• 23,000 jobs lost in July. (Losses occurred in retail, finance, hospitality, local gov't education)

• 264,000 people leave the labor force

• Wage growth falls to 3.2% = lowest in 5 years (and totally wiped out by inflation right now)

Prime-age labor force participation rate (workers ages 25 to 54).

• November: 83.8%

• Now (July): 83.4%

• 1.7 million prime-age workers have left the labor force since November 2025.

Total labor force participation rate lowest since February 2021.

Inflation is totally wiping out wage gains. The financial squeeze is real for many Americans right now.

Wage growth in the past year: 3.2% -->Lowest in 5 years
Inflation: 3.5%+

Wage growth is not contributing to inflation right now. That means many workers will struggle in the months ahead.

Joe Weisenthal, Bloomberg: In the last 30 years, residential and non-residential construction have generally gone up and down at the same time. One was in the early 200s, when we had China shock + housing boom.

The other divergence is now.

Back in March, analysts warned that the greatest energy crisis ever would send oil to the triple digits. Prices barely spent any time there. Five months later, benchmark Brent crude is around $83 a barrel.
 
Part of the explanation is that, instead of a fifth of global supply being shut off, the Strait of Hormuz sprang lots of leaks—some ships snuck through and oil found a way out through pipelines. And, in addition to coordinated reserve releases, China saved the day by buying much less than usual.
 
Even adding a fudge factor to all that, though, there’s a huge gap in the math.
 
“It’s mystifying to us,” says Eric Nuttall, senior portfolio manager at energy-focused investment firm Ninepoint Partners.

Billionaire Barry Sternlicht's Starwood REIT landed a $1.02 billion cash infusion from Apollo Global Management giving Apollo a 41.5% stake in a newly formed joint venture holding roughly 120 of Starwood's affordable housing complexes with locations that weren't specified. Starwood, a nontraded REIT, will retain the remaining 58.5% stake as well as day-to-day operational and asset management control.

Starwood among the nation's largest apartment owners, with more than 63,000 units as of the end of the first quarter. About 40,000 are market-rate apartments, and roughly 23,500 are affordable units concentrated in high-growth Sun Belt markets, including Texas and Florida. As of March 31, Starwood owned 598 income-producing properties valued at roughly $22.4 billion and reported occupancy of about 94%.

Mortgage applications are trending down

Fannie Mae's Purchase Application-Level Index (PALI) and Refinance Application-Level Index (RALI) are sets of weekly indices sourcing data from our automated underwriting system, Desktop Underwriter® (DU®), to provide timely and ongoing tracking of mortgage application activity and historical trends.

During the hotel real estate investment trust's second-quarter earnings call, Jim Risoleo, chairman, president and CEO of Host, said the company now expects both its comparable hotel RevPAR growth and comparable hotel total RevPAR growth to both range between 4.75% to 5.25%. That's an increase of 75 basis points and 125 basis points, respectively, from their midpoints in the company's previous full-year outlook.

• "This reflects the outsized rate growth we achieved in the first half of the year, and our expectation that rate growth will normalize in the second half of the year," he said.

• Revenue per available room growth in the second quarter topped Host's expectations, with broad-based strength across both markets and business mix, Risoleo said. Sustained luxury resort demand, strong group performance and elevated rates associated with World Cup matches drove growth for the portfolio.

• “We estimate that the event contributed approximately 160 basis points of RevPAR growth in the second quarter,” he said. “For June alone, RevPAR in our World Cup markets grew 15% compared to 12% in non-World Cup markets.”

• Maui, New York and San Francisco led that growth with improvements in key business transient markets also adding some performance tailwinds, he said. Maui in particular saw RevPAR grow 14% and total RevPAR grow 11%, reflecting strong demand growth as occupancy grew more than 8 percentage points in the quarter.

• Group room revenue grew 7% during the quarter, the result of fairly even room-night and rate growth, he said. Host’s portfolio sold 1.1 million group room nights during the quarter, and its definite group room nights on the books for 2026 now stand at 3.8 million. Total group revenue pace is up more than 5% compared to the same time last year.

• Food-and-beverage revenue grew 6% during the quarter while other ancillary revenue remained flat, Risoleo said. The growth in on-property spending was offset by a decrease in attrition and cancellation revenue compared to last year’s tough comparisons.

Upon closing, the combined company will operate in 26 markets and approximately 520 active communities across the Southeast, Mid-Atlantic, Texas, the West, and the Midwest.

Dream Finders and Beazer will create the 6th largest homebuilder in the US. Both builders currently focus on the entry level or move up buyer

July's average asking rents for Los Angeles apartments rose just 0.02% from June, well below the market’s historical July average gain of 0.28%. Asking rents reached $3.02 per square foot, while annual rent growth slipped slightly into negative territory at about -0.01%.

Nationally, apartment rents also flattened in July, but the broader market continued to outperform Los Angeles. U.S. annual rent growth improved to 1.0% from 0.8% in June, and several Northern California markets, including San Francisco, San Jose and the East Bay, ranked among the strongest performers.

While recently completed luxury high-rises continue to post strong occupancy and command some of the highest rents in the metropolitan area, mid-rise properties are facing a much more difficult leasing environment.

The divide has widened even as downtown remains one of Houston's most desirable rental locations. Average asking rents stand at roughly $2,300 per month, roughly $1,000 above the metropolitan average, supported by the area's concentration of high-paying jobs, entertainment venues, restaurants and cultural attractions.

LS update on DFW growth: In the DFW area, tremendous growth has occurred in the surrounding counties as growth has moved outwards.

By absolute numbers and in percentage growth, top 5 growing counties in DFW

Parker County is growing fastest on a percentage basis

The Fed’s decision Wednesday to keep overnight rates unchanged sounds like it would have been clearly bullish, but stocks sold off just after Chair Kevin Warsh’s press conference. (They’ve since rebounded mightily).
 
Also following Warsh’s Q&A, long-term Treasury yields hit a 19-year high. That extended what bond watchers call a “bear steepener.”
 
There are two takeaways when the Treasury yield curve’s slope is positive and increasing, like it is now. Steepening is welcome when it’s a reaction to rising growth expectations. Examples include 2003, 2009 and 2021, times when the economy was recovering from recessions. That pattern this many years into an economic boom is reminiscent of 1966 and (gulp) 1987.
 
Inflation has now been above the Fed’s target for more than five years, and there’s little sign of job-market weakness. That seemed like a time for Warsh to back up his recent tough talk about price stability with action, or at least a call to future action.
 
As the Journal’s Greg Ip wrote, though, the central bank “isn’t a neutral umpire, it is the most important player in the game.” And, when it comes to inflation, an ounce of prevention is worth a pound of cure. Rising yields and uncertainty about central banks’ commitment to stable prices, hallmarks of the 1970s, later required draconian rate hikes to repair.
 
Then there’s a new worry—America’s fiscal health. Debt held by the public is on track to blow past $40 trillion very soon. Buying the longest-term debt requires faith that the pile of IOUs will be honored.
 
Nobody expects the U.S. to actually default, but the release valve for high debt and deficits might be a future inflation surge. The real (inflation-adjusted) yield on the long bond just hit a multidecade high, too.
 

Bloomberg: July 31, 2025, 2:01pm EST

Brandon Roth, IPA as of July 27, 2026 Agency Pricing

The longer commodity prices remain elevated, the greater the inflationary burden on US consumers.

The extent to which AI has impacted job growth remains a subject of debate among economists. A look at the occupational data shows how the composition of job functions has changed across industries. Many of these shifts have been underway for more than a decade, but the pace of change has accelerated since 2022, particularly in routine office support roles, as productivity enhancements, including the use of AI, have become widespread.

Take office and administrative support roles. They account for more than 11% of all jobs, the largest category, according to the most recently released data from May 2025. These roughly 17.7 million clerical and customer-service-oriented roles are also some of the most widely dispersed. No single industry accounts for more than 16% of the total. And among industries, no single sector relies on office and administrative workers for more than 30% of jobs.

These occupations have also seen the most significant decline in raw numbers and as a share of the total workforce since 2019. While the outsourcing and automation of customer service roles has been a long-standing trend, the pace of that decline has accelerated since 2022.

Management occupations, on the other hand, continued to increase their share and now account for more than 7.2% of all occupations. While the pace of that growth slowed between 2022 and 2025, growth in management occupations was noticeable even in slower-growing industries.

Few ideas in finance have been as successful as the 401(k), which has helped some 70 million American workers plan for their later years and sock away $10 trillion in the process. Even so, recent surveys showed Americans are having a harder time saving for retirement because of rising living costs. Housing, car payments, healthcare and other everyday expenses are taking priority over long-term retirement planning. Higher costs are also prompting more Americans to tap into their retirement accounts despite high penalties and taxes for doing so.

As the number of logistics facilities built over the past several years has soared, many tenants have opted to relocate to newly built space rather than renew leases in older buildings. This trend has been especially pronounced among logistics firms occupying more than 100,000 square feet.

Mixed-use areas where people can live, work, shop and socialize are commanding some of commercial real estate's highest rents and occupancy rates, according to a new report.

These lifestyle districts, or walkable neighborhoods, outperform traditional single-use development on nearly every major financial measure because residents, workers and visitors spend more of their time and money there, real estate services firm JLL found in its study. Chicago-based JLL describes that dynamic as a "closed-loop ecosystem."

From New York's Hudson Yards and Chicago's Fulton Market to Georgetown in Washington, D.C., these districts combine housing, offices, retail, restaurants, hotels and entertainment built around how people want to live, work and spend time. JLL estimates almost 1 billion square feet of this real estate exists in the United States, representing roughly 4% to 5% of the nation's total inventory.

How do they outperform standalone assets? Occupancy is higher.
-Multifamily rents: 48% higher than comps
-Hotels: 45% average daily rate premium
-Retail rents: 46% higher
-Office rents: 38% higher

Residents of Fulton Market spent two-thirds of their shopping and leisure time in the neighborhood, while residents of the nearby office-heavy West Loop spent just 18% of that time in their district, according to JLL. In Northern Virginia, an added 21% of workers stayed to shop, dine or relax after work instead of heading straight home.

If you can’t sell your house, what do you do next? Some sellers give up and list the home for rent.

The May Case-Shiller house price index released this week, the seasonally adjusted National Index (SA), was reported as being 79.3% above the bubble peak. However, in real terms, the National index (SA) is about 7.4% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 0.5% below the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the inflation adjusted price would be $461,000 today (a 54% increase). That is why the second graph below is important - this shows "real" prices.

Nominal House Prices: The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA in nominal terms as reported. In nominal terms, both the Case-Shiller National index (SA) and the Case-Shiller Composite 20 index (SA) are just below the all-time high.

Real House Prices: The second graph shows the same two indexes in real terms (adjusted for inflation using CPI). In real terms (using CPI), the National index is 4.8% below the recent peak in 2022, and the Composite 20 index is 4.5% below the recent peak in 2022.

Home Price Indices for May ("May" is a 3-month average of March, April and May closing prices). March closing prices include some contracts signed in January, so there is a significant lag to this data. The National index decreased 0.05% month-over-month (MoM) seasonally adjusted. This was the 3rd consecutive month with a MoM decline,

WSJ: Back in May, traders in the futures market were acting as if the chance of a quarter point hike was close to zero. Peace had broken out in the Middle East, and oil prices were having their weakest quarter in years, easing inflationary pressure.
 
That implied probability has risen to about one-third. New Fed Chair Kevin Warsh has abandoned his predecessors’ hints, called “forward guidance,” pledging to let the data talk instead.
 
So the creeping suspicion that the Fed will hike for the first time in more than three years isn’t crazy. At the June meeting, Warsh’s first as chair, nine of 18 participants (only 12 of them vote) foresaw at least one hike this year, up from zero at the previous meeting.
 
Now oil prices are up by a third just this month, reigniting inflation fears. And Warsh told Congress just 10 days ago that he’d have “no tolerance” for inflation, which has now been above the Fed’s target for more than five years.

The US 30-year bond yield is trading above 5% for the longest stretch since the dawn of the financial crisis, echoing investor concerns about a growing debt pile and sticky inflation.

So far this year, the 30-year has traded beyond 5% for 27 days — or about 19% of all sessions. It traded above that level for 50 days in 2007. Unlike that year, however, the Federal Reserve’s benchmark is currently 150 basis points lower, suggesting investors are demanding even more compensation for holding the longest maturity sold by Treasury than at the start of the subprime debt implosion.

What is middle income anyway? Defining “middle income” is more complicated than it sounds. There is no single, universally accepted threshold, and where someone falls on the income spectrum depends on factors such as household size, education, marital status, age and geography. For example, the median or middle-income level is much lower if you’re single or have only a high-school degree and more than doubles for those who are married or college-educated. Generally, though, the Census suggests that middle income ranges from $60,000 to $130,000 annually for ages 25 to 74 years old.

Middle-income households’ spending contributed nearly a quarter of GDP in 2024. BofA credit and debit card data suggests this cohort’s spending growth has improved since last year. And though their overall card year-over-year (YoY) spending growth has eased slightly compared to lower-income families, they are still outpacing them on discretionary spending growth

Groceries, hobbies and general merchandise depend on the middle

As of June 2026, inflation outpaced middle-income households’ after-tax wage growth, based on a comparison of BofA deposit data and CPI inflation data from the

BLS

A joint venture between Conor Commercial Real Estate and Globe Corp. has landed nearly $79 million in permanent financing for a newly completed luxury apartment complex in East Dallas.

LS Notes: There are many reasons why a project may lag in performance compared to other projects from location, parking, quality, floorplans, pricing, density to volume of supply. But it doesn't help when you are delivering the same unit mix everyone else is.

This project is studios, 1 and 2 bedroom units.

Where are the 3+ bedrooms, townhomes with direct access garages, or even apartments with private garages in the shared garage space

-Dallas, just east of downtown.
-5 stories
-327 units
-Marketed as a high-end property with a mix of studio, one- and two-bedroom apartments averaging 832 square feet of space. Finishes include quartz countertops, hardwood-style flooring and stainless-steel appliances. These are no longer considered high end- they are basic to middle of the road/ expected as the delineation of luxury has been ameliorated by cheaper looking materials.

