Daily Dose of Real Estate

Daily Dose of Real Estate for November 3

The dam may be starting to crack around the government shutdown as lawmakers begin thinking creatively about how to break the now 30-day-old impasse. We anticipate the government reopening by late next week. The Democrats likely need to hold the line and demonstrate unity until after the NYC mayor’s race this Tuesday. SNAP benefits expired this weekend, and a number of federal employees—including TSA workers—just missed their first paycheck.

The hits and blows keep coming at Fannie Mae with another round of layoffs. While GSE earnings are through the roof (both reported strong results last week), their SDQ rates are trending in the wrong direction—approaching 0.50% (for context, they were closer to 5% during the GFC). FHFA Director Pulte stated that any GSE exit or IPO could be delayed until Q2 2026. “If I was a betting man, I’d probably say Q1 2026,” Pulte added during an October 29th podcast.

Housing inventory continues to rise and linger—now at 1 million units. Incredulous sellers are holding the line, with list prices remaining flat. Multiple reports and analyses continue to show weakening performance across CRE, CMBS, and multifamily markets.

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

Tim

Today’s newsletter was prepared by our AI platform ALFReD. When you are ready to see what a real estate and mortgage specific AI platform can do for you, check out our website or schedule some time with me here. Know Better.

Table of Contents

KEY TAKEAWAYS

Mortgage rates hit lowest levels in over a year at 6.25% for 30-year fixed loans in October, with experts predicting stability through November despite no Fed meeting scheduled 1
Fannie Mae eliminates 62+ positions following leadership shakeup, while FHFA Director signals GSE privatization may be delayed until Q2 2026 amid ongoing government shutdown
Zombie foreclosure rates decline to 3.25% with only 7,448 abandoned properties nationwide, while overall vacancy rates remain near historic lows at 1.32% 3
GSE delinquency rates tick higher with Freddie Mac serious delinquencies at 0.57% and Fannie Mae at 0.54%, both up from previous month but below pre-pandemic levels 4
Rocket Companies delivers standout Q3 performance with $1.78 billion adjusted revenue exceeding guidance, completing largest independent mortgage company acquisition in history with Mr. Cooper deal 5
Housing inventory continues climbing with active listings up 14.6% year-over-year for 103rd consecutive week, while median listing prices remain flat despite increased supply 6
Overall CRE delinquencies declined in Q3 after spiking in Q2, covering $2.8 trillion in loans across different capital sources 9
CMBS delinquencies rose to 7.46% in October, up 23 basis points from September, with office reaching record 11.76% 1
Multifamily CMBS delinquencies jumped 53 basis points to 7.12%, crossing 7% threshold for first time since December 2015 10
CMBS loans show highest stress among all capital sources at 5.66% delinquency rate, while other funding mechanisms perform better 9
Blackstone Mortgage Trust targets $7B in new investments by year-end 2025, with Q3 distributable EPS of $0.24 despite stock trading near multi-year lows 4
CRE debt market reaches $4.8T in Q2 2025, with life insurers and GSEs showing strongest growth at 6.1% and 5.8% respectively 5
$936B in CRE loans mature in 2026, representing 19% increase from 2025 as loan extensions push refinancing challenges into future 6

RESIDENTIAL REAL ESTATE MARKETS

The residential market continues its unique trajectory with sustained inventory growth for over two years while pricing remains surprisingly stable. Transaction volumes hit historic lows as the rate lock-in effect persists, creating a standoff between buyers and sellers that defines the current market environment.

