Rates are down – applications are up – and 3M households in the money to refinance (America is back, baby! 😉 The rally in non QM lending shows there’s demand for homes at nearly any price. Separate round table meetings in DC on GSE reform with different gov sponsors and leaders at each (who’s calling the shots?) Major CRE refinance crisis as 2/3 of bank CRE loans mature at the end of 2025 into a very different rate and market environment from which they started. Labor market revision makes an interest rate cut next week at the FOMC meeting a lock. Let’s get you caught up and out the door in 3 minutes. Tim
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KEY TAKEAWAYS
- Mortgage applications surged 9.2% to highest level since 2022 as 30-year rates fell to 6.49% 1
- Refinances surged 70% in August while purchases fell 10% according to Optimal Blue data 2
- Hidden homeownership costs + $21,084 annually, representing 27% of median U.S. household income 3
- Seven major metros transitioned to buyer-friendly markets while national home prices held steady at $429,990 4
- Labor market revised down by 911,000 jobs, intensifying Fed rate cut pressure 5
- Non-QM loans reached 8.3% of total originations, nearly six times their 2020 share 2
- Over 3 million homeowners now “in the money” for refinancing opportunities 6
- Markets pricing 89% probability of 25-basis-point Fed rate cut at September 17 meeting 7
- JPMorgan CEO Jamie Dimon says economy “is weakening” citing job growth revisions 8
- House Republicans increasingly frustrated with FHFA Director Bill Pulte over GSE privatization timeline 9
- Home price growth slowed to 1.4% year-over-year, nearly half the inflation rate 10
- ARM share increased to 9.2% of total applications as rates offered advantage over fixed loans 1
- Hidden costs exceed $30,000 annually in four states: Hawaii, California, Massachusetts, New Jersey 3
- Major CRE refinancing crisis looms as 63% of US banks’ commercial real estate loans are set to mature by end of 2025, equal to their tangible common equity, with Moody’s placing eight regional banks under review 2
- $1 billion affordable housing joint venture launched by Manulife Investment Management and TruAmerica Multifamily, acquiring 51 properties to address chronic housing undersupply 3
- Fed rate cut probability hits 89% for September 17 meeting as Treasury yields fall to 4.08%, potentially tightening cap rates across most property types 4
- CMBS delinquency resolution times dramatically shifted post-2008, with modifications now taking just 2.7 months versus 14 months pre-crisis, while foreclosures stretch to 19.5 months
RESIDENTIAL REAL ESTATE MARKETS
Home prices cooling with buyer-friendly conditions emerging in major metros amid inventory growth.
- Home price growth slowed to 1.4% year-over-year in July 2025, nearly half the inflation rate 6
- Monthly prices declined 0.2% between June and July 2025 6
- Seven major metropolitan areas now classified as buyer-friendly markets 4
- Median home price held steady at $429,990 in August compared to year earlier 4
- August sales down 5.0% year-over-year in early reporting markets 7
- South Dakota led price growth at 6.2% year-over-year 6
- Las Vegas inventory surged 37% year-over-year to 7,206 houses without offers 8
- Las Vegas median price $480,000 in August, up less than 1% year-over-year 8
- Hidden homeownership costs exceed $30,000 annually in Hawaii ($34,739), California ($34,061), Massachusetts ($33,659), New Jersey ($30,424) 3
- FL homeownership costs represent 37% of median household income, highest burden nationally 3
- Home insurance costs expected to rise 8% year-over-year by end of 2025 3
MORTGAGE MARKETS
Refinance activity surging while purchase lending declines as rates fall to 10-month lows.