Within a 10 mile radius of this property, built since Jan 2015, there are 316 buildings that are at least 50+ units

5% are 3+ bedroom

People who want 3+ bedrooms

-Families with kids
-DINKS who want a guest room & a home office or 2 home offices or a workout or gaming room
-Boomers downsizing- they have a lot of stuff, they may want to host friends and family and they no longer want the maintenance of owning a home

Over half of new single-family homes built in 2025 were two or more stories, according to the Census Bureau’s Survey of Construction. But the share of homes started with two or more stories fell in 2025, reflecting increased building activity in regions that prefer single-story homes.

Nationwide, the share of new homes with two or more stories fell from 52.5% in 2024 to 51.4% in 2025, while the share of new homes with one story rose from 47.5% to 48.6%. This share varied significantly across the nation.

Two-story homes remain more popular in most areas of the country. But the areas seeing the most new homes built tend to prefer single-story homes.

Even in areas that prefer multistory homes, the single-story share is growing. For example, the single-story share in the Pacific has increased in seven of the last eight years, from 32.7% in 2017 to 47.5% in 2025. This could reflect the increased cost to build homes and developers focusing more on moderate and low-cost housing.

The median lot size for newly built single-family detached homes edged up slightly in 2025. But the increase was modest and did not alter the broader trend toward more compact neighborhood development.

Data from the Census Bureau’s Survey of Construction show that the median lot size of a new single-family detached home sold in 2025 increased slightly to 8,543 square feet, up from 8,506 square feet in 2024. Although this represents a small year-over-year increase, the typical lot remains under 1/5 of an acre and well below historical levels.

Close to two-thirds (64%) of new single-family detached homes were built on lots under 9,000 sq. ft. (1/5 of an acre or less). In 1999, just 46% of new homes were built on lots under 1/5 of an acre.

New England is known for strict local zoning regulations that often require very low density. Therefore, it is not surprising that single-family detached spec homes started in New England are built on some of the largest lots in the nation, with half of the lots exceeding 0.4 acres. The East South Central division is second on the list, with the median lot occupying 0.3 acres.

At the other end of the spectrum, the Pacific division, where densities are high and developed land is scarce, has the smallest lots, with half of the lots being under 0.13 acres. The bordering Mountain division also reports typical lots smaller (0.15 acres) than the national median.

The latest NAHB builder and developer regulatory surveys were both conducted in March of 2026. Table 1 shows the estimates of regulation as a percentage of both the lot cost, and the final house price. The table shows the share of developers subject to the regulation and the average cost of the regulation across all homes (i.e., with the “zeroes” included in the average).

As of this writing, the first estimate of the January 2026 average sales price is available from the Census Bureau, and is $499,500. Applying this to the percentages from Table 1 shows that the regulation captured by the NAHB surveys accounts for $131,734 of the price of an average new home built for sale. Of this, $46,795 is attributable to regulation during development of the lot. The remaining $84,939 is due to regulation imposed during construction of the single-family structure

June’s Monthly Treasury Statement contained some unwelcome news for the head of the department that produced it.

The report showed the federal deficit growing again, making Treasury Secretary Scott Bessent’s avowed goal of getting the shortfall down to 3% of gross domestic product before the end of Trump’s second term (it’s currently running at about 5.7% of GDP) look more and more like a pipe dream.

The U.S. trade deficit rose to $77.6 billion in May, up 42.2% from April, its largest deficit since March 2025, when businesses were bulking up imports to get ahead of broad-based tariffs on foreign goods announced by the Trump administration.

This time around, the month-to-month increase in the deficit was due both to higher imports and lower exports. Imports grew by 3.3% in the month to $395.3 billion, while exports fell by 3.2% to $10.5 billion, the first monthly decline this year. On a year-over-year basis, imports grew by 13.3% in May, faster than exports, which grew by 12.6%.

WSJ: Expect pump prices to remain high even if oil prices give back their recent gains. Refining capacity is strained, and fuel markets don’t have much of a buffer.

An unprecedented transfer of wealth in the coming decades is likely to disproportionately benefit America’s most affluent families, boosting their fortunes by trillions of dollars, a new report from Visa says. Almost three quarters of those expected to inherit from Baby Boomers are already in the top 10% by household net worth.

NFP, an AON company 2026 Retirement Trends Report : Confidence in retirement preparedness remains low, with more than two-thirds of American workers unsure they will be able to retire comfortably. That uncertainty is shaping how they engage with planning, while immediate financial pressures are limiting their ability to act. For many, essential expenses like housing, car payments, healthcare and everyday costs are taking precedence over long-term retirement savings.

For the first time since the start of the year, small business profitability growth turned positive in June. Revenues are growing, but not fast enough to fully offset ongoing cost pressures, which has led to a prolonged period - more than six years - of small business owners planning to raise prices to combat falling sales expectations. Revenues have not been keeping up with costs.
• Small firms are also contending with persistently higher interest rates. Still, rates have come down from their 2022 peak, and Bank of America loan payment growth per small business client has increased, suggesting modest demand although capex plans for small firms remains muted.
• At the same time, small business hiring activity improved in June from earlier this year. This was especially true for small finance, insurance and real estate firms, suggesting AI hasn't affected job demand in white collar industries.

The capital markets landscape in Dallas-Fort Worth’s office market is marked by more for-sale listings.

Even as the broader landscape remains fractured, the market's durable demand in North Texas and a dearth of new supply make for rising rent growth and potential for improving net operating income.

Sales activity continues to rise for office buildings. In the year ending the second quarter, total volume was $8.1 billion, almost double that of the same period last year. The last 12 months have been marked by several trophy buildings, including The Link at Uptown, while some owners face refinancing pressure in underoccupied, uncompetitive buildings.

Big landlords are being nudged to pour cash into the build-to-rent sector instead. This means taking on development risk and constructing entire rental neighborhoods from scratch. The benefit of constructing whole rental communities in one area is that they are much cheaper to maintain than homes that are scattered across dispersed neighborhoods.

Returns on build-to-rent investments don’t look high enough to compensate for the risk. The average cap rate—a measure of the operating income these rental neighborhoods generate as a percentage of the value of the assets—on developments is around 5% to 5.5% according to CBRE. With yields on 10-year Treasury bonds currently around 4.6%, that isn’t hugely appealing for an increasingly sensitive sector.

Investors also have fewer options to sell build-to-rent assets than scattered-site housing. As single-family homes are in demand, investors can unload individual units to regular buyers at prices that are 10% to 20% higher than what an investor would be willing to pay. Build-to-rent communities are hard—or impossible under some zoning rules—to sell off individually to consumers this way.

$112.5 million purchase of a development in west Phoenix, marking the priciest such transaction on record for the state of Arizona.

Golden Horizon Enterprises acquired the Bungalows on Camelback, a 334-unit development that opened in 2024; the developer and seller is Scottsdale-based Cavan Cos.

The transaction set a high watermark for build to rent sales across the country so far through 2026 and sets a record for Arizona, topping the $95.75 million sale of Bella Encanta in Mesa in April 2025.

Institutional investors like Stockbridge Capital Group, Fundrise and Blackstone have made multiple acquisitions for build to rent developments totaling more than 100 units since the start of 2020.

Phoenix leads the nation in inventory that's build to rent. The 334-unit Bungalows on Camelback is part of some 33,000 existing properties that are build to rent for-rent townhouses across Phoenix, with another 2,200 in the development pipeline.

June housing starts (blue) +19% m/m vs. +11.2% est. & -15.2% prior; building permits (orange) -3% vs. +0.1% est. & -0.9% prior

The two-year US Treasury yield climbed back toward last month’s peak amid a selloff in global bond markets. The moves were spurred in part by rising oil prices and inflation worries. That short-term yield, which closely tracks expectations for the Federal Reserve’s monetary policy, rose as much as five basis points to 4.23%, within a basis point of its June 22 peak. That was the highest since February 2025. The 10-year yield climbed as much as four basis points to 4.59%, the highest since late May.

“Bond investors are wary,” said Bryce Doty, a bond fund manager at Sit Investment Associates. “If oil prices are starting to go up and there’s a hard message that they’re going to do whatever it takes to have price stability, yields are going higher.”

The Texas Stock Exchange, a new, purely electronic national securities platform, is scheduled to launch live trading this month as a rival to the storied NYSE and Nasdaq, where regulations and costs have been increasing. Plans for the Texas Stock Exchange were announced two years ago with backing from some of the world's largest investors, including BlackRock, Citadel Securities and Fortress Investment Group.

DFW now ranks as the nation's second-largest financial market outside of New York City, according to the Urban Land Institute's 2026 Emerging Trends in Real Estate report.

Morgan Stanley is planning to build a $1.3 billion hub in Uptown Dallas, and Goldman Sachs is nearing construction on a highly anticipated two-building, 800,000-square-foot campus. Bank of America is building its new namesake office structure with 30 stories and more than 500,000 square feet with a potential rolling ticker for the Texas Stock Exchange, just blocks from the Federal Reserve Bank of Dallas.

Since 2022, South Florida has attracted major financial institutions, including Morgan Stanley, Wells Fargo, Merrill Lynch, Goldman Sachs, Elliott Management and, perhaps most notably, the headquarters relocation of the $67 billion hedge fund Citadel and its billionaire CEO, Ken Griffin.

Miami International Holdings opened its first securities facility with a trading floor and electronic exchange in 2025 with the Miax Sapphire options exchange in the city's Wynwood arts district.

Heading into the summer, consumer spending momentum was very strong, with total credit and debit card spending rising 6.3% year-over-year (YoY) in June - the strongest growth in over four years - according to Bank of America internal card data. With
gasoline prices falling, the increase in spending growth is almost entirely a discretionary story.

Some of the strength in June was likely driven by online promotions and the FIFA World Cup 2026™. On the latter, we see comparatively strong increases in spending growth in host cities versus other US cities, particularly in food services.

There has been a notable convergence in both wages and spending across income cohorts in recent months. In June, lower-income households' after-tax wage growth rose above that of middle-income households. Whether these trends persist into the
second half of the year will hinge on whether underlying labor market momentum is sustained.

Norway’s sovereign wealth fund is making a $500 million bet on U.S. neighborhood shopping centers, backing grocery-anchored retail and other open-air properties that continue to outperform much of the retail sector.

Norges Bank Investment Management, which manages the roughly $2.2 trillion Norwegian Government Pension Fund Global, partnered with Charlotte, North Carolina-based Asana Partners to launch Asana Partners Strategic Partners I, the firms announced.

The investment highlights growing institutional demand for grocery-anchored retail, a property sector favored for its stable cash flow and resistance to e-commerce disruption. As investors pull back from more challenged office and retail formats, centers anchored by supermarkets and other necessity-based tenants have become increasingly attractive targets.

NBIM’s $500 million commitment gives it a 49% stake in the venture. Its first investment will be the acquisition of a 50% interest in a portfolio of grocery-anchored shopping centers in what Asana described as “desirable growth markets.” Neither company disclosed the properties, markets or deal value.

The venture will target stabilized, income-producing open-air retail properties across the United States, Asana said, including grocery-anchored centers, smaller open-air centers without big-box tenants, street retail and mixed-use properties. Asana controls about 4.7 million square feet of U.S. retail space, according to CoStar data. Its most recent acquisition was the $20.5 million purchase last month of Crown Valley Center, a Smart & Final-anchored shopping center in Laguna Niguel, California.

Brookfield is seeking to capitalize on investor appetite for artificial intelligence support systems by taking one of its data center companies public in an offering that could raise up to $1.35 billion, the latest AI-related company to sell shares to the public. As of March 31, Csquare owned and operated 64 data centers across 21 markets in the United States, Canada and the United Kingdom, providing about 389 megawatts of sellable capacity. The company serves more than 1,700 customers, with no single customer accounting for more than 7% of revenue, according to the filing.

The national median rent increased by 0.4% in June, and now stands at $1,385. This marks the fifth straight monthly increase, with the market now in the midst of the busy summer moving season.

Rent prices nationally are down 1.2% compared to one year ago. Year-over-year rent growth has now ticked up for two straight months, after bottoming out in April at the lowest level that we’ve seen in our estimates going back to 2017. The national median rent has now fallen from its 2022 peak by a total of 4%.

The national multifamily vacancy rate currently stands at 7.2%; after hitting a new record in February, the vacancy rate is now decreasing for the first time in over four years.

Units are taking an average of 30 days to get leased after being listed, which is down from 31 days last month, but still three days longer than at this time last year.

The San Antonio, TX metro continues now has the softest conditions among the nation’s large rental markets, with the median rent there down by 5.0% over the past year. At the other end of the spectrum, the San Francisco metro now sits atop our rankings of fastest year-over-year rent growth at +7.4%.

The fast-rising costs of owning a home have some young Americans questioning whether buying a house is still a good investment. Less than a quarter of Americans aged 18 to 39 say buying a home is a very good investment, compared with 38% of those over 60 years old. Homes are a worse investment (compared to buying stocks) for first-time buyers today because wages haven’t kept up with surging prices and ownership costs, said Susan Wachter, a professor of real estate and finance.

June 2026 asking prices fell again at a record pace—down 2.5% year over year. That’s the steepest annual drop in Realtor.com data since 2017 and the eighth straight month of declines. List prices per square foot fell 2.1% and are declining in 33 of the top 50 metros.

The 26-month streak of homes taking longer to sell is over. Median time on the market held at 53 days in June—exactly matching last June—ending more than two years of consecutive year-over-year slowing. The median time a home spends on the market is now identical to the pre-pandemic norm.

Spring’s momentum looks to carry into summer. New listings rose 2.4% year over year, and pending sales grew for a seventh straight month (+3.7% YoY)—a streak not seen since January through July 2021. Contract cancellations held below last year (6.9% vs. 7.3%), and there are no signs of a repeat of last summer’s delisting surge: Delistings are down nearly 10% year over year in June.