INVENTORY SURGE CONTINUES DESPITE FLAT PRICING

Active inventory climbed 14.6% year-over-year, marking the 103rd consecutive week of annual gains with approximately 1.1 million homes for sale 6
Median listing prices remained flat compared to last year, but price per square foot fell 0.8% year-over-year for the eighth consecutive week 6
New listings grew 5.9% year-over-year, significantly slower than inventory growth, indicating homes are sitting longer on the market 6
Inventory levels maintained above 1 million for the 26th consecutive week, representing the highest sustained levels in recent years 6

HOME TURNOVER REACHES HISTORIC LOWS

Only 28 out of every 1,000 homes changed hands in the first nine months of 2025, one of the lowest turnover rates on record due to the rate lock-in effect 7
Single-family homes outperformed condos, with 30 per 1,000 single-family homes selling versus 22 per 1,000 condos and townhouses 7
Condo and townhouse sales fell 3.3% year-over-year while single-family homes managed a modest 0.6% increase 7
New listing rate improved to 3.9%, meaning 39 out of every 1,000 homes were listed for sale, up from last year’s 3.7% but still the third-slowest since 2012 7

ZOMBIE FORECLOSURES AND VACANCY RATES DECLINE

National zombie foreclosure rate dropped to 3.25%, down from 3.38% in Q3, representing approximately 7,448 abandoned properties nationwide 3
Overall vacancy rate dipped to 1.32%, down slightly from 1.33% previous quarter, covering about 1.4 million homes nationwide 3
228,943 residential properties were in foreclosure process during Q4, with zombie rates declining in most states including California (down 12.3%) and Indiana (down 12.7%) 3
Midwestern cities show highest zombie rates, with Cedar Rapids, IA leading at 14% of pre-foreclosure homes abandoned, followed by Peoria, IL at 11.9% 3

MORTGAGE MARKETS

Mortgage rates reached their lowest levels in over a year during October, providing relief to borrowers despite ongoing market uncertainty. GSE delinquency rates showed modest increases while remaining below pre-pandemic levels, and commercial mortgage markets show divergent performance across property types.

RATES HIT YEAR-PLUS LOWS DESPITE FED UNCERTAINTY

30-year fixed rates averaged 6.25% in October, declining 10 basis points from September and down 17 basis points year-over-year 1
15-year rates declined modestly to 5.49%, down just 1 basis point from September but 11 basis points lower than last year 1
10-year Treasury yield averaged 4.09% in October, down 5 basis points from the previous month as markets priced in Fed rate cuts 1
Fed cut rates 25 basis points on October 29th, but mortgage rates remained relatively unchanged as the move was already priced into markets 1

GSE DELINQUENCY RATES SHOW MODEST INCREASES

Freddie Mac serious delinquency rate rose to 0.57% in September, up from 0.56% in August and 0.54% year-over-year, though below pre-pandemic level of 0.60% 4
Fannie Mae serious delinquency rate increased to 0.54% in September, up from 0.53% in August and 0.52% year-over-year, remaining below pre-pandemic low of 0.65% 4
Both GSEs remain well below crisis peaks, with Freddie’s rate peaking at 4.20% in February 2010 and Fannie’s at 5.59% during the same period 4
Pandemic peaks were lower than housing crisis, with Freddie reaching 3.17% in August 2020 and Fannie hitting 3.32% during the same period 4

NOVEMBER RATE OUTLOOK AMID FED SILENCE

No Fed meeting scheduled for November, leading experts to predict mortgage rates will “drift with the bond market” with modest daily moves 8
Markets expect two more rate cuts before year-end, with current mortgage rates already factoring in those anticipated reductions 8
30-year rates could drift to 6.125% as the 10-year Treasury recently closed at its lowest point since April 8
Core PCE running at 3% year-over-year, with further cooling potentially pushing mortgage rates lower 8

APPLICATION ACTIVITY SHOWS SIGNS OF LIFE

Mortgage applications strengthened in recent weeks with both refinancing and purchase applications increasing as rates declined 1
Existing home sales rose to a seven-month high in September, coinciding with improved mortgage rate environment 1
New home sales data unavailable due to ongoing government shutdown, limiting visibility into market trends 1

REGULATORY DEVELOPMENTS

Significant changes at Fannie Mae include major layoffs and leadership restructuring, while GSE privatization timelines extend into 2026. Federal agencies continue enforcement actions as Congress advances wildfire legislation with housing implications.

