There are now over a million homes for sale in the U.S. Buyers are lacing up for open houses and bargains this weekend. Wallet-busting $2,775 avg mortgage payments will be a factor. Meanwhile, the “Most Shocking Premium Increase” award goes to Florida! with homeowners paying nearly triple the national average for property insurance. Fed sees little risk from waiting – rate cuts later this year likely. Let’s get you caught up and out the door in 3 minutes. Tim 

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Key Takeaways

• Housing inventory has reached its highest level since 2019, with over 1 million homes for sale nationwide, representing a 31.1% year-over-year increase. This milestone marks the 78th consecutive week of annual inventory gains, providing much-needed relief to a supply-constrained market. 1
• The median U.S. monthly housing payment hit an all-time high of $2,775 in April 2025, up 9.1% year-over-year, driven by elevated mortgage rates and rising home prices. This affordability challenge has contributed to declining sales activity across many markets. 2
• Homeowners insurance premiums surged 21.8% nationally in the past year, with southern states experiencing increases of up to 50% due to more frequent and severe weather events. Florida homeowners now pay an average annual premium of $7,780, more than three times the national average of $2,400. 3
• Mortgage rates remain stable at 6.76% for 30-year fixed loans, unchanged from last week and approximately 30 basis points lower than the same time last year, providing a consistent environment for homebuyers despite economic uncertainties. 4
• Mortgage purchase applications jumped 11.1% week-over-week, the largest increase since January, suggesting growing buyer activity as the spring market gains momentum despite persistent affordability challenges. 5
• The Federal Reserve maintained its benchmark interest rate at its May 7 meeting, with MBA economists projecting the first rate cut in September 2025 as inflation continues to moderate. This timeline suggests that mortgage rate relief may still be several months away. 6

Residential Real Estate Markets

The spring housing market shows significant improvement in inventory while affordability challenges continue to intensify. The combination of high mortgage rates, rising home prices, and surging insurance costs is creating a complex landscape for buyers and sellers alike, with regional variations becoming increasingly pronounced.

• Record Inventory Growth: Active inventory climbed 31.1% year-over-year, with over 1 million homes for sale – the highest since December 2019. This milestone represents a significant shift from the extreme inventory shortages experienced during the pandemic years, though levels still remain below pre-pandemic norms in many markets. 1
• New Listings Surge: New listings rose 9.3% year-over-year, reaching the highest level since mid-2022. This influx of fresh inventory provides buyers with more options as they navigate the market, particularly in the Midwest and Northeast regions where supply has been especially constrained. 1
• All-Time High Housing Costs: The median U.S. monthly housing payment reached $2,775 in April 2025, up 9.1% year-over-year, driving pending home sales down 5.8%. This record high payment reflects the combined impact of elevated mortgage rates and rising home prices, creating significant barriers to entry for many prospective buyers, especially first-time homebuyers. 2
• Insurance Premium Spike: Homeowners insurance premiums increased 21.8% nationally in the 12 months ending March 2025, with Florida homeowners now paying an average annual premium of $7,780 – more than three times the national average. This surge is primarily driven by more frequent and severe weather events, rising construction costs, and higher claim payouts, creating an additional layer of financial burden for homeowners in climate-vulnerable regions. 3
• Slower Market Pace: Homes are spending 4 days longer on market compared to last year, giving buyers more time to make decisions. While this represents only a modest slowdown, it does provide buyers with valuable additional time to consider their options in a market that remains relatively fast-paced by historical standards. 1
• Luxury Market Cooling: Luxury homes now take an average of 319 days to sell (compared to the national median of 60 days) and typically sell for about 13% below their initial listing price. This gap widens further for properties that remain on the market longer than 180 days, highlighting the importance of realistic pricing in the high-end segment. 7

Mortgage Markets

Mortgage rates have stabilized while application activity shows encouraging signs of improvement. This stability provides a consistent environment for homebuyers, though rates remain significantly higher than the sub-3% levels seen during the pandemic. Recent application data suggests buyers may be adjusting to the current rate environment.

• Steady Mortgage Rates: The 30-year fixed rate held at 6.76%, unchanged from last week and approximately 30 basis points lower than the same time last year. This stability comes despite ongoing economic uncertainties, particularly surrounding the impact of recently announced tariffs, providing a consistent environment for homebuyers planning their purchases. 4
• Purchase Applications Jump: Mortgage purchase applications increased 11.1% week-over-week, the largest increase since January, suggesting growing buyer activity despite affordability challenges. This surge indicates that despite persistent affordability challenges, buyers are becoming more active in the market, potentially spurred by the combination of stable rates and increased inventory. 5
• Home Repair Cost Surge: Home repair costs have risen 61% since 2015, significantly outpacing general inflation and adding another layer of consideration for prospective homebuyers. This trend is especially pronounced in labor-intensive categories such as vinyl window replacements and garage door installations, creating additional financial considerations for those purchasing older homes or fixer-uppers. 8

Economic & Political News

The Federal Reserve continues to hold rates steady while carefully monitoring inflation and employment data. Recent economic indicators show progress toward lower price growth, though concerns about the impact of new tariffs loom large. Meanwhile, proposed budget cuts to housing programs could significantly reshape the affordable housing landscape.