Two Americas, four years from peak prices. Since list prices peaked nationally in June 2022 at $449,000, asking prices are down 7.3% in the West and 3.5% in the South—but up 10.0% in the Midwest and 12.6% in the Northeast. Prices since the 2022 peak have fallen in 28 of the top 50 metros and risen in 22: a true measure of how fragmented housing has become since mortgage rates climbed.

The unemployment rate fell to 4.2%, the lowest in a year.
Normally that's good news, but not this time.

-720,000 people left the labor force. They aren't even looking for jobs anymore.
-507,000 people are no longer employed.

The employment-to-population ratio fell to 59%, the lowest in about 5 years (since Oct. 2021).

Prime-age labor force participation rate June: 83.3%
Primage-age labor force participation rate May: 83.9%

US hiring slowed sharply in June even as the unemployment rate fell, curbing some of the budding momentum in job growth this year.

The Bureau of Economic Analysis’ initial report on consumer balance sheets for May revealed the first monthly increase in inflation-adjusted disposable personal income since before the start of the military conflict in Iran. Yet it was flat compared to a year ago.

Nominally, the increase was 0.7%, outpacing inflation for the first month since January. A one-time farm subsidy payment artificially boosted that total, more than doubling farm proprietors’ income and accounting for one-third of monthly personal income growth.

By comparison, wages and salaries, which typically account for the bulk of personal income, were flat on an inflation-adjusted basis.

Balances on consumer debt disproportionately held by lower-credit borrowers have moved higher.

Overall credit card balance growth has been stable over the past year, growing 5.9% annually through the first quarter, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit. Balances in the “other debt” category, which includes the unsecured personal loans lower-credit borrowers are more likely to take out, increased by 3.7% annually, the highest year-over-year increase since the first quarter of 2024.

Over the course of the past two decades, the US has lost 2,000 golf courses and 7,000 bars and nightclubs, and Americans now own 1.3 million fewer boats. It’s prohibitively expensive to open a new summer camp and practically impossible to build a beachfront resort or marina. Venue shortages afflict musicians looking for performance spaces, children looking to play in local sports leagues and adults looking to go out dancing. The best time to book a rental for this summer was last summer, and the best time to book for next summer is … well, it may already be too late.

America appears to be suffering from a fun shortage. For the industries supplying recreational amenities, this deficit is a business opportunity. But for everyone not positioned to profit from the trend, it’s a source of stress and frustration that’s been building for a while. It also has broad ramifications for the future of the economy, society and politics. On the eve of the country’s 250th birthday, it’s worth pondering whether the pursuit of happiness has become more difficult, writes Ben Steverman.

Invesco is accelerating its push into commercial real estate lending, pricing a $1.2 billion commercial real estate collateralized loan obligation backed by its fast-growing private credit real estate investment trust.

The deal, issued through Invesco Commercial Real Estate Finance Trust, or INCREF, marks the REIT's second CRE CLO in about 13 months and comes as its loan book has rapidly expanded. The lender also has a third transaction lined up for market, signaling plans to continue recycling capital into new loans.

INCREF's commercial real estate loan investments climbed to about $6 billion as of the end of May, up from $3.55 billion a year earlier — roughly a 70% increase, according to a filing with the Securities and Exchange Commission.

INCREF is the second-largest nontraded net asset value mortgage REIT, according to CoStar data. Among other growing nontraditional lenders, Federal Standard's FS Credit Real Estate Income Trust reported a nearly $8 billion loan portfolio in May, just about $500 million more than a year ago. Fortress Credit Realty Income Trust reported a portfolio of $2.9 billion, up from $1.3 billion a year ago.

The firm's real estate arm ranked fourth out of 30 firms in the Mortgage Bankers Association's 2025 origination rankings for investor-driven lenders — a group that includes REITs, debt funds, private credit firms and separately managed accounts — based on closed volume.

In May, INCREF closed five loans, including a $60 million loan on an industrial portfolio in Pompano Beach, Florida; a $115 million loan on a multifamily property in Philadelphia, Pennsylvania; a $74.7 million loan on a multifamily property in Brooklyn, New York; and $229.5 million across two loans on industrial portfolios spanning multiple U.S. markets.

The closed securitization, INCREF 2026-FL2, bundles 36 loans backed by 103 properties across 18 states and 29 metropolitan areas, according to a Fitch Ratings report. The portfolio is weighted about 65% to apartments and 30% to industrial, with just 3% allocated to office and 2% to self-storage, largely avoiding the struggling office sector.

The New York City region accounts for the largest geographic concentration at 15% of the pool, followed by greater Philadelphia at 8.9% and the Dallas market at 7.7%, according to Fitch.

The largest loan in the deal is a $371.4 million financing to Timberline Real Estate Ventures and Ares Management for a student housing portfolio comprising seven properties with 5,288 beds across Georgia, Texas, Oregon, North Carolina and South Carolina, Fitch said. The largest asset in that portfolio, The Hayward in Eugene, Oregon, formerly known as 13th & Olive, contains 1,308 beds.

KKR acquired apartment complexes in Seattle and its Eastside suburb, Redmond, amid signs that multifamily investment could be picking up in the region.

The New York City-based firm bought Cru at Willows in Redmond for $78 million and the Baldwyn apartments in Seattle’s Northgate neighborhood for $94 million in separate deals arranged by CBRE, according to King County property records.

The seller and developer of both properties, Seattle-based Goodman Real Estate, finished construction of the 195-unit Cru at Willows and the 235-unit Baldwyn in 2024.

The sales come as apartment transactions are showing signs of recovery after a period of softened demand and stalled rent growth in the Puget Sound region. Greater Seattle’s average apartment vacancy rate was 6.7% in the second quarter, edging down from 7.1% in the same period last year, according to CoStar.

The largest concentration of office loans in a commercial mortgage-backed securities deal this year is heading to market, a potential sign that Wall Street’s appetite for the long-troubled property type may be returning.

The deal, BANK5 2026-5YR23, includes $306.3 million in loans backed by office buildings — the highest office exposure in any multiborrower CMBS offering since October 2025, according to CoStar data. By comparison, similar transactions sold earlier this year had about $135.2 million in office loans on average, less than half the amount in this deal.

Morgan Stanley is leading the securitization, doing the job of bundling mortgages from multiple properties and selling the cash flows to bond investors. The bank’s willingness to take on heavier office exposure suggests a tentative shift in sentiment, even as risks in the sector persist.

A record 33% of household wealth is now held by Americans that are 70 years of age and older.

LS comment: There is an opportunity and market gap to build real estate targeted for the aging population. For master planned communities in ground up phases to think about how the aging population wants to interact with the built world. Moving to 55+ or senior housing is dreaded and considered waiting to die vs. many active seniors want to live in mixed demographic neighborhoods. However they need to be designed and built for changing mobility, healthcare needs, accessibility and options for the wide array of wants and needs. You cannot easily build this into communities after the fact. Where is parking, how many steps (not elevation but walking steps) to retail or units, where are elevators, how many flights of stairs, is there walkability or the option for not having to be car dependent? Where are the housing units sited within the community and what is the housing mix? Small 1 story single family built for accessibility with wider hallways, lower storage access, lower counters? Cottage courts, high density multifamily dispersed within the community and closer to outdoor amenities, community centers and retail? What are the amenities? Are they cost centers like gyms and dog runs OR revenue generating retail and services? Medical retail cannot be planned for after the fact on ground floor post tension slabs

The Federal Reserve's policymaking Open Market Committee held its first meeting under new Chairman Kevin Warsh last week.

The committee left the target range for the bank’s main policy interest rate unchanged at 3.50 to 3.75%. It has been at this level since December of last year, and most observers had expected it to remain in place. However, the current economic environment is clearly different from what it was six months ago.

Nine members believe at least one rate increase will be appropriate, while an equal number sees the target either easing downward or remaining unchanged. This degree of division within the committee has not been seen in some time, and it is notable that, in a departure from previous meetings, the chairman did not submit his own projections.

The divide comes as surging inflation has brought the committee's price stability mandate to the fore, threatening to muscle aside concerns about weakness in the labor market. Core inflation measures have been advancing at a year-over-year rate well above the Fed’s 2% target for more than five years.

The committee’s more hawkish shift is supported, at least to some degree, by a labor market that has outperformed expectations so far in 2026. Aside from healthcare, only the leisure and hospitality industry employs as many as 15% more workers than it did five years ago, and it was only in September of 2025 that it finally recovered all the jobs lost during the COVID-19 pandemic. Knowledge-industry employment, in particular, remains underwater, having shed more than 700,000 jobs since peaking in April 2023.

Liz Ann Sonders, Schwab: May durable goods orders sank -4.4% y/y vs. +19.2% prior and fell into negative territory for the first time since February 2025

Supercore CPI (blue) and PCE (orange) inflation both continued to rise in May, up +3.7% and +3.9% y/y, respectively…moving further away from Fed’s 2% target

Around the world, everything from grocery prices and water bills to health insurance costs and even rents are facing growing pressure from extreme heat, droughts and heavy rains, in ways that even the savviest personal finance guru may not be able to plan for.

Food is one of the earliest categories clearly being affected, as extreme heat and droughts disrupt harvests. As one-off weather shocks become more regular events, there’s a risk that this kind of climate inflation could become an economic fixture.

Official data is in today, and US solar power generation continues to grow rapidly, up 15% compared to this time last year.

Solar power made up 12% of US electricity this April, a new record high that's up from 10.8% last year. Over the last twelve months, solar has made up 9% of US electricity, another record high.

Solar power also continues to skyrocket in Texas, with generation up 24% compared to last year. Over the last twelve months, solar has made up 11.6% of Texas' electricity, a record high.

Data center development in the United States has surpassed spending on all other commercial buildings combined, according to Jason Thomas, head of global research and investment strategy at Carlyle. Since the launch of OpenAI's ChatGPT in November 2022, completed data center projects have increased roughly 220%, while all other real estate development is up less than 10%.

Capital is following that momentum. Funds with exposure to digital systems raised over $100 billion last year — double the 2024 total — and accounted for roughly half of all infrastructure fundraising, according to financial data provider Preqin. Private transactions now routinely top $10 billion, including a $40 billion deal in 2025. Debt financing has followed suit, rising from $27 billion in 2020 to $92 billion last year, according to JLL.

"We may soon reach a point where data centers consume virtually all the economy's net private capital formation," Thomas warned in an outlook earlier this year.

It's "a lot of eggs put into this basket, especially when considering uncertainties about depreciation rates, hardware replacement cycles, and monetization timelines."

Those concerns are spreading. Companies have recently disclosed risks ranging from technological obsolescence to geographic concentration and tenant dependency.

MSCI reported in April that data centers have become a core institutional allocation in private markets, with exposure across infrastructure, real estate and private equity closed-end funds totaling $122 billion as of the third quarter.

That buildup comes as other sectors face structural constraints. A National Low Income Housing Coalition report found a shortage of 7.2 million affordable homes for low-income households, leaving just 35 affordable and available rental homes for every 100 extremely low-income renter households nationwide.

Meanwhile, the office market remains under pressure.

"The shift of capital away from traditional real estate has created a repricing and a meaningful thinning of competition in sectors that still have strong long-term fundamentals," said David Steinbach, global chief investment officer at developer Hines.

Construction starts across the residential, office and industrial sectors have dropped as much as 50% to 80% from cyclical peaks, he said, citing data from real estate services firm CBRE.

The U.S. apartment market is beginning to stabilize as supply pressures ease, with improving conditions emerging in a growing number of markets.

The supply of new homes in the US crossed above 10 months in May. That's a level we've previously seen only during recessions or the 2022 inflation spike.

Fed Chair Kevin Warsh’s “unambiguously hawkish” message yesterday surprised markets as he clearly prioritized fighting inflation in the short term, said Kay Haigh at Goldman Sachs Asset Management. Traders quickly piled into bets that policymakers will boost interest rates sooner than had been expected.

Investors now see the odds of a hike at the September meeting of the Federal Open Market Committee at more than 80%, and more than one move higher priced in for October, according to data compiled by Bloomberg. On Tuesday, before this week’s Fed meeting, traders didn’t see the likelihood of an increase until December.

Oil has declined since President Trump announced an interim deal with Iran to extend their ceasefire and gradually reopen the Strait of Hormuz. In the near term, even as the flow of oil through the Strait may increase meaningfully, markets probably already reflect the agreement, says Jerome Dortmans, co-head of Global Oil and Products Trading in Goldman Sachs Global Banking & Markets.

Brent oil has fallen to about $76 per barrel (as of June 18), from a high of around $118 in April during the war between Iran and the US and Israel.

The Census Bureau's latest Quarterly Financial Report, which covers retail corporations with at least $50 million in assets, showed that first-quarter after-tax profits grew at a meaningfully faster rate than sales.

Seasonally adjusted after-tax profits totaled $64.5 billion in the first quarter, up 7% from the fourth quarter of 2025 and nearly 40% above year-ago levels. Sales increased to $1.126 trillion, rising 1.1% quarter over quarter and 4.7% year over year. This divergence pushed after-tax profit margins to 5.73%, up from 5.41% in late 2025 and 4.31% one year earlier.

Profit growth is being driven largely by margin expansion, not growth in consumer demand. This means that, at least among larger retailers, the ability to scale operations and aggressively manage costs is translating into higher earnings per dollar of revenue.

Those expanding profits have now extended a multiyear recovery following a compression of margins in 2023 and early 2024. First-quarter margins were roughly 3.3% in 2024 and 3.25% in 2023, compared with nearly 5.7% in the latest quarter, representing a gain of more than 200 basis points over two years.

This improvement is not simply a rebound from a weak base. Profits have nearly doubled since early 2024, while sales have risen far more modestly, underscoring a structural shift in how larger retailers are managing inventory, pricing and operating expenses. Even after accounting for seasonality, first-quarter margins improved both sequentially and year over year, signaling strengthening profitability.

Small businesses continue to contribute to job growth, supported by strong hiring activity and external boosts such as FIFA World Cup 2026™ demand in select sectors. However, Bank of America data shows payrolls per small business client declined more than 2% year-over-year (YoY) in May, suggesting that recent hiring strength may be masking underlying softness.