- Mortgage applications increased 9.2% week-over-week, highest level since 2022 1
- 30-year fixed rate fell to 6.49%, lowest since October 2024 1
- Refinance Index increased 12% week-over-week, 34% higher than same week last year 1
- Rate-and-term refinances surged nearly 70% in August, strongest showing of 2025 2
- Purchase lending fell 10% in August according to Optimal Blue data 2
- Purchase Index increased 7% week-over-week, running 20% ahead of last year’s pace 1
- Refinance applications accounted for 49% of all applications last week 1
- Over 3 million homeowners now “in the money” for refinancing 9
- ARM share increased to 9.2% of total applications 1
- Non-QM loans reached 8.3% of total originations, six times their 2020 share 2
- Refinancing captured 26% of mortgage originations 2
REGULATORY DEVELOPMENTS
Congressional tensions with FHFA Director over GSE privatization timeline while risk transfer activities continue.
- House Republicans increasingly frustrated with FHFA Director Bill Pulte over social media presence and GSE privatization push 10
- Trump administration considering GSE public offering as soon as this year 10
- House Financial Services Republicans want “much more deliberate look” at GSE privatization 10
- Freddie Mac priced $707 million securitization of re-performing loans in second SCRT offering of 2025 11
- Transaction includes $673 million guaranteed senior certificates and $34 million non-guaranteed subordinate certificates 11
- Freddie Mac has securitized $80.6 billion of re-performing loans to date 11
- NY DFS released third re-proposal of CRA regulations for Independent Mortgage Banks on September 3 12
- Manulife and TruAmerica formed $1 billion JV for income-restricted multifamily properties 13
- Tax credit allocations to grow 12% beginning in 2026 under One Big Beautiful Bill 13
ECONOMIC NEWS
Labor market weakness intensifies Fed rate cut expectations with 911,000 job revision and economic concerns.
- Labor Department revised jobs data down by 911,000 positions through March 5
- JPMorgan CEO Jamie Dimon says economy “is weakening” 14
- Markets pricing 89% probability of 25-basis-point Fed rate cut at September 17 meeting 15
- 10-year Treasury yield dropped to 4.08%, second-lowest point in a year 15
- Unemployment at 4.3% with job openings at 1:1 ratio with unemployed workers 16
- CPI inflation report expected to show 2.9% rise, highest since January 17
- Housing affordability projected to return to “normal” levels by 2030 if rates drop and price growth stabilizes 18
- CRE investment volume reached $115 billion in Q2, less than half of Q2 2021 levels 19
COMMERCIAL REAL ESTATE MARKETS (INCLUDING MULTIFAMILY)
Commercial Real Estate Markets
Major multifamily transactions and regional market activity dominated with over $1.2 billion in deals announced.
- Bay Area deal: Acacia Capital pays $190 million for The Waymark in Walnut Creek 4
- Orlando investment volume hits $1.7 billion YTD across 42 assets vs. $942.5 million same period 2024; Fairfield pays $82 million for 400 North 5
- CBRE forecasts multifamily vacancy at 4.9% for end-2025 with 2.6% average annual rent growth 6
Commercial Financing Markets
Mortgage applications jumped 9.2% as rates dropped to 6.49%, while 89% probability of Fed rate cut drives market optimism.
- CMBS issuance reaches $59 billion in H1 2025, post-GFC high driven by single-asset deals 9
- Starwood secures $930 million CMBS loan for 54 industrial properties (8.2M sq ft) across four states 9
- Cap rates tightening for multifamily, SFR, manufactured housing, and industrial; office continues struggling 8
- Refinancing crisis: 63% of bank CRE loans mature by end-2025, equal to median bank’s tangible common equity 10
Commercial Servicing Markets
CMBS delinquency resolution times dramatically shifted post-2008, with modifications now taking 2.7 months versus 14 months pre-crisis.
- CMBS modification timelines drop 80% to 2.7 months post-2010 vs. 14 months pre-crisis 11
- Foreclosure timelines increase 40% to 19.5 months average, with 2020 vintage reaching 38 months due to pandemic constraints 11
- Moody’s reviews 8 regional banks for potential downgrades due to high CRE exposure; changes outlook for 13 others 10
- Lenders offering 6-12 month extensions as “high-wire act” refinancing strategy amid persistent high rates 10
INDUSTRY NEWS
Technology partnerships, stock surges, and executive appointments highlight sector activity.
