Daily Dose of Real Estate

Daily Dose of Real Estate for September 9

The first rule of GSE Reform – don’t talk about GSE Reform. Same goes for Fed Chairs too apparently. Secretary Bessent squares off with Director Pulte during a dinner for cabinet officials allegedly over back channel conversations with President Trump. Mortgage rates are on the right side of 6% (at or below 6.5%). Single family home sales activity and values are holding steady but condos are struggling. More signs that NYC is clawing out of what could have been a major CRE crisis coming out of COVID. CRE credit quality improves overall. Fannie survey shows consumers continue to struggle with affordability and home purchase sentiment reflects this reality. Let’s get you caught up and out the door in 3 minutes.

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Table of Contents

KEY TAKEAWAYS

POLITICAL CRISIS: Treasury Secretary Scott Bessent threatened to “punch in the f*cking face” FHFA Director Bill Pulte during Georgetown dinner attended by Cabinet officials, exposing deep Trump administration housing policy conflicts that could impact GSE reform efforts 1
MORTGAGE RATES: 30-year rates hit 11-month low at 6.50%, dropping as low as 6.29% after weak jobs report, driving refinance share to 46.9% of applications – highest since October 2024 2
FED POLICY: Markets price 88% probability of quarter-point rate cut September 17, with 12% chance of half-point cut following disappointing August jobs data showing only 22,000 new positions 3
HOME PRICES: ICE Home Price Index shows first monthly growth since April at 0.03% month-over-month, with 85% of markets experiencing firmer prices and year-over-year growth holding steady at 1.1% 4
LUXURY MARKET: Spectacular $38 million Malibu clifftop estate positioned dramatically above iconic Malibu Pier represents one of area’s most expensive listings 5
CHICAGO LEADS MEDICAL OFFICE GROWTH: Delivered 912,000 SF of new MOB space (most in nation) with 1M+ SF net absorption driven by major healthcare systems expansion
MANHATTAN OFFICE RECOVERY SIGNALS: Office availability dropped to 81.98M SF (lowest since January 2021), down 17% from February 2024 peak, indicating growing tenant demand
CRE CREDIT QUALITY SURPRISINGLY RESILIENT: S&P reports loan loss allowances remain modest at just 2%-7% across tracked lenders despite economic headwinds
CONSUMER CAUTION IN RETAIL: Mall traffic declined year-over-year across most formats in August 2025, with outlet malls seeing steepest Labor Day weekend drops

RESIDENTIAL REAL ESTATE MARKETS

Housing prices show first signs of stabilization with modest monthly growth while consumer sentiment remains pressured by persistent affordability challenges across most market segments.

ICE HOME PRICE INDEX (AUGUST): Posted 0.03% month-over-month increase, representing first growth since April and translating to seasonally adjusted annualized rate of 0.4%; year-over-year growth held steady at 1.1%, unchanged from July reading 4
PROPERTY TYPE PERFORMANCE: Single-family residences maintained steady annual growth at 1.4% year-over-year, while condominium prices faced continued pressure with -1.9% annual decline, worsening from previous month’s -1.7% reading 6
MARKET BREADTH IMPROVEMENT: 85% of markets experienced firmer prices in August compared to July, indicating broad-based improvement driven by combination of slightly lower mortgage rates and improved affordability conditions 4
CONSUMER SENTIMENT DECLINE: Fannie Mae Home Purchase Sentiment Index decreased 0.4 points to 71.4 in August, with year-over-year sentiment down 0.7 points, reflecting ongoing affordability challenges despite market improvements 7
ULTRA-LUXURY SHOWCASE: Malibu clifftop estate listed at $38 million, positioned dramatically above iconic Malibu Pier, represents pinnacle of coastal luxury living and demonstrates continued strength in trophy property segment 5

MORTGAGE MARKETS

Mortgage rates plummet to 11-month lows, creating bifurcated market with surging refinance activity while purchase applications remain constrained despite improved borrowing costs.