Despite resilient consumer spending, small business profitability continues to wane, with the inflow-to-outflow ratio declining further in May, according to Bank of America small business account data. Cost pressures, including elevated fuel expenses, are
outpacing revenue growth, particularly for firms with <$500K in annual revenue, which are experiencing the largest drag on margins.

As profitability tightens, small businesses are increasingly adjusting prices and relying on credit to manage operations. National Federation of Independent Business (NFIB) data in May shows a rise in actual and planned price increases, reflecting efforts to offset higher costs. At the same time, utilization rates suggest firms still have some borrowing capacity.

Profitability pressures persist. In addition to hesitancy in hiring, small business margins remain squeezed. Plus, uncertainty around the economic outlook has underpinned the below average small business optimism reading in the NFIB report for many months now. Profitability growth, as measured by Bank of America small business accounts’ inflow to-outflow ratio, dropped further in May. This is despite consumer discretionary spending growth remaining resilient in Bank of America aggregated credit and debit card data

Insurance costs rose 65%, increasing from about $1 million to $1.65 million.

Utilities climbed 80%, jumping from $1.4 million to $2.5 million.

Repairs and maintenance more than doubled, rising from $625,000 to $1.3 million.

Overall operating expenses increased 3.4%, from $15.9 million to $16.4 million, while effective gross income slipped 3.9%, declining from $32 million to $31.2 million.

The 861,000-square-foot office tower at 26 Broadway in New York's Financial District has been transferred to special servicing after its borrower said it could no longer make loan payments

The 3000 Post Oak building in the city's Uptown district was foreclosed on in May and is scheduled to be auctioned this month after losing its sole tenant, according to CMBS commentary.

The 19-story property's decline accelerated after engineering firm Bechtel, which occupied nearly the entire building, vacated at lease expiration in October 2024. Its departure triggered an imminent default and pushed the loan into special servicing.

The ensuing drop in value underscores the depth of the distress. The most recent appraisal pegged the property at about $25.2 million, down sharply from $143.9 million at origination in 2019 — a roughly 80% decline.

DataBank has landed access to billions of dollars meant to help it expand its multi building data center campus in Red Oak, Texas, just south of Dallas, as it diversifies its capital partners.

Closing on $1.45 billion in new financing gives the Dallas-based data center developer with 76 data centers in 26 U.S. markets and in the United Kingdom an $800 million revolving credit facility and $650 million to boost its existing construction loan at its North Texas campus. The funds give DataBank the option to purchase land or to move quickly on an expansion, President and Chief Financial Officer Kevin Ooley told CoStar News.

"We filled this up," Ooley said, referencing the initial three data centers in its Red Oak campus on 292 acres with eight planned buildings expected to add 480 megawatts. "We're seeing enterprise workloads getting bigger."

The additional funding is expected to help DataBank add its fourth data center to the campus totaling 60 megawatts of capacity, Ooley said. The expanded funding comes after the company landed its biggest loan yet to build the site's initial three buildings. "The cycle time is compressing," he added. "We're selling faster and selling larger footprints.

In total, DataBank now has $2.65 million slated for new construction of the company's Red Oak campus. The added financing includes $400 million in bank financing secured by a group of banks led by MUFG Bank Ltd. The remaining $250 million is tied to notes in private placement — representing DataBank's first private placement transaction.

Beyond the expanded construction loan, the firm's revolving credit facility gives DataBank the financial bandwidth to move quickly on a potential development site at a time when speed to market remains key, Ooley said. The credit facility, earmarked for general corporate purposes, was arranged by a syndicate of banks led by Citizens Bank and matures in 2031.

Census released the annual data on the length of time from start to completion, and this showed residual construction delays impacting completions in 2025.

In 2020 and 2021, builders responded to strong demand for both owner occupied and rental units and started a large number of housing units. However, there were significant pandemic related delays in receiving materials. For example, in 2024, I spoke with a major window supplier about delivery delays. In early 2023, they were quoting 26 weeks for delivery. In 2024 they were quoting 4 to 5 weeks (back to normal).

In 2023, it took a record 8.6 months from start to completion for single family homes, in 2025, it took 7.5 months (still elevated, but returning to normal).

For 2+ unit buildings, it took a record 17.1 months for buildings with 2 or more units in 2023, and this declined to 16.5 months in 2025 (still very elevated).

Realtor.com: With a nationwide housing shortage that continues to hover near 4 million homes, affordability pressures remain for millions of Americans. In this updated edition of our state report cards for affordability and homebuilding, we revisit every state’s performance on the metrics that matter most: how affordable homes currently are for local earners, and how actively each state is building to meet future demand. This year’s refresh reveals a familiar regional divide, but also some notable shifts beneath the surface, with a new state at the top of the class and a handful of states whose grades moved dramatically in either direction.

2026 Housing Market Rankings: Key Takeaways
The Biggest Gainers
Delaware (+12 spots to No. 7, B): The year’s most improved state. Strong building activity and high median incomes ($87,667) helped offset a high median listing price of $486,044.

Utah (+12 spots to No. 17, C+): Aggressive homebuilding (1.82 permit-to-population ratio) and a low 4.7% new-construction premium drove its rise, though affordability remains a major hurdle.

Colorado (+9 spots to No. 18, C+): Powered by healthy construction activity, though buyers still face high price-to-income strains.

Kansas (+7 spots to No. 13, B): Exceptional affordability carried the state; a median home ($292,632) requires just 27% of the median income.

The Biggest Decliners
Alabama, Maryland, & New Jersey (-8 spots): Tied for the largest drops. Alabama suffered from slowing permit activity; Maryland (No. 31) lacked enough building; New Jersey (No. 43) struggled with flat construction and a steep 71.6% new-construction premium.

Louisiana & Wisconsin (-7 spots): Louisiana (No. 19) fell due to lower median incomes and trailing permit activity, while Wisconsin (No. 23) was dragged down by a high 38% new-construction premium.

Stagnant at the Bottom
Structural Gridlock: Connecticut (No. 46), California (No. 47), Hawaii (No. 48), Massachusetts (No. 50), and Oregon (No. 45) remained unchanged due to high costs, land constraints, and restrictive zoning.

New York (No. 51, F): Dropped to dead last. Driven by severe underbuilding (0.45 permit ratio) and a massive 73.9% premium on new builds, a median home now demands 55.2% of the median income.

The Deepening Regional Divide
South & Midwest Dominate: Every single 'A' and 'B' grade belongs to these two regions, both averaging a rank of No. 16. In the South, 13 of 16 states rank in the top half; in the Midwest, 10 of 12 are in the top 30.

West & Northeast Lag: Western states averaged a rank of No. 35, while the Northeast averaged No. 43. All six 'F' grades belong to these two regions.

Building Activity & Trends
The Big 7: Just seven states account for over half (51.2%) of all U.S. building permits, led by Texas (14.6%), Florida (12.3%), and California (7.3%).

Building Intensity Leaders: Idaho leads the nation with the highest permit-to-population ratio (2.10), followed by South Carolina, North Carolina, Utah, and Florida.

A Win for Buyers: In five states—South Carolina, Idaho, California, Florida, and North Carolina—new construction is actually cheaper than existing homes, offering a rare bright spot for affordability.

Goldman Sachs Research doesn’t expect the Federal Reserve to lower rates until next year. David Mericle, chief US economist, has pushed his forecast for the final two rate cuts for this cycle to June and December 2027 (from December 2026 and March 2027 previously).

US economic activity and labor market data “have been stronger than we anticipated in recent months, with job growth in particular picking up impressively,” Mericle writes.

Mericle’s team still anticipates that GDP growth will be somewhat below potential in the second half of this year as high oil prices weigh on spending. But our economists now expect the unemployment rate to rise only a touch further this year to 4.4%, down from a previous forecast of 4.6%.

The combined effects of tariffs, higher oil prices and other effects of the war in the Middle East, and artificial intelligence (AI) demand are expected to keep year-over-year core personal consumption expenditures inflation steady at above 3% throughout 2026. But fundamental drivers of inflation look softer. “As a result, we continue to expect inflation to fall to close to 2% in 2027, barring additional supply shocks,” Mericle writes.

U.S. companies’ costs to provide goods and services increased at an annual rate of 6.5% in May, spurred largely by a spike in energy costs tied to Middle East tensions, the Labor Department reported Thursday. It was the highest annual jump in producer prices since November 2022, when costs rose 7.4%.

Also known as wholesale prices, producer prices often affect consumer prices, which rose in May at an annual rate of 4.2%, the highest in three years. The annual rate of producer inflation has now risen for four straight months.

Construction project developers and contractors have been hit especially hard by material price increases during the past four years, caused by supply chain disruptions, trade tariffs and most recently the war in Iran. Government data showed prices for diesel fuel, used in trucks and construction equipment, were up 19.9% from April and more than doubled from May 2025 with a spike of 105.9%.

The Associated General Contractors of America trade group noted May’s overall costs for nonresidential construction rose 1.8% from the prior month and soared 8.4% from a year earlier. Prices for some aluminum products increased 48.8% on an annual basis, structural steel parts rose 15.6% and truck transportation costs for materials increased 17.3%.

“Runaway prices for key construction inputs are pushing up costs twice as fast as the 4.2% rise in the consumer price index,” Ken Simonson, the contractor group’s chief economist, said in a Thursday statement. “Contractors are being hit by a double whammy of rising materials prices and much lower increases in what they can charge for new projects.”

Exports of refined fuels from other nations along the Persian Gulf have rebounded this month as more tankers manage to slip through the Strait or Hormuz. Shipments from countries including Saudi Arabia, the United Arab Emirates and Kuwait averaged more than 600,000 barrels a day so far this month, according to data from research firm Vortexa.

That’s an increase of about 50% in exports of crucial oil products such as diesel, gasoline and naphtha, compared with April and May. However, it’s still just a fraction of the roughly 4 million barrels a day of fuels those countries were shipping prior to the war.

Goldman Sachs: Oil prices are likely to stay elevated for some time in the wake of significant declines in global oil inventories, according to Ephraim Sutherland in the Wealth Management Investment Strategy Group.

To explain why, Sutherland looks at global observable oil inventories over the past few years. At the beginning of 2026, levels were at a multi-year high, driven by increased production and slower demand. This provided a buffer when the Iran conflict began and oil supply through the Strait of Hormuz was disrupted. Now, as of June, inventories have dropped significantly, with refined products like jet fuel and diesel hit particularly hard.

Blackstone Real Estate Debt Strategies has committed more than half a billion dollars to the industrial outdoor storage sector in the span of a week.

Blackstone's lending arm, known as BREDS, originated a $244 million loan for Philadelphia-based Alterra IOS and participated in a $281 million financing package for New York-based Catalyst Investment Partners. Together, the two financings are backed by 114 properties across dozens of U.S. markets.

The back-to-back deals illustrate how quickly institutional capital is moving into industrial outdoor storage, a historically fragmented asset class defined by paved or gravel yards used for truck parking, equipment storage and container staging near urban cores.

The Alterra loan alone marks BREDS' sixth IOS transaction, bringing its total lending exposure to the sector to more than $1.1 billion.

Alterra IOS, which has acquired more than 470 sites in 39 states, secured its $244 million loan against 37 properties spanning 27 markets. Those assets include 165 usable acres and 806,000 square feet of warehouse space, concentrated in major logistics corridors across Florida, Georgia, Indiana, Maryland, North Carolina and Virginia. The financing includes future funding for additional acquisitions.

The deal introduces a newer financing structure. Rather than using a traditional mortgage, Alterra and Blackstone implemented an equity pledge framework — a model Alterra's Chief Financial Officer Scott Whittle described as "a meaningful evolution in the financing of institutionally owned IOS assets on a non-recourse basis."

Catalyst Investment Partners, meanwhile, secured $281 million in separate financings from BREDS and institutional investors advised by J.P. Morgan Asset Management. The J.P. Morgan component marks its first loan secured entirely by a dedicated IOS portfolio.

The Catalyst financing is backed by 77 properties across 12 high-barrier-to-entry markets, including Northern New Jersey, Miami and Washington, D.C. Tenants range from equipment rental firms to e-commerce companies.

Alterra has raised more than $1.8 billion in institutional financing across its discretionary ventures and $1.45 billion in equity for its closed-end funds. Catalyst closed its third IOS-dedicated fund in February at $400 million and manages a portfolio on pace to reach 250 sites by 2027, with assets under management exceeding $1 billion.

Salt Lake City’s retail property sector is generally balanced as the middle of 2026 approaches. However, despite relatively tight market conditions, with an overall availability rate below 5%, rent growth has slowed.

As of the second quarter of 2026, trailing 12-month move-outs from retail space totaled just over 1.4 million square feet, about 11% below the historical average. Quarterly move-outs have remained below 400,000 square feet for three consecutive quarters and may reach a fourth based on early data for the second quarter.

Salt Lake City’s availability rate has ticked higher over the past 12 months to 4.4%, but still remains 40 basis points below the national rate of 4.8%.

Retail rents, however, have lost momentum. Year-over-year growth peaked at 7.2% in late 2022 and has since eroded. From 2022 to 2024, Salt Lake City ranked among the top-performing retail property markets nationwide for rent growth.

As of the second quarter of 2026, asking retail rents rose approximately 0.4% over the most recent 12-month period, compared to the national average of 1.9%. Salt Lake City's average market asking rent is near the all-time high of $26.20 per square foot, but weaker rent increases could be in play for the next few quarters.

Bahrain-based Ajyad Capital and SITG Capital acquired Siena on Westheimer, a 643-unit multifamily property in Houston, from Blue Roc Premier and Stonecutter Capital Management for $39 million, or $66,653 per unit.

The joint venture acquisition, structured through Ajyad's Sharia-compliant dedicated investment vehicles, marks the firm's entry into the Houston market and adds to a wave of institutional and cross-border capital flowing back into Houston multifamily, according to CoStar data.

Built in 1972 at 6263 Westheimer Road, the three-story property offers a mix of one-, two- and three-bedroom units. The complex carried a 5% vacancy rate at the time of sale, with 32 units unoccupied, per CoStar information.