FANNIE MAE UNDERGOES MORE RESTRUCTURING

62+ employees laid off on October 30th across operations, IT, and diversity, equity, and inclusion divisions following FHFA Director inquiry 2
FHFA Director celebrated layoffs on social media, writing “DEI HAS PASSED AWAY AT FANNIE MAE” after questioning employee responsibilities 2
Leadership shakeup continues with CEO Priscilla Almodova’s abrupt departure one week prior, COO Peter Akwaboah promoted to acting CEO 2
John Roscoe and Brandon Hamara named co-presidents as part of broader organizational restructuring 2

GSE PRIVATIZATION TIMELINE EXTENDED

Privatization delayed until Q2 2026, according to FHFA Director Pulte, extending beyond initial 2025 IPO target date 2
“If I was a betting man, I’d probably say Q1” 2026, Pulte stated during October 29th podcast, noting final decision rests with the president 2
NAR economist warns of higher rates if GSEs go public without government-backed guarantee, potentially creating “jumbo mortgage rate conditions” 2
Congressional concerns raised about risks involved with GSE privatization amid ongoing market uncertainty 2

FDIC ENFORCEMENT ACTIONS CONTINUE

11 orders and 2 adjudicated decisions issued in September 2025 against banks and individuals for various violations 11
4 prohibition orders issued along with 1 combined prohibition order and order to pay for regulatory violations 11
4 orders of termination of insurance and 2 orders terminating consent orders completed regulatory enforcement actions 11
No administrative hearings scheduled for November 2025 as FDIC continues oversight activities 11

SENATE ADVANCES WILDFIRE LEGISLATION

Fix Our Forests Act advanced by Senate Agriculture Committee with bipartisan support for proactive forest management 2
NAHB strongly supports legislation, stating it will “help strengthen the nation’s housing supply chain and promote affordable housing opportunities” 2
House already passed the bill earlier this year, with Senate floor vote now pending for full chamber consideration 2
Wildfire threat growing with legislation aimed at reducing major wildfire risks through improved forest management policies 2

PROLONGED GOVERNMENT SHUTDOWN

NYC greenlit three major neighborhood plans expected to deliver over 27,000 new homes citywide, providing positive momentum despite federal challenges and regulatory uncertainty 8
Prolonged federal government shutdown creating mounting pressure on multifamily sector with HUD staffing cuts, halted inspections, and frozen vouchers disrupting development timelines and putting low-income renters at risk 15

ECONOMIC NEWS

The Federal Reserve navigates unprecedented data challenges due to government shutdown and loss of private sector employment data, while GDP tracking models show resilient growth and consumer spending remains robust despite sentiment concerns.

FEDERAL RESERVE NAVIGATES DATA BLACKOUT

Government shutdown delays key reports including jobs report and Consumer Price Index, hampering Fed’s economic assessment 8
ADP stopped providing employment data to Fed after Governor Waller mentioned company in August speech, affecting one in five private workers 2
Chair Powell warns against December cut expectations, citing difficulty making policy decisions without crucial economic data 8
Fed relies on state jobless claims and ADP National Employment Report as alternative data sources for November decision-making 8

GDP TRACKING SHOWS RESILIENT GROWTH

Atlanta Fed estimates Q3 GDP at 3.9% as of October 27th, unchanged from October 16th tracking despite data limitations 12
Bank of America maintains 2.8% quarter-over-quarter seasonally adjusted annual rate for Q3 GDP growth 12
Goldman Sachs estimates 2.2% annualized GDP growth year-to-date and 3.3% in Q3 based on available indicators 12
Official Q3 GDP report delayed by Commerce Department due to government shutdown, forcing reliance on Fed bank estimates 13

CONSUMER SPENDING RESILIENCE CONTINUES

Holiday spending plans increase despite consumers expressing dour economic views, according to Visa analysis 14
Consumer sentiment fell three consecutive months in October due to job market and inflation worries, per University of Michigan index 14
Spending behavior contradicts sentiment surveys, with consumers spending “in a far better, more robust way” than confidence data suggests 14
Steady wage gains support spending, keeping consumer purchases aloft despite higher prices and economic uncertainty 14