30-YEAR FIXED RATES: Averaged 6.50% for week ending September 4 according to Freddie Mac Primary Mortgage Market Survey; rates dropped as low as 6.29% following Friday’s disappointing jobs report, marking lowest levels since October 2024 2
15-YEAR FIXED RATES: Averaged 5.6% for the week, providing additional opportunities for borrowers seeking shorter-term financing options and potential savings over traditional 30-year products 2
REFINANCE SURGE: Share jumped to 46.9% of all mortgage applications, highest level since October 2024, as homeowners with loans originated in 2023-2024 found meaningful savings opportunities; refinance index increased 1% week-over-week 2
PURCHASE MARKET WEAKNESS: Applications declined 3% on seasonally adjusted basis despite more favorable rate environment, highlighting persistent challenges from tight affordability conditions and limited inventory 2
FEDERAL RESERVE EXPECTATIONS: Markets price 88% probability of quarter-point cut at September 17 FOMC meeting, with 12% chance of more aggressive half-point reduction; probability of half-point cut tripled from 4% before jobs report 3
CRITICAL DATA RELEASES: August Consumer Price Index and Producer Price Index data scheduled for September 11 release will provide final major inflation readings before Fed policy decision; potential for significant rate volatility around data releases 2

REGULATORY DEVELOPMENTS

Trump administration housing leadership faces unprecedented crisis while CFPB advances comprehensive mortgage regulations and industry navigates transition to modernized appraisal standards.

EXPLOSIVE POLITICAL CONFRONTATION: Treasury Secretary Scott Bessent threatened to “punch in the f*cking face” FHFA Director Bill Pulte during private dinner at ultra-exclusive Georgetown Executive Branch club, attended by Transportation Secretary Sean Duffy, Commerce Secretary Howard Lutnick, and other Cabinet officials; incident reveals deep fractures in housing finance policy coordination 1
CFPB SPRING 2025 AGENDA: Released comprehensive rulemaking plan including four major proposals concerning RESPA (Real Estate Settlement Procedures Act) and Truth in Lending Act modifications, signaling continued focus on mortgage market oversight and consumer protection 8
APPRAISAL STANDARDS REVOLUTION: UAD 3.6 and redesigned Uniform Residential Appraisal Report begin Limited Production Period through January 25, 2026, representing most significant overhaul of appraisal reporting standards in years with dynamic report format designed to reduce revision requirements 9
HUD PROGRAM UPDATES: Issued interim final rule revising regulations for Section 184 Indian Housing Loan Guarantee program, specifically modifying residency requirements for eligible borrowers seeking Section 184-insured mortgages to improve access for Native American communities 10
LEGISLATIVE VICTORY: National Association of Realtors celebrates enactment of legislation banning abusive “trigger leads” practices, marking major win for homebuyer privacy protection after years of advocacy to eliminate predatory marketing during mortgage application process 11
MAJOR INDUSTRY CONSOLIDATION: Mr. Cooper shareholders voted to approve pending merger with Rocket Companies, creating one of largest mortgage servicing platforms in United States with significant implications for market competition and consumer choice 12

ECONOMIC NEWS

Critical inflation data releases this week will shape Federal Reserve policy decisions as labor market confidence plunges to record lows and Treasury markets reflect growing economic uncertainty.

PIVOTAL INFLATION RELEASES: Bureau of Labor Statistics will publish August Consumer Price Index and Producer Price Index data on September 11, providing final major inflation readings before September 17 FOMC meeting; economists expect CPI at 2.9% with core inflation holding at 3.1% 13 3
EMPLOYMENT WEAKNESS: August nonfarm payrolls increased by only 22,000 jobs, well below expectations of 75,000; unemployment rate rose to 4.3%, highest level since October 2021; June employment count revised downward to show actual loss of 13,000 jobs 14
HISTORIC JOB MARKET PESSIMISM: New York Federal Reserve survey shows worker confidence in finding new job after losing current employment has fallen to record low levels, reflecting growing economic uncertainty and hiring slowdowns across multiple sectors 14
BROADER UNEMPLOYMENT MEASURES: U-6 unemployment rate, which includes discouraged workers and underemployed, climbed to 8.1%, also highest level since October 2021, reinforcing expectations for Federal Reserve intervention 14
TREASURY MARKET VOLATILITY: 10-year Treasury yield dropped to lowest level since April following weak jobs report, reflecting flight-to-quality dynamics; 30-year bonds approaching 5%, level not seen since 2006, highlighting investor concerns about fiscal trajectory 15
GLOBAL GROWTH CONCERNS: Moody’s latest forecast projects G-20 GDP growth of 2.4% in 2025-26, down from 2.9% in previous year; trade tensions continue to weigh on business investment and global supply chain decisions 16

COMMERCIAL REAL ESTATE NEWS

(INCLUDING MULTIFAMILY)

COMMERCIAL REAL ESTATE MARKETS

Major transactions and market data show mixed signals across asset classes with multifamily leading activity.