The deal arrives as institutional investors have re-emerged as a major force in Houston's apartment investment market. Institutional investors represented nearly 40% of buyer activity over the past 12 months ending in April, up from 25% in 2023 to 2024, and above the 35% share typical between 2015 and 2019, according to CoStar data.

Among homeowners surveyed, the dominant reason for staying put remains simple: their current home still works for their lifestyle and needs.
However, it is clear that affordability pressures continue to shape mobility decisions. Roughly 20% of respondents cited either elevated mortgage rates or high home prices as the biggest reason they aren’t moving right now. Moreover, roughly 10% of surveyed homeowners say their mortgage rate is too low to give up.

A third of homeowners surveyed said they would be somewhat more likely (23%) or much more likely (10%) to buy a home if mortgage rates fell below 6.0%, underscoring how psychologically significant that threshold remains for many Americans.

Homeowners remain cautious on home prices over the next year, though the outright bearishness seen in late 2025 has eased somewhat.

• In Q1 2025, nearly 30% of homeowners surveyed expected local home prices to rise by at least 4% over the next 12 months. By Q3 2025, that share had collapsed to just 13%—in Q2 2026 that figure was 14%.

• In Q1 2025, just 24% of homeowners expected home prices to either stay flat or decline over the next 12 months. That figure surged to 55% in Q3 2025, then eased slightly to 44% in Q2 2026.

• Still, homeowners aren’t expecting a home price crash. Only 14% of respondents in Q2 2026 expect prices in their local market to decline by -4% or more over the next year.

  

In Q1 2025, only 41% of homeowners surveyed said they would accept a mortgage rate up to 6.0% on their next home purchase. That share climbed to 52% in Q3 2025, then eased slightly to 47% in Q2 2026.

• The broader trend still suggests that many Americans are VERY SLOWLY coming to terms with the reality that their next mortgage rate will likely be materially higher than the one attached to their current home.

• Acceptance of rates up to 5.5% also remains significantly above early-2025 levels. In Q1 2025, 54% of homeowners said they’d accept a rate up to 5.5%, compared to 63% in Q2 2026.

• At the higher end of the spectrum, tolerance for very elevated rates continues to fade. In Q2 2026, no respondents said they would accept a mortgage rate of 7.5% or higher on their next purchase, down from roughly 7% in Q1 2025.

Metro job data is in today, & 29 of the 50 largest metros have gained jobs over the last year

Fastest: Las Vegas (2%), Raleigh (2%), Fresno (1.7%), SLC (1.3%), San Jose (1.3%)

Slowest: DC (-2.9%), Portland (-2.8%), OKC (-1%), Detroit (-.9%), Milwaukee (-.9%)

Non-farm Payrolls: +172k
Unemployment Rate: 4.3% (+0%)
Prime Age (25-54) Employment-Population Ratio: 80.8% (+0.1%)
Average Hourly Earnings: +0.3%

US tech sector employment is down 43k over the last year in data released this morning—that's nearly as bad as the worst of the 2024 tech-cession, and significantly worse than either the 2008 or 2020 recessions

In total, US public-sector jobs are down 187k over the last year thanks to a 270k drop in the federal workforce & a 42k drop at state public schools & universities, offset by a 35k increase at local public schools & a 92k increase at other local governments

Liz Ann Sonders, Schwab: Tech announced most job cuts since August 2024 according to latest Challenger Gray data

In May, job leavers as % of unemployed climbed to 12.5% vs. 11.3% in prior month

Wage growth for lower- and middle-income households is recovering but still lags higher-income earners, despite some narrowing in the gap. Lower- and middle-income after-tax wage growth rose to 3.1% and 3.5% year-over-year (YoY), respectively, in May, while higher-income wage growth eased to 5.6% YoY.

WSJ: The International Energy Agency, in a joint statement with other multilateral organizations, warned last week about the economic consequences of “rapid depletion of oil inventories ahead of peak summer oil demand.”
 
And the Organization for Economic Cooperation and Development published downbeat scenarios for global growth this week if flows don’t normalize soon. It warned that, while Asia might be hardest hit, it also would “weaken growth significantly” in the U.S. and Western Europe.

Amazon has signed a lease for more than 1 million square feet of industrial space at Passport Park West 6, a new distribution building nearing completion close to Dallas Fort Worth International Airport.

Dallas-based developer Trammell Crow, a subsidiary of CBRE known for large-scale warehouse projects nationwide, owns the upcoming building at 2550 Travel St. in Dallas.

The deal stands out as one of the largest commitments in the Dallas-Fort Worth region this year and reflects continued demand for bulk distribution space near the airport. Amazon is expected to begin occupancy at the property in July, according to CoStar data.

Passport Park West 6 is part of a seven-building, master-planned industrial park. The cross-dock structure will offer 40-foot clear heights, 177 dock doors and trailer storage capacity of nearly 400 units.

Samsung Electronics America is relocating its HQ to Texas from New Jersey just eight months after moving into its new Garden State facility, reigniting criticism that the area's high corporate taxes and red tape are driving away businesses.

Samsung confirmed that it was exiting 700 Sylvan Ave. in Englewood Cliffs, New Jersey, where it leases roughly 270,000 square feet, according to CoStar data. The U.S. HQ will move to Samsung's existing campus in Plano, Texas, "building on our 30-year presence in the state," the company said in an email to CoStar News on Tuesday.

Samsung's announcement also comes as Central Texas has become its chipmaking base with an existing chip fabrication plant in Austin, Texas, which it has operated since 1996, as well as its advanced foundry in nearby Taylor. The foundry, once expected to cost $17 billion to build, is expected to open by year's end. Samsung's investment in the project has grown to $37 billion, according to media reports.

The Taylor facility is one of the largest semiconductor manufacturing projects underway in the United States. Last July, Samsung confirmed it has secured a $16.5 billion, multiyear contract with Tesla to manufacture its next-generation automotive chips at the plant.

New research led by experts at the World Resources Institute (WRI) and ECOnorthwest, with support from The Pew Charitable Trusts, shows that building homes near existing jobs, stores, and transit saves public dollars, in both up-front infrastructure and ongoing maintenance costs, and produces more revenue in property taxes per acre than local governments can expect from development at the edge of town.

New housing built near existing workplaces, retail, and transit entails lower infrastructure construction and maintenance costs because these new homes generally rely on roads and utility connections that are already in place. Housing built at the urban fringe, on the other hand, often requires new roads, sewer and water lines, and other public services.

This research used economic modeling to estimate the fiscal impact of new housing in 10 states of vastly different sizes and geography: Arizona, Florida, Maryland, Minnesota, Montana, New Hampshire, North Carolina, Pennsylvania, Texas, and Washington.

Key findings include:

• The up-front cost to government and taxpayers of building roads, water and sewer lines, and other public utilities to serve new homes near existing jobs, stores, and transit is approximately $21,000 lower per home than the infrastructure costs associated with building homes at the outer edge of cities and towns.

• The ongoing costs to government and taxpayers of maintaining roads and utilities that serve new homes are 50% lower, on average, when those homes are built near existing jobs, stores, and transit.

• Property taxes generated per acre are 13% higher, on average, when new homes are built near jobs, stores, and transit.

• On average, the payback period for infrastructure associated with new homes is 50% longer when those homes are built in outlying areas than when they are built near existing jobs, stores, and transit.

• Local government can keep property tax rates down while maintaining healthy balance sheets when more housing is built in established areas.

Bloomberg: Since 2018 the Dallas-Fort Worth metro area has attracted more corporate headquarters relocations than anywhere else in the US, according to real estate company CBRE Group Inc., with manufacturing and tech firms leading the way. The influx drew thousands of software engineers and other Indian-born workers to the federal H-1B program, which provides temporary visas for professionals with corporate sponsors. For the most recently available four-year period, ended Sept. 30, 2024, the government granted almost 32,000 new H-1B approvals in the Dallas area, topping Silicon Valley, Seattle, San Francisco and Washington, DC, and trailing only the New York City metro area.

Visa holders flocked to the new subdivisions spreading north through the suburbs of Prosper, Frisco and, most of all, Celina, where the population more than tripled in just five years. That helped make Collin and Denton the fastest-growing US counties among those with a population of at least 1 million, the most recent census data show. Collin also had the biggest percentage jump in Indian residents among large counties, climbing to an average of more than 116,000 in the five years through 2024, from 70,000 in the preceding five years.

But the momentum is quickly reversing. Indian buyers are disappearing from the market as federal and state governments tighten H-1B restrictions and many of the tech companies that employed the new arrivals fire workers in favor of artificial intelligence. Prices in the Collin County suburbs north of Dallas in February dropped almost 9% from a year earlier, compared with a decline of 4% in the metro area as a whole, according to data from brokerage Redfin.

Immigrant-heavy regions in the US — such as the suburbs of Northern Virginia; Raleigh, North Carolina; and Seattle — rely on these kinds of high-skilled temporary work visas for their high-tech workforces. South Asians have become the most important first-time buyer group for builders, says Alex Barron, an analyst at Housing Research Center LLC in El Paso, Texas. “Who is there to replace them?” he asks.

In Frisco alone, where 235,000 people live about 30 miles north of downtown Dallas, the Indian share of the population ballooned from 6% in the 2010-14 period to about 20% a decade later, second only to White residents, who are no longer in the majority, according to census data.

For almost a decade, South Asians have been the driving force behind this region’s building boom, one of the biggest in the US during the pandemic. They once accounted for 70% of sales at Schneider’s Tradition Homes. But in the past year they’ve dropped below 30%, leaving his family-owned company with a backlog of 125 luxury properties to sell.

In April, the personal savings rate hit 2.6 percent.

In last 60 years, it's only been lower than 2.6 percent twice.

(1) a very brief, very unusual period in the summer of 2022 when consumer spending was unleashed following years of cash stimulus and historically high savings

(2) in the twilight of the 2000s boom, just before the Great Recession

Federal Reserve, Christopher Waller: “Over the past several weeks, data on the labor market and inflation have validated this judgment. Recent jobs data show that the labor market appears to be stabilizing and the unemployment rate is fairly low and stable. But higher energy and commodity prices are pushing up headline inflation and prices for other goods. Inflation is not headed in the right direction. Based on this recent data, I would support removing the "easing bias" language in our policy statement to make it clear that a rate cut is no more likely in the future than a rate increase.

That doesn't mean, however, that I think we should be considering rate increases in the near future. While the labor market is on a more stable footing, it is not booming, and with monetary policy still at a restrictive setting, raising the policy rate could cause damage. The oil shock's effect on prices may dissipate soon, in which case raising rates may only begin to bite after inflation has started coming back down. But I can no longer rule out rate hikes further down the road if inflation does not abate soon, and that is especially true if measures of inflation expectations, some of which have risen lately, show signs of becoming unanchored.”

Percent of items with 3% price growth (a metric Waller popularized for inflation falling in 2023-2024) has leveled off at a higher rate, much higher than 2023-2024

Layoffs remain low. Initial claims below 2023, 2024 and 2025 levels

Continuing claims remain well below 2025 levels, and slightly below 2024 levels.

Continuing claims paint an overly rosy picture of the labor market, but the improvement has been large enough that we're also seeing it a little in the BLS data (unemployment due to permanent layoff barely rising or not at all)

After experiencing unusually weak job gains in 2025 due to heightened policy uncertainty, higher tariffs and sharply lower immigration, Texas employment has begun to pick up. Jobs in the state increased 1.7 percent in the first quarter. While this rate of growth appears promising, it has been limited to a handful of sectors, with professional and business services accounting for a sizeable share.

The recent resumption of growth in the sector bears watching. Employment services firms are often considered a leading indicator of labor market turning points because they can rapidly adjust headcounts in response to cyclical shifts. However, the outsized share could indicate that businesses prefer the flexibility of adding temporary workers over permanent staff amid heightened economic uncertainty. Nevertheless, the increased demand for temporary workers still signals an uptick in overall labor demand.

The unemployment rate in Texas has remained low and in line with the U.S. rate of 4.3 percent. Broader measures of unemployment, such as the U6 rate, which includes discouraged workers and part-time workers seeking full-time employment, declined from 8.5 percent to 7.9 percent during the first quarter, suggesting improvements in the labor market beyond the headline-unemployment rate.

However, Texas’ labor force participation rate ticked down further in March to 64.4 percent, a trend since September 2025, when the labor force participation rate was 64.9 percent.

While the labor market shows improvement, geopolitical factors are creating headwinds. The Iran war has negatively affected many Texas businesses, though impacts are distributed unevenly across sectors. Nearly half of special question respondents to the Texas Business Outlook Surveys (TBOS) in April reported a net negative impact. The burden fell more heavily on service sector firms (51 percent citing negative impacts) versus manufacturers (35 percent).

Though a smaller share of manufacturers reported negative impacts overall, those affected faced more widespread cost pressures. Across both sectors, the most cited factors were higher fuel and transportation costs, particularly among manufacturers (Chart 3). Among manufacturers reporting negative impacts, 87 percent cited elevated fuel and transportation costs as a primary drag, followed by increased uncertainty (44 percent) and higher non-fuel input costs (39 percent).

Despite Iran war-related disruption, headline indicators from the April TBOS point to economic resilience (Chart 5). On the manufacturing side, the headline production index jumped to 19.0 in April from 6.8 in March, well above the series average of 9.6. The new orders index was also positive for a fourth consecutive month and above its historical average.

Lennar—America's second largest homebuilder—is running a 19.7% sales incentives rate in its Texas/South Central division

That's $98,500 in incentives on a $500,000 sale

According to Lennar executives, they consider their "normal" baseline for incentives to be around 5.0% to 6.0%

LS Comment: there is a massive missed opp in development to differentiate. These market conditions highlight you can't just sell the same same homes that are largely undifferentiated from competition

Today's Buyers want:
-Architecture and detail
-Unique
-Design
-Personalized upgrades
-Usability/flow
-Light/windows
-Outdoor living spaces, landscaping, this is a feature point
-Walkability
-Amenities that add value to their daily life. From a development standpoint, pools are a cost to build for the developer and they are a cost to maintain for the owners. VS retail is a revenue generating opp and an amenity that enhances residents livability and lifestyle

Fed governor Chris Waller said on Friday that he agreed with several other senior policymakers who have said the central bank should shift away from its “bias” towards easing rates. Minutes from the central bank’s April meeting released this week showed that “many” officials had taken this view, including a trio of regional Fed bosses who had dissented with the inclusion of the easing bias in April’s statement.