• Fed Holds Rates: The Federal Reserve maintained its benchmark interest rate at its May 7 meeting, marking the third consecutive hold as policymakers continue to monitor economic conditions. While acknowledging that inflation has eased over the past year, the Fed noted that it remains elevated and that the risks to achieving their dual mandate are roughly in balance. 6
• Rate Cut Projection: MBA Chief Economist Mike Fratantoni projects the first rate cut will likely occur in September 2025, with a total of two 25-basis-point cuts expected by the end of the year. This timeline suggests that meaningful mortgage rate relief may still be several months away, though markets will likely begin pricing in these expectations in advance. 6
• Tariff Concerns: Fed Chair Jerome Powell acknowledged that recently announced tariffs could create tension between the Fed’s dual mandate if they simultaneously weigh on economic growth while boosting inflation. This potential stagflationary scenario could complicate the Fed’s policy decisions in the coming months, with implications for interest rates and mortgage markets. 9
• Stable Inflation Expectations: The 25-year expected inflation rate remains at 2.42% as of April 2025, suggesting long-term inflation expectations remain anchored near the Fed’s 2% target despite tariff concerns. This stability in long-term expectations provides some reassurance that inflation pressures may not become entrenched, though near-term volatility remains a concern. 10
• HUD Budget Cuts: The Trump administration’s budget proposal for fiscal year 2026 calls for a 43.6% reduction in HUD’s budget, from $77 billion to $43.5 billion, eliminating several programs including the $3.3 billion Community Development Block Grant and the HOME Investment Partnerships Program. HUD Secretary Scott Turner has stated that these changes will “thoughtfully consolidate and streamline existing programs” while shifting more responsibility to state and local governments. 11

Commercial Real Estate Markets (including Multifamily)

CMBS Market Overview: Q1 2025 shows strong recovery with increased issuance, though loan losses are rising and severity rates continue to climb.

• CMBS issuance jumped 110% in Q1 2025 compared to the same period last year, primarily driven by single-borrower deals, indicating renewed investor confidence1
• March loan losses reached $157.5 million across six loans with $128 million in total losses, representing an 81.27% average loss severity—significantly higher than February’s 47.87%1
• The 12-month moving average loss severity increased to 62.97%, up from 61.96% in February, showing a concerning trend1
• Office-backed loans now comprise 16.13% of CMBS conduit collateral, up from 13.03% a year prior, reflecting both opportunity and ongoing sector risk2

Multifamily Sector Overview: Developers remain cautious with declining production index but stable occupancy rates, as construction slows nationwide.

• Multifamily Production Index decreased three points to 44 year-over-year, marking the seventh consecutive quarter below the break-even point of 50, indicating persistent developer caution3
• Despite production concerns, the Multifamily Occupancy Index remains strong at 82, only slightly below Q1 2024’s reading of 83, suggesting stable demand for existing units3
• More than half of developers reported supplier price increases due to announced, enacted, or anticipated tariffs, adding pressure to development costs3
• Nationwide multifamily permits have dropped 27.1% from pandemic highs, with high borrowing costs and decreased rental demand making new construction less appealing4
• The construction slowdown is expected to lead to tighter rental supply and potentially increased rental prices in the near future, though Southern markets like Austin and Cape Coral continue showing strength4

Industrial Market Overview: E-commerce growth sustains demand amid tariff uncertainties, with regional variations in performance.

• Online sales reached $1.19 trillion in 2024, continuing to drive warehouse space demand and supporting long-term need for logistics facilities despite economic headwinds5
• Industrial rents have increased 6.8% year-over-year nationally, with the Sun Belt region showing particularly notable growth as businesses relocate operations5
• While new construction has slowed due to rising material costs from tariffs, Phoenix is emerging as a key industrial hub, particularly for data centers and logistics facilities5
• National vacancy rates have reached 8.5%, but industry experts predict stabilization once tariff negotiations conclude and supply chain disruptions ease5

Office Sector Overview: Signs of recovery with increased sales and strategic repositioning, though challenges persist in the evolving work environment.

• January 2025 office property sales reached $6.2 billion—an 80% increase compared to January 2024—with signs of price stabilization potentially marking a turning point for the sector2
• Challenges remain, including high vacancies, large amounts of maturing debt, and the continuing evolution of post-Covid work environments2
• Piedmont Office Realty Trust suspended dividend payments for the first time in 15 years to conserve $60 million annually for tenant build-outs and leasing activities, signaling a strategic shift6
• Over 10% of Piedmont’s tenants have signed leases but are not yet paying rent, impacting short-term cash flow but potentially leading to a $67 million annual revenue boost once fully occupied6

Notable CRE Transactions Overview: Significant deals across multifamily and affordable housing sectors show continued investment despite market challenges.

• A joint venture between Charney Cos. and Tavros secured financing for 1,000 apartments at Brooklyn’s Gowanus neighborhood, part of the Gowanus Wharf development that will include residential units alongside retail and entertainment spaces7
• Harbor Group International provided a $64 million senior bridge loan for Sunela, a 272-unit luxury apartment complex in Phoenix, supporting a joint venture between Greystar Development and Crown Realty Group during the property’s lease-up phase8
• The Sobrato Organization acquired Soma Towers, a two-building apartment community in Bellevue, Washington, for approximately $192.9 million, featuring 273 units with a 95% occupancy rate and premium amenities9
• WNC & Associates’ Institutional Tax Credit Fund 57 successfully raised $228 million for 26 affordable properties totaling 1,908 units across 17 states, utilizing federal Low-Income Housing Tax Credits to provide equity to developers10
• Dominium is breaking ground on Saddleback Village at Stonegate, a 215-unit affordable build-to-rent community in Maricopa, Arizona, designed for residents earning up to 60% of area median income as part of a broader 1,500-unit Arizona strategy11