LA COUNTY’S LARGEST 2025 MULTIFAMILY SALE: Greystar acquired 235-unit Modera Glendale for $126 million ($536,000/unit), renamed The Adeline; 1BR starts $2,788/month, 2BR starts $3,854/month 1
CHICAGO MEDICAL OFFICE BOOM: Delivered 912,000 SF new MOB space (most in nation), posted 1M+ SF net absorption; Northwestern Medicine, Rush, Advocate, UChicago Medicine driving expansion 2
MANHATTAN OFFICE AVAILABILITY DROPS: Fell to 81.98M SF (lowest since Jan 2021), down 17% from Feb 2024 peak, still 50%+ above pre-COVID levels 3
MALL TRAFFIC SOFTENS: August 2025 visits declined YoY across all formats except indoor malls (modest gains); Labor Day weekend saw declines, outlet malls steepest drop 4

COMMERCIAL FINANCING MARKETS

Rate cut expectations solidify while CRE credit quality shows unexpected resilience.

MORTGAGE RATES HIT 10-MONTH LOW: 30-year fixed averaged 6.50% (week ending Sept 4), lowest since Oct 2024; 10-Year Treasury at 4.086%, 30-day SOFR at 4.303% 5 3
CRE CREDIT QUALITY HOLDS: S&P reports 6 tracked CRE lenders show loan loss allowances just 2%-7%; office REITs posting improved leasing, occupancy may bottom in 2025 3
HOTEL SECTOR MIXED: Luxury hotels gaining while mid-tier/economy declining; summer leisure travel momentum slowed, fall corporate travel season critical test 5
REIT PERFORMANCE: FTSE NAREIT index closed 779.05 (+0.59%); office REIT indexes continued rising in first week of September 3 6

COMMERCIAL SERVICING MARKETS

Special servicing activity increases with loan modifications underway for distressed properties.

BBCCRE 2015-GTP LOAN MODIFICATION: Fitch affirmed ratings, removed rating watch negative; loan transferred to special servicing April 2025, missed Aug maturity; modification targets mid-Sept closing with 2-year extension, portfolio 92.7% occupied 7
2024 SERVICER RANKINGS RELEASED: Wells Fargo leads with $646.075B (36,957 loans), PNC/Midland $584.037B (22,572 loans), KeyBank $478.103B (21,269 loans) 8

INDUSTRY NEWS

Mortgage servicing stocks surge on analyst recognition while real estate leadership undergoes transitions and commercial markets display mixed performance signals.

LOANDEPOT STOCK SURGE: Shares jumped 32% following bullish Citron Research report highlighting significant undervaluation of company’s mortgage servicing business; research firm called the nonbank “hidden gem of housing finance” with high recapture rates positioning it to benefit from refinancing environment 17
LEADERSHIP TRANSITION: Bo Menkiti, founder of Keller Williams Capital Properties, announced transition from CEO role to focus on broader strategic initiatives with The Menkiti Group; company has grown to become leading brokerage known for empowering agents and transforming communities 18
OFFICE MARKET MOMENTUM: New York office market building significant momentum with leasing activity approaching pre-pandemic levels; Manhattan office leasing on track to hit highest volume since 2019, reflecting improved tenant demand and market stabilization 19
MEDICAL OFFICE GROWTH: Chicago leads nation in medical office space delivery and tenant retention, with healthcare real estate sector benefiting from demographic trends and shift toward outpatient care delivery models 20
RETAIL SECTOR CHALLENGES: Mall traffic slowed amid consumer caution in August 2025, with shorter visit durations and subdued Labor Day weekend reflecting changing consumer behavior and economic uncertainty 21
TECHNOLOGY JOB GROWTH: Data scientists lead US office job growth in 2024 with staggering 551% increase since 2019, reflecting businesses’ increasing prioritization of data analytics and artificial intelligence capabilities, reshaping office space requirements 22
STILES PROPERTY MANAGEMENT EXPANSION: Added 1.2M SF across Florida/Carolinas including Lennar Corporate HQ Miami, Stockbridge retail centers Boca Raton; total portfolio now 23M+ SF 9
HEALTHCARE REIT ACTIVITY: Sila Realty Trust completed 2-property inpatient rehab facility acquisition, now owns 136 properties as of June 30, 2025 10
INDUSTRIAL REIT EXPANSION: Terreno Realty acquired South San Francisco property for $10.2M on Sept 5, 2025 11