The market is pricing in a 64% probability that rates will hike before the end of the year.

US government bond yields have surged this month. Hotter-than-expected inflation data may be the primary cause, but there are several drivers behind the move, says Phillip Lee, head of Real Money Rate Sales in Goldman Sachs Global Banking & Markets.

US bond yields have surged as sticky inflation, resilient growth, and global yield spillovers push investors to scale back expectations for Federal Reserve cuts and price in pauses and higher rates for longer. At the same time, persistent fiscal deficits, heavy Treasury supply, and rising debt sustainability concerns are driving investors to demand extra compensation to own long-term government debt.

While shorter-term rates have risen as well, the move has been particularly notable in long-term Treasuries. This week, the 30-year yield hit its highest level in 19 years.

Lee expects to see the move continue. “I think rates are going higher,” he says. In particular, he expects that longer-term yields will continue to rise, as investors continue to demand more compensation for owning longer-term bonds, due to the potential for higher inflation and higher bond issuance. Shorter-term rates, on the other hand, could be driven more by Fed policy, which Lee expects to be relatively balanced between hikes and cuts in the years ahead.

Americans have been struggling for months with high gas prices and persistent inflation, sending consumer sentiment to a record low. Now retailers like Walmart and Lowes are getting louder about their warnings that spiking fuel costs driven by the US-Israel war with Iran will soon be reflected in the prices of products on their shelves.

When that happens, it’s only going to make US affordability problems that much worse. “We are concerned that the consumers have less ability to spend” even now, said Joe Feldman, an analyst at Telsey Advisory Group. Looking ahead, “the lower-income consumer is going to become even more challenged.”

At Walmart, Chief Financial Officer John David Rainey said the company has seen some habits change: consumers bought fewer gallons per visit at Walmart pumps in the first quarter, with the average number falling below 10 for the first time since 2022. “That’s an indication of stress,” he said.

WSJ: When it was released in early May, the Michigan survey’s preliminary reading hit a fresh record low against a backdrop of rising gas prices. Those continue to climb, so it’s somewhat natural to again attribute consumers’ sour attitude to inflation.
 
In 2022, some interesting questions in Michigan’s broader survey, beyond the index, didn’t show such extreme pessimism. That included views on making real, inflation-adjusted income gains over the next five years, and on the prospect of keeping a job over that time frame. In 2022, people were more confident of not losing a job over that span than they had been in the late 1990s.
 
Some of those readings for May and April haven’t been released yet. But people’s confidence on those five-year measures has been falling alongside the headline sentiment index. The most recent data for respondents’ five-year job-loss fears, from March, was near its all-time high.
 
Likewise, the Conference Board consumer confidence index’s “vibes” weren’t close to record lows in 2022. That headline index incorporates questions about employment conditions and family income. Recent readings, though, have been below 2022 levels.
 
Another measure, from the New York Fed’s Survey of Consumer Expectations, is close to its lows for respondents’ expectation that if they lost their job, they would find another within three months.
 
It is one thing to be unhappy about inflation when you have to, say, seek out a better job, or a second job, to keep up. It is another thing to worry that you won’t even have those options.
 
“The recent decline in sentiment is more driven by weaker economic fundamentals,” says Joseph Briggs, co-head of the global economics research team at Goldman Sachs. He said that points to a likely decline in consumer spending growth in the back half of this year.

A limited-service hotel can run at lower occupancy levels and still generate meaningful gross operating profit margins, or GOP margins.

A review of a small sample of limited-service hotels across major U.S. markets shows they operate under a different profit model than full-service hotels, with lower break-even points, stronger flow-through and stronger margins.

Across this subset, break-even occupancy levels for the majority of markets generally range between the high-20% and high-40% range, materially below what is typically observed in full-service hotels. Markets such as Seattle and San Francisco require just 27% to 29% occupancy to cover operating costs, while New Orleans and San Diego fall in the low- to mid-30% range. Even in higher-cost environments like Washington, D.C., and Chicago, break-even levels top out in the mid-40% range.

With annual average occupancy levels consistently in the 70% to 80% range across the sample, most properties operate well above break-even, allowing a larger share of incremental revenue to flow through to gross operating profit. As a result, GOP margins in this sample are notably strong, with roughly half the markets exceeding 40%, including Seattle, Miami, San Diego, Phoenix, Tampa Bay, Washington, Orange County, Orlando and Chicago.

Average daily rates range from just over $100 in markets like Houston and Atlanta to the mid-$170s in San Francisco and San Diego. Despite these lower rates, margins remain strong because of leaner staffing models, reduced amenities and lower fixed-cost exposure.

Costar: "The truth is, and this is whether you're staying in a hotel or not, people don't sit down for a full breakfast anymore," said Steve Palmer, founder, managing partner and chief vision officer at The Indigo Road Hospitality Group.

Guests want a juice bar, a to-go coffee and a few sandwich options, Palmer added, explaining that breakfast — and to some extent, lunch — happens on the go, so hotels need to be able to provide that option.

"Our development philosophy right now, in all of our hotels, is [to build] a very active, robust coffee bar," he said.

If done right, Palmer said, these coffee bars can activate the hotel lobby and become a place where guests — and even locals — go to socialize.

The exception to the quick-breakfast trend, Palmer said, is resorts. Laura McKoy, chief creative officer at Omni Hotels & Resorts, agreed that resorts still need to offer a traditional breakfast dining option.

But McKoy said Omni is also investing in enhancing its coffee shops on property to provide guests an "in-between option."

At a few recently renovated resorts, McKoy said she's repositioned the coffee bar to be near the pool area. The high-traffic space makes it easier for guests to access, and the cafe can also serve ice cream to cater to afternoon crowds.

For Omni's large conference hotels, the strategy is also to find the best visibility — such as putting the cafe on the side of the hotel by the convention center entrance — but also providing more substantial food options. McKoy said Omni has started to roll out an Amazon grab-and-go station where guests can self-checkout items, which, she added, has been received well so far.

KB Home announced on Thursday that it will expand into the Atlanta market, closing its first land deal (110 homesites) and setting the stage for a growing presence in one of the country's most active homebuilding markets.

U.S. single-family homebuilding activity is heavily concentrated in high-population-growth pockets in Arizona, Texas, Florida, the Carolinas, Alabama, Tennessee, and Georgia—markets where land is available to entitle and build on, regulatory environments are more permissive, and population growth continues to generate underlying need for more housing stock.

Toll Brothers was asked on Wednesday about which housing markets they could eventually target for M&A/entry. Toll Brothers leadership suggested a growth market like Indy. “To your question about the remaining spots on the map, you know, there are parts of the Midwest where we don't have a footprint today. Indianapolis, Minneapolis are two spots that come to mind… I think we'll continue to do this type of acquisition, like you saw with Buffington and Northwest Arkansas. We've now done 16 acquisitions over the last 32 years.” Karl Mistry, CEO of Toll Brothers, said on their May 20, 2026 earnings call.

All 15 of the biggest homebuilders tracked by ResiClub are seeing year-over-year margin compression

Bigger incentives and outright price cuts in the weakest markets, coupled with stubborn land prices, are squeezing margins

The US 30-year yield briefly hit its highest level since July 2007. The selloff came as crude oil prices climbed and the US-Chinese summit failed to deliver any breakthroughs toward ending the conflict. That’s compounding worries sparked by back-to-back US government reports that revealed a sharp rise in consumer and wholesale prices, fueling speculation that the Federal Reserve and other central banks will need to shift to tightening monetary policy.

Kevin Gordon, Schwab: The 10y Treasury yield is currently seeing its largest weekly increase since April 2025

Biggest weekly increase for the 2y Treasury yield since April 2025

Homebuilders relative to the S&P 500 ... four years of relative gains taken out

NY Fed manufacturing index's prices paid component shot up to +62.6 in May

Initial claims for U.S. unemployment insurance totaled 211,00 for the week ended May 9, marking an increase of 12,000 from the previous week’s revised level, the Labor Department reported Thursday. Initial claims have fluctuated in recent weeks but have generally ranged between 200,000 and 250,000 for much of the past year.

April’s U.S. retail and food service sales increased 0.5% from the previous month and rose 4.9% from a year earlier, as consumers continued to spend more on household necessities like gasoline, according to Commerce Department data released Thursday. Based on corporate surveys and subject to revision, government data showed total sales reaching $757.1 billion.

“Retail sales continued to grow in April despite higher gas prices driven by the ongoing conflict in Iran, cautious consumer sentiment and the persistent concerns about sustained inflation,” Matthew Shay, CEO of the National Retail Federation, said in a statement from the trade group.

Applied Optoelectronics has signed multiple industrial leases in greater Houston, signaling how aggressively suppliers are scaling to meet the voracious demand for data center support systems.

The company disclosed its latest deal in a securities filing, agreeing to take 736,216 square feet with landlord Crow Holdings.

Long defined by oil, gas and petrochemicals, Houston is now adding a new role as a manufacturing and logistics center for the artificial intelligence boom. A surge of large industrial leases by AI hardware suppliers reflects how quickly the region is being pulled into the data center supply chain as operators scramble to add capacity for power‑hungry computing.

Throw in other deals Applied Optoelectronics has executed this year, and the networking component manufacturer has added roughly 1.5 million square feet to its Houston-area footprint in 2026 alone.

U.S. Department of Housing and Urban Development–insured multifamily financing is moving firmly into the mainstream in 2026, as faster execution, looser underwriting and a wave of proposed policy changes broaden the program's appeal beyond its traditional borrower base.

Through April, the agency has securitized $6.36 billion in multifamily and senior housing loans, according to CoStar data — a 51% increase from $4.21 billion during the same period last year.

Processing timelines have shortened and internal workflows have become more predictable, reducing the friction that long-sidelined institutional borrowers, according to analysis from real estate finance firm Walker & Dunlop.

"HUD is not a fallback option. It is increasingly the most strategic one," Ken Buchanan, executive vice president of Federal Housing Administration finance at Walker & Dunlop, said in a statement. The FHA operates within HUD.

That shift is already translating into large, high‑profile transactions. This week, Walker & Dunlop said it arranged $130 million in HUD financing for the redevelopment of a historic former Veterans Affairs hospital campus in Denver into a 493‑unit mixed‑use apartment complex.

Among the proposed changes, HUD plans to reduce vacancy assumptions to 5%, lift large‑loan constraints, streamline technical reviews and scale back certain environmental diligence requirements — moves that lower costs and increase proceeds, Walker & Dunlop said.

Perhaps the most consequential change is HUD's decision to support units priced at up to 120% of area median income, pushing the program squarely into the workforce and middle‑income housing segment — the fastest‑growing and most supply‑constrained portion of the rental market.

The metropolitan areas hiring the most new graduates are also the ones building apartments the fastest.

When pairing payroll data with apartment construction, a trend emerges: Many of the strongest early‑career job markets are also delivering housing at a pace that helps sustain affordability.

Posting the fastest apartment inventory growth among ADP’s top markets are Raleigh and Charlotte, North Carolina, and Nashville, Tennessee, each expanding supply by roughly 22% to 23% between 2023 and 2025.

By contrast, coastal job centers that also rank highly, including New York, San Francisco and San Jose, California, expanded apartment supply more slowly. New York completed more than 84,000 units over the past three years, but with such a large market that amounted to inventory growth of only 6%. San Francisco and San Jose posted inventory gains below 5%, reinforcing affordability pressures despite strong wages and deep labor markets.

This supply-demand imbalance has seen these three areas among the leaders in rent growth. A CoStar analysis found that U.S. apartment rents rose just 0.2% on average last month for the weakest April since 2014, but San Francisco and San Jose had the largest April rent gains of all major areas, while New York just outpaced the national average.

Multifamily rent trends across Dallas–Fort Worth remain subdued overall, though the latest daily asking rent data through April 2026 reveal a widening performance gap between urban locations like Uptown and suburban submarkets, where substantial supply-side pressure persists.

In Uptown–Park Cities, rent performance has held up relatively well compared with the broader metropolitan area. Based on data from the daily asking rent series, rents are up 4.4% since 2023, when the broader market first reported negative growth. Uptown is among the few submarkets that have consistently notched rent gains over the current cycle.

Supply is principally responsible for this divergence in rent growth performance. Since 2023, builders have grown the existing stock in Dallas-Fort Worth by 13%. In Uptown-Park Cities, that growth is just 5%, while Frisco-Little Elm has expanded by 21%.

With unemployment holding at 4.3%, according to the Bureau of Labor Statistics, the figures offer Federal Reserve policymakers space to keep interest rates unchanged for the foreseeable future. Last week, Fed Chair Jerome Powell said the job market has shown “more signs of stability.”

But as is often the case of late, positive vibes of US government data didn’t match the latest sullen read of consumer sentiment by the University of Michigan. The gauge fell in recent weeks to a record low on growing concerns about the impact of inflation on personal finances and buying conditions.

Liz Ann Sonders, Schwab: April nonfarm payrolls +115k vs. +65k est. & +185k in prior month (rev. up from +178k)

If you need a 'stock market is not the economy' visual, this is a good candidate:

Tech stocks relative to the market: all-time high.

Tech jobs relative to all jobs: all-time low.

Federal government payrolls lowest since May 1966

April prime age labor force participation rate unchanged at 83.8%

In April, job leavers as % of unemployed dropped to 11.3% vs. 12.4% in prior month

Number of unemployed on temporary layoffs (orange) up to 917k in April; permanent job losers (blue) up to 1.9m

In April, % of unemployed for more than 27 weeks at 25.3% down from 25.4% in prior month

Gasoline spending per small business client surged 23% year-over-year (YoY) in March, with higher fuel costs spilling over into freight, fertilizer, and inventory expenses. The pressure is especially pronounced in agriculture and transportation, while small
wholesalers are also grappling with inventory cost increases exceeding 60% YoY alongside ongoing tariff headwinds.

