain’t great. The Mortgage Bankers Association’s average 30-year contract rate is 6.45 percent, applications fell 4.4 percent WoW, and the average purchase loan hit a record $467,300 because first-time and lower-priced buyers are sitting this round out. Purchase applications are up 5 percent year-over-year but still 34 percent below the same week in 2019, and pending home sales are down 1.1 percent year-over-year and 30 percent below March 2019. New single-family median contract price fell to $387,400, the lowest since July 2021; Lennar’s realized average price including rate buydowns puts the price closer to $374,000, the lowest since 2017, with gross margin compressed to 15.2 percent from 26.9 percent in early 2022. The National Association of Realtors’ first-quarter report shows prices up year-over-year in 71 percent of metros while HousingWire shows 36 percent of listings cutting price — both true at the same time. On the policy and capital side, the Department of Housing and Urban Development eased environmental requirements in its multifamily underwriting manual; Fannie Mae issued its May Selling Guide update and reset the appraisal data standard timeline. United Wholesale Mortgage reported $44.9 billion in first-quarter originations while continuing its $12-per-share pursuit of Two Harbors. The UWM earnings report is worth a read — it was a mixed bag with some good industry trends and data.

The macro picture is good or bad depending on where you look. New York Fed President John Williams expects gross domestic product growth of 2 to 2¼ percent this year and has a base case for 2026 inflation at about 3 percent – with inflation back to 2 percent in 2027. Job openings held at 6.9 million, ADP reported private employers added 109,000 jobs in April, and unemployment is in the 4¼ to 4½ percent range – historically super low. A new Federal Reserve paper found that banks extending distressed commercial real estate loans generally required borrowers to put up more cash and pay down more principal as a condition of extension, which produced strong loan performance afterward — evidence against the view that banks have been quietly hiding losses. Less encouragingly, the Institute for Supply Management’s services prices-paid component has held at 70.7 for two consecutive months, a four-year high, with the survey chair stating that elevated input prices persist for months even if the Iran war ends tomorrow. The trade deficit widened to $60.3 billion in March on energy exports and AI-related equipment imports.

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

KEY TAKEAWAYS

• Mortgage rates plunge on Iran peace-deal reports. MND’s 30-year fixed dropped 10 bps to 6.44% on May 6 after Axios reported the U.S. and Iran are close to signing a memorandum of understanding to end the war.
• Wolf Richter: spring selling season is in tatters for the fourth year in a row. Purchase mortgage applications are 34% below the same week in 2019 — below even the spring-2020 lockdown trough — as the lock-in effect grinds on.
• New-home median price drops to $387,400, the lowest since July 2021. Census data show new SFH median price off 6.2% YoY and 15% from peak, while sales of new single-family homes ticked up 1.6% YoY as builders trade margin for volume.
• Fed FEDS paper pushes back on CRE “extend and pretend” narrative. David Glancy finds that post-Spring-2023 bank loan extensions tightened income and principal-paydown requirements, contributing to strong ex-post performance — not evergreening.
• Fannie Mae releases SEL-2026-05 and a UAD 3.6 timeline reset. May covers ROC, single-closing C-to-P modifications, IRS tax installment agreements, and co-op project eligibility; UAD 3.6 gets refreshed FAQs and an enhanced rollout schedule.
• HUD’s Mortgagee Letter 2026-04 eases FHA MAP environmental rules. Effective immediately for applications not yet at initial endorsement, four MAP Guide revisions are aimed at cutting cost and time.
• MBA applications fall 4.4% as 30-year contract rate hits 6.45%. Refis dropped 5%, but the average purchase loan size hit an all-time high of $467,300.
• NAR Q1 metro report: prices up in 71% of markets, national median +0.5% YoY to $404,300. Northeast led at +4.9% YoY; the West fell 2.9%.
• JOLTS holds steady at 6.9M openings; ADP private payrolls +109K in April. A modestly resilient picture ahead of Friday’s BLS jobs report.
• UWM Q1 2026: $44.9B originations (+39% YoY), $170.4M net income; Ishbia escalates Two Harbors fight.UWMC reaffirmed its $12/share offer and publicly slammed the TWO board.