INFLATION SIGNALS REMAIN MIXED

Core PCE running at 3% year-over-year, with further cooling potentially beneficial for mortgage rate environment 8
Fed focuses on labor market as inflation concerns ease, shifting policy emphasis toward employment conditions 8
September CPI released despite shutdown as it’s crucial for Social Security cost-of-living adjustment calculations 13
Mixed inflation indicators continue presenting challenges for Fed policymakers assessing appropriate monetary policy stance 8

COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)

Commercial real estate markets show divergent trends with Nashville and Midwest cities emerging as multifamily investment leaders while national vacancy rates hit multi-year highs. Regional performance varies dramatically as oversupply challenges persist in many markets.

NASHVILLE DOMINATES MULTIFAMILY INVESTMENT RANKINGS

Nashville ranks #1 for multifamily investment in Fall 2025 according to Arbor-Chandan Multifamily Opportunity Matrix, driven by 21.5% population growth over past decade—three times the national average 2
Midwest cities dominate top 10 with Indianapolis (#2) and Columbus (#3) leading due to superior affordability, lower operating costs, and diverse economies spanning healthcare, logistics, and manufacturing 2
Tennessee’s tax competitiveness ranks 8th nationally, with major corporate expansions from Oracle, Amazon, and Bridgestone driving Nashville’s growth momentum 2

RENTAL MARKET FACES HISTORIC CHALLENGES

National multifamily vacancy rate hits 7.2% in October 2025—highest level since 2017—following delivery of over 600,000 new units in 2024, the largest annual supply surge since the 1980s 7
Year-over-year rent growth remains negative at -0.9%, creating increased competition among landlords, longer leasing times, and reduced pricing power despite rents still significantly higher than January 2021 levels 7
San Francisco leads with 7.5% annual rent growth driven by tight occupancy and revived tech demand, while Denver and Austin continue experiencing significant rent declines due to oversupply 8

MAJOR NYC TRANSACTIONS SIGNAL MARKET ACTIVITY

NYC recorded 144 transactions totaling $227.9 million on October 31, with largest commercial deal being Steven Shi’s $31 million acquisition of 100,000-square-foot lot at 245 Duffield Streetin Downtown Brooklyn for condo development 9
Previous day saw 189 transactions totaling $445 million, highlighted by Benenson Capital Partners’ $22.5 million purchase of ground-floor retail condo at 542 Broadway in Soho, occupied by New Balance 10
Luxury residential activity remains strong with 3,132-square-foot condominium at 40 East 72nd Street in Lenox Hill selling for $8.9 million 9

COMMERCIAL FINANCING MARKETS

Commercial financing markets face mixed conditions with Federal Reserve rate cuts providing limited REIT relief while CRE debt reaches $4.8 trillion. Refinancing pressure builds as $936 billion in loans mature in 2026, creating significant challenges for borrowers facing higher replacement rates.

FEDERAL RESERVE RATE CUT PROVIDES LIMITED RELIEF

Fed delivered another 25 basis point rate cut in October 2025 amid lingering government shutdown and weakening labor market, but offered no relief to REITs with total returns declining 2.27% on announcement day 10
REITs down 2.97% for the month, on pace for their worst monthly performance of 2025 despite lower federal funds rate environment 10
30-year mortgage rates hit lowest levels in over a year at 6.08% for week ending October 31, down from 6.44% a year ago, showing modest impacts on housing activity with strengthening mortgage applications 11

CRE DEBT MARKET REACHES $4.8 TRILLION

Commercial real estate debt market totaled $4.8 trillion in Q2 2025, with banks maintaining largest share at $1.83 trillion (38%), followed by GSEs, insurance companies, and securitized lenders 5
Life insurers and GSEs showed strongest growth with loan balances rising 6.1% and 5.8% respectively year-over-year, indicating growing appetite for long-duration, yield-generating assets 5
Average interest rate for new CRE loans was 6.24% in 2025—notable jump from 4.76% average on older debt coming due, creating significant refinancing challenges 5