Small business payroll growth turned negative for the third straight month, signaling that owners are pulling back on headcount amid cost uncertainty. At the same time, small business payments to hiring firms have finally turned positive, with construction
and manufacturing hiring nearly 40% above the 2023 average.

At the height of the Pandemic Housing Boom, when nearly everything homebuilders were building was flying off the shelves, there were only 32,000 unsold completed new-build homes in March 2022. Once the boom fizzled out, that figure quickly began to rebound—especially in Sun Belt boomtowns—reaching a high of 134,000 unsold completed new-build homes by December 2025.

However, data published this week shows that the number of unsold completed new-build homes has, at least for now, fallen to 119,000 as of March 2026. While the count of unsold completed new-build homes is still up year-over-year (there were 113,000 unsold completed in March 2025), the decline over the past few months has been larger than seasonality alone would suggest.

“Unsold homes [for us] are down 25% from December and 35% from a year ago, with both unsold homes as a percentage of total inventory and completed unsold inventory at their lowest levels since fiscal 2023 for homes closed in the second quarter.”
“We expect starts in the third quarter to be lower than the second quarter, and we will continue to manage our inventory levels and start space based on market conditions.” Paul Romanowski, CEO of D.R. Horton, said during their April 21, 2026 earnings call

In 2015, the private credit sector was a niche alternative, with about $600 billion in assets under management (AUM). A decade later, it’s a mainstream financing channel—with over $2.5 trillion under management.

After the Covid-19 pandemic in 2020, structures called business development companies gained popularity by allowing high net worth retail investors to gain access to private credit. Now these investors are requesting withdrawals of more money than usual, sparking concerns about the sector.

“But this activity is only occurring in one of three main investor channels, retail—not insurance and institutional channels,” explains Amanda Lynam, chief credit strategist for Goldman Sachs Research. “The majority of private credit AUM sits within institutional funds, where periodic investor withdrawals aren’t an option.”

The underlying principles of the private credit asset class are expected to remain intact, Lynam adds, and she expects “that private credit will continue to play an important role in the broader financing ecosystem.”

Brandon Roth, IPA: Capital Provider Overviews

1) Insurance company deploying capital on behalf of their general account, a legacy SMA, and a newly launched $500M stretch senior separate account. 

• Markets: Nationwide, including tertiary markets

• Deal Types: Stabilized and construction-perm

• Loan Sizes: General account: $7M to $95M (SMA goes as low as $3M). New separate account: $10M to $40M.

• Asset Types: MF, student housing, industrial, retail, self-storage, MOB, hotels. Selective on office.

• Leverage: General account: 55-60% LTV. New separate account: 70-75% LTV with a 7.5% debt yield minimum.

• Pricing: General account: T+1.30% to 1.50% (CM1) and T+1.50% to 1.70% (CM2); office above T+2.00%. New separate account: ~T+2.00% (3-5 year), ~T+1.85% (7-15 year), ~T+1.55% (15+ year).

• Duration: 3 to 30 years. 

• Amortization: Full-term IO on new separate account.

• Prepayment: 0.5-1% fee on 3-year loans; no fee for 5 years and longer.

• Competitive Advantages: Tertiary market appetite and smaller loan sizes than most insurance company lenders. The new separate account is a stretch senior perm product (70-75% LTV), which is rare for an insurance balance sheet.

2) This is a new construction and bridge lender founded in mid-2024 that's backed by a large hedge fund.

• Markets: Nationwide; MSAs of 250K+ population

• Deal Types: Bridge and construction.

• Loan Sizes: $15M to $100M; sweet spot $20M to $60M.

• Asset Types: Multifamily, SFR, homebuilder, MHC, land

• Leverage: Up to 70-75% LTC for construction; up to 80% LTV for bridge. Approximately 50% LTV for land.

• Pricing: SOFR+3.25% to 4.25% for bridge; SOFR+4.50% to 5.50% for construction

• Competitive Advantages: They can offer a full-lifecycle loan commitment covering pre-development land financing, vertical construction loan, and lease-up bridge financing. Pricing would step down at TCO and the Sponsor could potentially take cash-out.

• Notes: Closed nearly $3B in their first two years.

3) This is one of the country's most active debt funds.

• Markets: Primary and secondary markets nationwide.

• Deal Types: Bridge loans and light reposition only. No construction. Future funding is available but capped at 20% of the total loan commitment.

• Loan Sizes: $20M and up.

• Asset Types: Multifamily, hotel, industrial, retail, MHC, and age-restricted. No office, no land.

• Leverage: Up to 75% LTV, with exceptions in select circumstances. Deals are typically debt yield constrained with a 7% stabilized DY floor.

• Pricing: SOFR+2.35% floor. Majority of deals price between SOFR+2.50% and SOFR+2.75%.

• Competitive Advantages: Broad asset type coverage including hotel, retail, and MHC, combined with competitive pricing.

4) This is the lending arm of a large NYC-based family office, providing both direct bridge loans and note-on-note financing to first-lien CRE lenders. Note-on-note is 65-70% of their volume.

• Markets: Nationwide. Heavy volume in Tri-state, Florida, and California. Focus on major markets and commuter markets outside major metros.

• Deal Types: Bridge, construction completion, and ground-up construction. Note-on-note financing against first-lien CRE loans. Also starting to originate senior/mezz structures for higher blended yield.

• Loan Sizes: $3M to $50M; most direct deals are $3M to $15M. Will do note-on-note advances as small as $4M.

• Asset Types: Multifamily, mixed-use, condo inventory, retail, industrial, entitled land (selectively, prime locations only), and hospitality without a large F&B component. Selective on office. No senior housing (age-restricted is fine). 

• Leverage: Up to 65% LTV on direct loans. Up to 75-80% advance rate on note-on-note.

• Pricing: SOFR + high 300s to low 400s.

• Recourse: Non-recourse

• Term: 1-3 years. 6-month minimum interest. No exit fee.

• Competitive Advantages: Will do note-on-note advances as small as $4M, which most institutional providers won't match. Quick closes - have funded in two weeks.

• Notes: $300M+ in lender finance investments closed to date across 30+ first-lien lender relationships. ​​

“This is a split-screen economy,” said Heather Long, chief economist at Navy Federal Credit Union. “AI is doing well and the middle class is squeezed.”

While consumers continue to spend, much of that is tied to spiking gas prices caused by the US-Israel war with Iran. Economists though see a risk of spending declining soon, as rising transport costs further inflame inflation. And the related disruption of fertilizer supply augurs higher grocery bills over time.

That in turn, warns Wells Fargo economist Shannon Grein, will lead to less discretionary spending. Simultaneously, job opportunities have dried up across much of the economy as more companies in the tech and financial sectors engage in mass terminations, a phenomenon increasingly driven by AI.

As the Iran war strangles natural gas supplies, countries across Asia and Africa are rationing fuel and Europe is fretting about winter. But thousands of miles away, in the heart of US shale country, gas is so plentiful that producers now have to pay buyers to take it off their hands.

Drillers in the Permian Basin have helped make the US the world’s largest oil producer. In the process, they’ve also created a glut of natural gas, which is extracted as a byproduct of crude.

There’s so much gas, in fact, that it exceeds available pipeline capacity to ship the fuel to customers or export terminals on the coast. The result: producers literally can’t give it away and prices are actually negative.

The gas bounty is so massive that it’s not only insulating the US from war-driven energy shocks, but offering it an economic edge over countries grappling with fuel shortages.

US manufacturing growth in 2026 has managed to hang on despite war-induced spikes in energy and other input costs. This according to the Institute for Supply Management, a non-governmental organization that reported the US expansion has extended into April.

The news comes despite the effective closure of the Strait of Hormuz, which has disrupted supply chains around the world, driving up the cost of oil and other materials like aluminum and helium. Higher gasoline and diesel prices have also made shipping products more expensive. Thirteen manufacturing industries reported growth in April, led by textile mills, nonmetallic mineral products and primary metals.

The national trend of slower job growth spread to a larger swath of states in February, even as annual employment gains remained positive at 0.1%.

23 states saw higher non-farm payroll employment in February 2026 than in February 2025. States in the South and the Mountain West were the fastest-growing states in terms of job growth. Population growth leaders such as the Carolinas, Arkansas and Utah continued to post above-average job growth, spurred by domestic migration. Nevada was a notable outlier, leading all states with a 2.2% annual job growth rate, well above second-ranked South Carolina and Utah, both at 0.8% and followed by North Carolina, Arkansas and California, all three at 0.7%.

27 states and the District of Columbia are losing jobs over the year. DC experienced a 5.5% annual loss, as cuts to the federal government workforce continued. That was well below neighboring Maryland, which saw the steepest decline among states, down 1.9%. Virginia, the other Washington-D.C.-neighboring state, ranked fourth from the bottom with a 0.9% job loss, just ahead of Iowa’s 1.2% decline.

The impacts of job gains and losses by industry sector varied widely across states, with the education and health services sector gaining jobs in most (the District of Columbia being the only exception).

AI isn’t just a risk to jobs—it also increases the number of jobs in some sectors, according to Goldman Sachs Research.

Our economists find that jobs are being lost in industries and occupations that face a high risk of AI substituting for workers, while employment is increasing in roles where AI is more likely to augment human labor.

Goldman Sachs Research finds that professionals such as telephone operators, insurance claims clerks, and bill collectors face the highest substitution risk. By contrast, roles such as education workers, judges, and construction managers offer the highest AI augmentation potential.

“AI augmentation that makes workers more productive can reduce the number of workers needed to produce a fixed amount of output,” explains Elsie Peng, an economist in Goldman Sachs Research. “But by lowering the cost per unit of output, it might also increase demand for what they produce enough to generate a net increase in their employment.”

The U.S. industrial vacancy rate is expected to stay in the mid‑7% range entering the second quarter of 2026 and edge higher into early 2027 before starting a gradual descent.

While leasing activity for industrial space has held up better than initially expected, the recovery path continues to lengthen as stabilizing demand struggles to fully absorb all of the new space completed since 2022.

That said, moderating new supply expected by early 2027 will probably drive a significant inflection point in vacancy and reaccelerate rent growth later next year.

While national active inventory is still up year-over-year, the pace of growth has slowed in recent months as softening has slowed. National active listings are up +4.6% on a year-over-year basis between April 30, 2025 and April 30, 2026).

But if you go back 12 months, that year-over-year national inventory growth rate was much higher (+30.6%). After a period in which leverage shifted more toward homebuyers, the supply-demand equilibrium in the nationally aggregated housing market has been more stable in recent months.

Nationally, we’re still below pre-pandemic 2019 inventory levels (-11.8% below April 2019) and some resale markets, in particular chunks of the Midwest and Northeast, still remain, relatively speaking, tight-ish.

Active inventory in April 2026 compared to pre-pandemic April 2019:

Southwest —> +23%
West —> +3%
Southeast —> -2%
Midwest —> -35%
Northeast —> -50%

Texas communities will need to spend $174 billion in the next 50 years to avert a severe water crisis, a new state analysis revealed Thursday. That’s more than double the $80 billion projected four years ago, when the Texas Water Development Board last passed a state water plan.

The three-member board presiding over the agency authorized the highly anticipated draft blueprint Thursday, the first administrative step toward adopting the water development board’s plans for the next 50 years. The plan, released every five years, encompasses the projects that 16 regional water planning groups in Texas said are the most urgent, water development board officials said.

The board’s latest estimates come as the state’s water supply faces numerous threats. Growing communities across Texas are scrambling to secure water, keep up with construction costs and cope with a yearslong drought. This week, Corpus Christi officials said the city may be just months away from declaring a water emergency. Meanwhile, other rural cities by the Coastal Bend are rapidly drilling wells to avoid a crisis. Residents in North Texas have also been bracing for groundwater shortages.

Prices on our screens might be making us complacent about a looming economic drag. The Iran conflict’s effects will get a lot uglier.
 
But the hit to global supplies of oil, gas, fertilizer, helium, aluminum and other commodities from the Strait of Hormuz blockade is the sort of thing the market, and most Wall Street professionals, are bad at processing.

“I’ve been surprised by how the (stock) market is willing to look through the fact that the strait continues to remain shut,” said Josh Martin, head of securities and equity capital markets at Pickering Energy Partners, on a company podcast.
 
Americans are concerned about pump prices but, with no physical shortages, a billion missing barrels seems as abstract as 10,000 pneumonia cases in far-off Wuhan. Even with a deal, stories will soon start to roll in about travel disruptions and factory shutdowns in Asia and then in Europe.
 
In the best case, it could take six months for markets like jet fuel and petrochemicals to normalize. Agriculture will feel the pinch for longer, and liquefied-natural gas will be crimped for years because of damaged infrastructure in major producer Qatar.
 
The damage is cumulative, though. One reason energy-futures don’t fully reflect this is that any glimmer of hope blows up bullish derivatives positions. Two of the largest per-barrel drops in crude futures ever have occurred in recent weeks.
 
A wave of pain is headed for major economies under the rosiest scenario. Even if it’s worse in Asia and Europe, it will be felt on the bottom lines of American companies that rely on their customers and their factories.

US consumer sentiment fell in April to a record low, in data that goes back to 1978, reflecting deepening worries around the economic fallout from the US-Israel war with Iran, including spiking gasoline prices, as well as inflation and affordability concerns.

The number of Americans submitting new state unemployment filings hit 214,000 last week, up a modest 6,000 from the week before. That’s according to advanced seasonally adjusted figures from the U.S. Department of Labor.

February's construction jobs rose year over year, but a bleaker monthly picture could signal slowing building patterns.

Thirty U.S. states and Washington, D.C., gained construction jobs between February 2025 and February 2026, according to the Associated General Contractors of America’s analysis of data from the Bureau of Labor Statistics. Two states saw flat annual construction jobs and 18 saw contractions, with Texas adding the most jobs at 24,000, or 2.7%, and California losing the greatest number at 10,300 positions for a 1.2% decline.

But only 22 states saw monthly construction job growth between January and February, AGC found, with 27 states and D.C. seeing employment dip. South Dakota’s construction employment was unchanged. Florida added the most jobs between January and February with 1,100 positions, or a 0.2% increase, and New Jersey reported the biggest decrease, down 3.5%, or 5,900, of its construction jobs.