RESIDENTIAL REAL ESTATE MARKETS

• Wolf Richter: spring selling season is the fourth dud in a row. Purchase mortgage applications dipped again in the latest MBA survey week and are 34% below the same week in 2019, below even the spring 2020 lockdown low; pending home sales for March were down 30% from March 2019, with the lock-in effect, too-high prices, and “normal-ish” mortgage rates all reinforcing the four-year freeze. (Wolf Street)
• New single-family home median contract price drops to $387,400, lowest since July 2021. Census data showed the median off 6.2% YoY, 11.2% from two years ago, and 15% from peak; the three-month average fell 3.8% YoY to $403,100, and Lennar’s actual realized price (with rate buydowns and other incentives included) cut to $374,000 in Q1 — the lowest since 2017 — at the cost of gross margin compression to 15.2%. (Wolf Street)
• New-home sales hold up while builder inventory remains historically elevated. New SFH sales rose 1.6% YoY to 64,000 in March (only 6% below March 2019, vs. existing-home sales down 22% over the same period); inventory at all stages of construction sits at 475,000, up 45% from March 2019, with Southern inventory up 60% and the South capturing 64% of national sales. (Wolf Street)
• Home prices increased in 71% of metro markets in Q1 2026. NAR reported the national median single-family existing-home price rose 0.5% YoY to $404,300, with 16 of 235 metros recording double-digit gains; Northeast +4.9%, Midwest +3.6%, South +0.2%, West -2.9%. (NAR)
• Inventory rises while homes sell faster, signaling improving liquidity. HousingWire data through May 1 shows national inventory up 2.3% YoY, absorbed listings up 17.5%, and new pendings up 10.7%; median list prices are still down 2.2% YoY with roughly 36% of listings carrying price cuts. (HousingWire)
• Redfin economists: rates likely range-bound until energy or labor break. In their May 4 weekly note, Chen Zhao writes that with three regional Fed presidents dissenting hawkish at the April FOMC and a more hawkish committee mix, mortgage rates will hold a narrow range until either the Iran energy shock resolves or labor data weakens further. (Redfin)

MORTGAGE MARKETS

• 30-year fixed drops 10 bps to 6.44% on Iran peace-deal reports. Per Mortgage News Daily, an Axios report at 4:50 a.m. ET that the U.S. and Iran are nearing a one-page memorandum of understanding to end the war kicked oil and bond yields into recovery mode, pulling MBS prices and mortgage rates lower. (MND)
• Tuesday’s MND wrap: rates edged just barely lower to 6.54%. May 5 commentary flagged that the bond rally was less than one-third the size of Monday’s sell-off, leaving lender rate sheets only modestly improved before Tuesday night’s overnight move. (MND)
• MBA: applications -4.4% for week ending May 1; refi share at 42.0%. Refis fell 5% (but were still 29% above year-ago), purchase apps fell 4%, and the average purchase loan size hit a record $467,300; the MBA 30-year conforming contract rate rose to 6.45%, the highest in a month. (HousingWire)
• MBA loan-mix details: FHA share rises to 17.7%, ARM share climbs to 8.8%. The VA share slipped to 14.9%, the average jumbo rate moved to 6.47%, the FHA contract rate rose to 6.12%, and 5/1 ARMs eased to 5.60%; refi share is the lowest since August 2025. (CUToday)
• Fannie Mae publishes SEL-2026-05. The May Selling Guide update covers remote online notarization requirements, single-closing construction-to-permanent loan modifications, IRS tax installment agreements, and co-op project eligibility. (Fannie Mae)
• Fannie Mae extends UAD 3.6 timeline and updates FAQs. The May 5 communication acknowledges adoption pressure in the lender and appraiser communities and pushes back implementation milestones with refreshed guidance. (Fannie Mae)

REGULATORY & POLICY DEVELOPMENTS

• HUD publishes Mortgagee Letter 2026-04 easing FHA MAP environmental requirements. The May 4 release formalizes four revisions to the Multifamily Accelerated Processing Guide and applies immediately to any FHA multifamily application not yet at initial endorsement; HUD framed the changes as compliance with Trump-administration deregulation orders. (Scotsman Guide)
• MBA issues statement on HUD MAP Guide updates. MBA welcomed the May 4 changes, which pick up many of the items Bob Broeksmit flagged in his April 2025 letter to HUD Secretary Scott Turner, including environmental, noise, and fall-zone provisions adding cost and time to multifamily projects. (MBA)
• Fed FEDS paper challenges CRE “extend and pretend” narrative. In a May 4 working paper, Fed economist David Glancy uses detailed supervisory data to show that bank CRE loan extensions predominantly address temporary payment frictions, and that following the Spring 2023 bank stress episode banks raised income and principal-paydown requirements — contributing to strong ex-post performance for extended loans. (Federal Reserve)
• MISMO releases BPM+ Reference Model Toolkit. The May 5 release is intended to accelerate standards-based process and decision modeling across the residential mortgage value chain. (MBA)
• Williams (NY Fed): rates “well positioned,” base case is 3% inflation in 2026. In a May 4 speech in New York, Williams said the FOMC’s hold at 3.50–3.75% appropriately balances dual-mandate risks given Middle East energy effects, with inflation expected to fall to 2% in 2027 and GDP at 2 to 2¼% this year and next. (NY Fed)