REIT PERFORMANCE SHOWS MIXED RESULTS

Federal Realty reports strong Q3 2025 with FFO of $1.77 per diluted share (up from $1.71 in Q3 2024) and record leasing volume of 132 leases totaling 774,890 square feet 3
Record rent spreads of 28% cash basis and 43% straight-line basis with occupancy improving to 94.0%, up 40 basis points sequentially and 20 basis points year-over-year 3
Essex Property Trust benefits from AI growth in Northern California, posting same-property revenue growth of 2.7% YoY and core FFO per share growth of 1.5% YoY in Q3 2025 12

COMMERCIAL SERVICING MARKETS

Commercial servicing markets face mounting stress with CMBS delinquencies hitting multi-year highs at 7.46%. Office sector leads distress at record 11.76% while multifamily reaches 10-year high of 7.12%. The approaching 2026 debt maturity wall of $936 billion adds pressure.

CMBS DELINQUENCIES HIT MULTI-YEAR HIGHS

CMBS delinquency rates surged to 7.46% in October 2025, up 23 basis points from September and 148 basis points higher than same period last year, driven by $1.1 billion in new delinquent loans 1
Office sector delinquencies reached record 11.76%, up 63 basis points from September with more than $1.7 billion in office loans becoming newly delinquent while only $760 million returned to current status 1
Multifamily delinquencies rose 53 basis points to 7.12%—highest level since December 2015—with net increase of over $300 million in delinquent loans 1

Q3 SHOWS MIXED DELINQUENCY TRENDS

Q3 2025 showed overall improvement in delinquency rates according to MBA’s CRE Loan Performance Survey covering $2.8 trillion in loans (57% of all CRE debt outstanding) 13
CMBS loans remain under most pressure with delinquencies rising to 5.66%—highest among all capital sources—while life insurance companies saw minor decline to 1.45% and GSE loans held steady at 0.64% 13
FHA multifamily and health care loans improved, dropping from 1.04% to 0.79%, while multifamily and health care loans from other sources saw rising delinquencies 13

DEBT MATURITY WALL APPROACHES 2026

Nearly $936 billion in CRE loans scheduled to mature in 2026—almost 19% more than 2025’s revised estimate—as loan modifications temporarily ease distress but add to future refinancing burdens 6
Banks face largest near-term exposure with $598 billion maturing (33% of their total CRE portfolio), while securitized lenders have $169 billion (38% of total) coming due 5
Serious delinquencies rising to 6.99%, up 24 basis points from previous month, with loans 60+ days late, in foreclosure, REO, or non-performing balloon status showing continued weakness 1

🏭 INDUSTRY NEWS

Market Overview: Industry developments show mixed signals with major corporate earnings revealing both opportunities and challenges. Leadership transitions at key firms coincide with significant refinancing activity and technology adoption, while government shutdown impacts create additional headwinds.

INDUSTRY NEWS

Rocket Companies delivered exceptional Q3 results while completing the historic Mr. Cooper acquisition, RE/MAX continues facing agent losses, and technology partnerships drive innovation across the mortgage and real estate sectors.

ROCKET COMPANIES DELIVERS EXCEPTIONAL Q3 PERFORMANCE

Total net revenue reached $1.61 billion with adjusted revenue of $1.78 billion exceeding high-end guidance expectations 5
Adjusted net income hit $158 million despite GAAP net loss of $124 million, with adjusted EBITDA totaling $349 million 5
Mortgage rate lock volume climbed 20% year-over-year to $35.8 billion with closed origination volume rising 14% to $32.4 billion 5
Servicing portfolio reached $613 billion unpaid principal balance covering 2.9 million loans, generating $1.7 billion annualized recurring income 5

HISTORIC MR. COOPER ACQUISITION COMPLETED

Largest independent mortgage company deal in U.S. history completed October 1st through all-stock transaction 5
11 Rocket shares exchanged for each Mr. Cooper share, increasing Rocket’s Class A float to 35% 5
Jay Bray joins as President and CEO of Rocket Mortgage, bringing 30+ years experience and leadership of largest U.S. home loan servicer 5
Mr. Cooper brings significant scale as largest home loan servicer in United States, enhancing Rocket’s market position 5