ECONOMIC NEWS

• JOLTS: 6.9M job openings in March, hires jump to 5.6M. The May 5 BLS release showed the job-openings rate steady at 4.1%, hires up 655,000 (rate to 3.5%), quits little changed at 3.2M, and a slight uptick in real estate quits (+19,000); job openings fell sharply in professional and business services (-318,000) and rose in finance and insurance (+98,000). (BLS)
• ADP: private payrolls +109,000 in April; pay growth eases to 4.4%. The May 6 release showed hiring at small and large employers, with softness in the middle; this is a meaningful step up from the 62,000 print in March. (PR Newswire)
• ISM Services PMI: 53.6 in April, Prices Paid stuck at 70.7. The May 5 release marked the 22nd consecutive month of expansion but New Orders fell 7.1 points to 53.5 (the steepest one-month drop of the cycle) and the price index held at a four-year high; ISM Chair Steve Miller cited the petroleum cost shock as a multi-month overhang regardless of when the Iran war ends. (Verified Investing)
• U.S. trade deficit widens to $60.3B in March. Imports rose 2.3% to $381.2B (autos +$3.6B, capital goods including computer accessories +$2.0B), exports up 2.0% to $320.9B led by crude and other petroleum products; the year-to-date deficit is still down 55% versus the same period in 2025. (BEA)
• NY Fed’s Williams: GDP at 2 to 2¼% this year and next. Williams expects unemployment to remain in the 4¼–4½% range and sees a new round of tariffs as additional upward pressure on import prices over coming quarters. (NY Fed)

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

• Fed FEDS working paper: bank CRE extensions are “amend,” not “pretend.” Glancy’s “Pretend or Amend? On Evergreening in CRE” finds extensions predominantly address temporary payment frictions, with post-Spring-2023 banks tightening — not loosening — income and principal-paydown requirements on extended loans, undercutting a core piece of the maturity-wall doom thesis. (Federal Reserve)
• Dwight Capital closes $130M HUD 223(f) cash-out refi for The Gardens Residences. The May 4 transaction refinances a 358-unit luxury high-rise in Downtown North Miami, retiring an existing Dwight Mortgage Trust bridge loan, returning equity, and converting to a 35-year fully amortizing fixed-rate loan. (Connect CRE)
• Walker & Dunlop arranges $55.16M for Belle Oaks Marketplace Phase I. The May 4 floating-rate, interest-only construction loan from Genesis Capital funds the first phase of a mixed-use redevelopment in Richmond Heights, Ohio, on behalf of DealPoint Merrill. (Connect CRE)
• Bisnow: federal government in talks with 1,500 landlords over pandemic-era eviction-ban suits. The May 4 report describes federal mediators seeking a global settlement framework with multifamily owners who allege uncompensated takings under the CDC moratorium. (Bisnow)
• AI-driven application fraud is hitting apartment owners. A May 3 Bisnow piece documents how generative-AI tools are escalating fake pay-stub, ID, and bank-statement submissions, with operators investing in verification stacks to compensate. (Bisnow)
• Japanese capital is rapidly becoming NYC multifamily’s dominant cross-border bidder. TheRealDeal reports Japan-linked firms have acquired at least $2.1B of NYC property since 2024 — including 326 multifamily units across $233M — driven by yield differentials, cheap home-market financing, and a Japanese tax code that allows accelerated depreciation of older wood-frame buildings. (TheRealDeal)

INDUSTRY NEWS

• UWM Q1 2026: $44.9B in originations (+39% YoY), $170.4M net income. Total revenue was $901.4M and adjusted EBITDA $160.9M, with the gain margin at 1.23% and MSR UPB at $229.5B; the board declared its 22nd consecutive $0.10 quarterly dividend. (Stock Titan)
• Ishbia escalates Two Harbors M&A fight. On the May 6 earnings call, Ishbia held UWM’s top offer at $12/share, said TWO management and board are “not additive to value,” and reiterated that the strategic prize is the MSR book and the shareholder base — not the operating team. (Motley Fool)
• CrossCountry Mortgage defends $10.80/share Two Harbors deal, questions UWM bid. CCM said it already holds roughly half of the 53 required regulatory approvals, is targeting an August close, and argues UWM would have to start the process from scratch; CCM also paid the $25.4M termination fee that unwound the prior UWM deal. (HousingWire)
• Lennar realized average home price falls to $374,000 — lowest since 2017. Q1 disclosures show the homebuilder absorbed rate buydowns and incentives in gross margin (down to 15.2% from 26.9% in Q1 2022), prioritizing volume and market share over per-unit profitability — a template more public builders are likely to follow as the spring season fails to materialize. (Wolf Street)
• Fannie Mae publishes SEL-2026-05 and updates UAD 3.6 timeline. Two distinct policy releases this week — May 6’s Selling Guide update and May 5’s UAD 3.6 enhanced timeline with refreshed FAQs — give correspondent and retail lenders fresh implementation work for the back half of 2026. (Fannie Mae)
• MISMO publishes BPM+ Reference Model Toolkit. The May 5 release accompanies an updated Life of Loan Model from April 30, continuing MISMO’s push toward standards-based process and decision modeling that lenders can layer onto AI and orchestration tools. (MBA)