ROCKET PRO EXPANDS BROKER CHANNEL COMMITMENT

New broker tools launched including Rocket Pro Navigate, Rocket Pro Assist, and BrokerNearMe.com at Detroit experience event 5
Ecosystem-based approach emphasized with GM Dan Sogorka stating brokers shouldn’t be “locked into using one platform, one technology suite or one lender” 5
Key personnel additions including Dan Sogorka and Katie Sweeney strengthen broker-facing capabilities 5
Broker superpower is choice, according to Rocket Pro leadership, driving flexible partnership approach 5

RE/MAX FACES CONTINUED AGENT LOSSES

Revenue declined 6.7% year-over-year to $73.3 million despite slight uptick from Q2’s $72.8 million 15
U.S. and Canada agent count fell 5.1% year-over-year to 74,198 agents while international operations grew 9% to 73,349 agents 15
Cash position improved to $107.5 million as of September 30th, up from $94.3 million at end of June 15
Adjusted EBITDA declined 5.6% year-over-year to $25.8 million, reflecting ongoing operational challenges 15

FEDERAL REALTY INVESTMENT TRUST REPORTS SOLID Q3

Net income of $0.69 per diluted share compared to $0.70 in same period last year, with operating income rising to $110.7 million 16
Occupancy levels at 93.3% leased, representing 20-basis point increase year-over-year demonstrating strong tenant demand 16
2025 FFO guidance updated to $7.20-$7.26 per diluted share, with FFO excluding NMTC transaction income at $7.05-$7.11 16
Annapolis Town Center acquired post-quarter for 479,000 square feet, demonstrating continued strategic expansion 16

TECHNOLOGY INNOVATION PARTNERSHIPS

Venmo and Bilt collaboration announced for mortgage and rent payment initiatives, allowing consumers to earn rewards on housing payments 17
Andy Thaw rejoins Jet Direct Mortgage as 203(k) specialist with four decades experience to grow renovation lending department 18
Financial technology companies increasingly entering real estate space to provide enhanced payment solutions and customer experiences 17
Specialized lending products remain important in current market environment as industry veterans return to key roles 18

MAJOR CORPORATE EARNINGS AND LEADERSHIP CHANGES

Blackstone Mortgage Trust expects to close more than $7 billion in new investments by year-end 2025, with Q3 net income of $63.4 million and distributable EPS of $0.24, maintaining 10.4% dividend yield 4
Leadership transition underway as CEO Katie Keenan steps down to lead Blackstone Real Estate Income Trust following tragic death of Wesley LePatner, while BXMT stock remains near multi-year lows despite operational momentum 4
Company completed $100 million in stock repurchases this year at discounts to book value, with management calling current stock price an “opportunity” despite strong operational performance 4

MAJOR OFFICE MARKET TRANSACTIONS

AmTrust RE acquiring 260 Madison Avenue for $217 million with plans to invest up to $70 million to boost NOI of the 22-story, 570,000-square-foot property currently only 68% leased with $10 million annual NOI 8
Brookfield completed $1.3 billion refinancing of 660 Fifth Avenue, capping $35 billion in real estate financing year-to-date, demonstrating continued institutional capital deployment 8
BXP and Moinian refinanced 3 Hudson Boulevard with $108 million loan from JPMorgan after defaulting on prior debt, signaling continued challenges and workout activity in office sector 8

TECHNOLOGY AND INNOVATION DEVELOPMENTS

NYC landlords turning to AI to cut staffing costs and meet rising tenant service expectations, reflecting broader technology adoption across real estate industry for operational efficiency 8
Data center development driving rent growth in Midwestern tech hubs where growing infrastructure needs are tightening supply and driving up demand for specialized real estate 8
Amazon continues aggressive AI infrastructure investment with roadmap showing no signs of slowing as company chases AI-powered growth and broader market penetration across US and globally 14