“Severe winter weather in late January and February probably led to a drop in the number of states with one-month job gains,” said Ken Simonson, chief economist for the Arlington, Virginia-based trade group. “But construction is slowing in many parts of the country, apart from areas with data center, power, and large manufacturing projects, as other owners hold back on starting projects.”

US retail sales soared in March by the most in a year, suggesting consumers continued to spend on a wide array of merchandise despite a surge in gasoline prices sparked by the Iran war.

The value of overall retail purchases increased 1.7% following a revised 0.7% gain in February, according to a Commerce Department report published Tuesday. The data are not adjusted for inflation.

While the March increase was led by a record jump in spending on gas, nearly every category in the report — from furniture to electronics to general merchandise — posted increases.

The report suggests consumer spending remained solid last month even as prices at the pump rose. That strength likely reflects larger-than-usual tax refunds flowing into households’ bank accounts in recent weeks. As a result, forecasters may boost estimates for first-quarter gross domestic product, which the Bureau of Economic Analysis will publish on April 30.

Still, economists caution the boost may prove temporary as tax season winds down, fuel costs remain elevated and hiring stays subdued.

Retail rents grew at their slowest pace in the first quarter since 2014, reflecting a market gradually returning to equilibrium after several years of outsized gains.

At the national level, asking rents for retail space increased by a modest 1.9% over the past year, extending a moderating trend that began in 2023 as the pace of rent growth continued to cool. This is the first time year-over-year growth fell below 2.0% since the first quarter of 2014, when it was just 1.8% as the market was still recovering from the Great Recession.

While supply and demand fundamentals in the retail sector remain balanced, a slight uptick in vacancy, alongside moderating tenant sales growth, has reduced landlords’ ability to push rents at the aggressive pace seen immediately after the pandemic.

U.S. industrial production fell by 0.5% in March, the first contraction in the metric since November of last year, according to a recent Federal Reserve report.

While all industrial groups saw slower activity, the manufacturing sector experienced the smallest contraction of 0.1%, after robust gains in the first two months of the year.

However, within that muted backdrop, computer and electronic product manufacturing remains a clear outlier. Production activity in this segment, led by semiconductors and related electronic components, has outperformed the broader manufacturing index, supported by sustained demand tied to data centers, advanced manufacturing, artificial intelligence and automation.

Oracle’s $300 billion megadeal with OpenAI is testing the limits of Wall Street’s appetite for debt tied to America’s data-center boom. Banks including JPMorgan Chase struggled for months to spread the risk of billions of dollars in loans they made to build data centers leased to Oracle in Texas and Wisconsin. The challenges highlight a risk for the multitrillion-dollar data center boom, where limited access to capital compounds obstacles caused by a strained electric grid and a growing public backlash.

April Multifamily Update: A Ho-Hum Start to the Leasing Season. If you thought the market would tank due to weak job numbers, you were wrong. And if you expected a strong rebound, you were wrong, too.

Apartment demand has been very solid. Just not enough to put a big dent in vacancy rates elevated by the massive 2023-25 supply wave. Rents did increase in March. Just not as much as we typically see this time of year. And that’s largely because vacancy is still elevated, limiting pricing power.

As expected, supply plunged in Q1 2026, one of the lowest supplied quarters since 2018 with 75k units completing, down 53% from the peak set back in Q3 2024. That’s the first time in four year that quarterly deliveries came in below 80k units. So supply isn’t totally evaporating, but it’s dropped off significantly. And we should see similar numbers through 2026.

That drop is basically universal, extending not just to the Sun Belt but even to lower-supplied markets in the Midwest.

As Cushman & Wakefield recently reported: “Multifamily demand normalized in the first quarter, consistent with typical seasonality and a softer labor market backdrop. Net absorption totaled 65,200 units, down 34% year-over-year. Despite the slowdown, demand was broadly in line with historical first-quarter averages.”

As Radix’s Jay Denton writes, occupancy “displayed minimal growth since the beginning of the year rather than the typical seasonal increase.”

“Renters continue to favor newer, high-quality product. Class A vacancy declined roughly 80 bps over the past year as renters trade up in quality, while Class B and C vacancy increased by a similar magnitude.”

Even absent much job growth in most markets – and all the worries about the impacts of AI, the Iran conflict, low consumer confidence, etc. – we still saw very solid absorption.

Higher mortgage rates, uncertainty from the Iran war and uneven supply are forcing house hunters to sit out what should be the US’s busiest home-selling season.

While brokers have reported some increased activity in recent weeks as mortgage rates have stabilized, the tough start to the season suggests a long-awaited housing rebound is unlikely to materialize.

The few winners are at the high end, where buyers are less sensitive to inflation and affordability constraints—another sign of how the K-shaped economy is deepening even as Trump promises to make homeownership more attainable.

It’s not just the war causing turmoil. The rapid adoption of artificial intelligence has exacerbated anxieties around employment in an already shaky labor market. And surging gas prices are hitting the wallets of people looking for homes in affordable car-centric areas.

Demand is still strong in markets where wealth is concentrated and cash buyers are unfazed by higher borrowing costs. But, for people who need to both buy and sell houses, the dynamic is trickier.

Luxury homebuilder Toll Brothers—which has an average selling price of about $1.2 million—announced on Tuesday that it has signed an agreement to buy Fayetteville-based Buffington Homes of Arkansas, marking both CEO Karl Mistry’s first big move since taking the helm at Toll Brothers in March and the builder’s entry into the fast-growing Bentonville, Arkansas market.

Founded in 2010, Buffington Homes is the largest luxury homebuilder in northwest Arkansas and currently operates nine active or upcoming communities across the area, according to Toll Brothers. Buffington Homes owns or controls more than 1,500 lots in the northwest Arkansas market, giving Toll Brothers a sizable land pipeline as it expands its national footprint.

The Bentonville, Arkansas housing market is located in one of the nation’s fastest-growing population areas. Between July 2024 and July 2025, the population of Benton County, Arkansas, jumped +3.3%, compared to a +0.5% increase in the U.S. population over the same time frame.

Coming into the year, Goldman Sachs Research expected the transition from a tariff drag in 2025 to a tax-cut boost in 2026 to generate above-potential GDP growth in 2026. But our economists now expect the drag on growth from higher oil prices to roughly offset the boost to growth from the 2025 fiscal bill.

Reflecting both the impact of higher oil prices and incoming GDP tracking data for the first quarter, Goldman Sachs Research has lowered its 2026 GDP growth forecast (fourth quarter over fourth quarter) by 0.5 percentage point to 2% (or 2.3% on a full-year basis) since the war began.

Following the closure of the Strait of Hormuz, oil markets tightened sharply, sending gasoline and diesel prices higher and fueling a 0.9% monthly increase in the consumer price index (CPI) in March. That pushed the annual headline inflation rate to 3.3%, up from 2.4% in February and rising at the fastest pace in two years.

Gasoline prices rose 21.2% in March, lifting the national average for regular gas above $4 per gallon, while fuel oil climbed 30.7%, pushing diesel costs to more than $5.60 per gallon.

Natural gas prices moved in the opposite direction, falling 0.9% after giving back some of the gains tied to February’s colder-than-usual weather. Overall, energy prices rose 10.9% in March, bringing the annual gain to 12.5%.

The costs of transportation services rose 4.1% from a year earlier in March, faster than the prior month’s increase. Higher costs in this sector could boost the prices of food, clothing and other goods in the coming months.

Mortgage Rates Today, April 17, 2026: 30-Year Rates Hit 4-Week Low

An actual 30 year mortgage quote on Friday, April 17, 2026 in San Diego County for a top credit borrower with 20% down on a single family property, at no points

Seattle-area logistics facility vacancy rates have risen to 11.3%, up from a cyclical low of 4% in December 2022 and 9.1% a year ago.

• Developers completed a wave of large-format logistics space following pandemic-era supply‑chain disruptions, with completions remaining elevated through 2025. Many of those buildings were completed without signed tenants and entered the market as tenant expansion slowed.

• More than one-third of the 29 million square feet added to the Puget Sound logistics inventory since the start of the decade remains available, including nearly all the 6.1 million square feet added over the past year.

• Some occupiers also began giving back space, even in relatively modern facilities. Sublet listings now account for 13% of available space across the market. That figure holds true even in spaces built since 2020.

• While the overall vacancy rate for properties built before the 2020s remains in single digits at 8.6%, speculative construction and space givebacks have pushed the vacancy rate for properties built in the 2020s to above 25%.

• Buildings measuring 500,000 square feet or more made up 2.2 million square feet of completed logistics space over the past year, all of which remained available for lease at the start of the second quarter.

• Roughly 2.4 million square feet of logistics space remains under construction, with nearly all of it in large-box spaces that are still on the market.

Office attendance in 10 tracked regions averaged 52.2% of the pre-pandemic level for the week ended April 8, according to Kastle Systems.

The security technology firm uses anonymous keycard data from about 2,600 office properties owned by its clients, housing around 41,000 businesses nationwide. The 10-city average has generally remained above 50% for much of the past year, as companies increasingly require in-office work.

The latest figures showed Austin, Texas, remaining well ahead of most other regions at 73.9%, with Dallas at 61.9% and Houston at 56.8%. They were followed by Chicago at 53.7%, New York at 51.6% and Washington, D.C., at 49.9%.

7-Eleven is planning to close hundreds of stores in North America as it doubles down on its goal of selling more food and drinks and delays the planned initial public offering of its North American division.

The world's largest convenience store chain will close 645 stores in the United States, Canada and Mexico during the 12 months that began March 1, according to a financial report issued by Seven & i Holdings, the Japan-based parent company of 7-Eleven. The company did not identify the stores set to close.

Demand for short‑term rentals, or STRs, now capture about 18% of hotel demand nationwide, though their presence across major U.S. markets varies widely based on local conditions.

Among the top 25 hotel markets, STR listings range from less than 10% of hotel inventory in cities such as Minneapolis, Las Vegas, Chicago and New York, to more than 30% in Phoenix, Miami and Orlando. Sun Belt and leisure-oriented markets generally exhibit the highest levels of alternative accommodation penetration, with STR listings exceeding one-quarter of hotel inventory in Phoenix, Miami, Orlando and Oahu, while San Diego and Los Angeles approach that threshold. In contrast, some gateway urban markets, including Washington, Boston and San Francisco, show STR shares closer to or below the mid-teens.

The composition of STR demand further shapes competitive dynamics. One‑bedroom, one‑bathroom units, the STR segment most directly overlapping transient hotel demand, show significantly lower penetration than total listings in most markets. Even in Phoenix, where STR supply is deepest, one‑bedroom, one‑bathroom demand equates to roughly 19% of hotel inventory. In Los Angeles, San Diego and Miami, comparable demand ranges from the low to high teens to the low-20 percent range, while many large urban area fall well below the national average.

More than 67,000 units have been completed in Houston since 2023, roughly 18,000 units are still vacant. The average vacancy hovers near 20% for apartments built in 2024 and almost 60% for those built in 2025."

Austin leads all major Texas metros- share of properties offering concessions, at 74% as of March 2026. The high use of concessions has persisted despite two consecutive years of historic demand in 2024 and 2025, largely driven by extraordinary supply growth that has resulted in a 13.4% vacancy rate, among the highest in the U.S.

Generally, complexes in Uptown are advertising four to six weeks of free rent, including The Christopher. On the other end of the spectrum, that can be extended to 10 to 12 weeks free in outlying towns in Collin County, such as Ascend at Celina Hills, which is offering 10 weeks free and a $500 gift card.

LS Commentary: there is an undersupply of 3+ bedrooms for families, multigenerational living, storage needs, WFH offices, exercise rooms, guest rooms, roommates. Why compete on price in a sea of 1 & 2 bedrooms with higher vacancy, longer lease up, higher turnover and turnover costs, higher incentives?

At the regional level: Year-over-year changes in median list prices by region ranged from -3.6% in the Northeast to -0.1% in the Midwest. When adjusting for changing home sizes, price per square foot, prices rose more robustly in the Midwest (+1.4) and Northeast (+0.4%) compared to the South (-3.5%) and West (-1.4%).

At the metro level: Median list price per square foot is falling in 31 of the top 50 metros. The largest per-square-foot price declines were in Austin (-7.1%), Memphis (-6.3%), and San Antonio (-4.6%). The largest gains were in Providence (+9.8%), Indianapolis (+6.3%), and Milwaukee (+5%).

At the regional level: Inventory increased across the board, with larger gains in the Midwest (+13.6% YoY) and West (+10.6%) than in the Northeast (+7.9%) and South (+5.8%).

At the metro level: 44 of the 50 largest markets recorded year-over-year inventory growth (active listings were down in Orlando, Chicago, Hartford, San Francisco, Miami, and Jacksonville). The sharpest increases were seen in Seattle (+42.5%), Louisville (+34%), and Indianapolis (+27.0%).

This marks the 24th straight month of homes taking longer to sell on a year-over-year basis. The median home has spent 5 fewer days on market than the pre-pandemic norm

Regional and metro levels: Time on the market was up modestly across the major regions (Northeast, +4 days; Midwest, +2; South, +4; Wes,t +2) and grew in 43 of the top 50 metros (up from 35 last month).

Federal Reserve: The authors estimate that the tariffs implemented through November of 2025 can explain the entirety of excess inflation in the core goods category and contributed to a 0.8 percent boost in core PCE prices through February 2026.

Liz Ann Sonders, Schwab: February personal income -0.1% month/month vs. +0.3% est…personal spending +0.5% vs. +0.6% est.

The University of Michigan has been conducting a consumer confidence survey for 74 years (starting in 1952). The lowest reading in this history is the number out Friday for April 2026 at 47.6.

WSJ: Most office sales reflect the sector’s steep decline. Even higher-quality properties on average have dropped about 35% in value from their peak, according to analytics firm Green Street. Buyers, meanwhile, are picking up office towers in major U.S. cities for roughly the price of a three-bedroom condo unit in Manhattan. Investors purchased 204 distressed office buildings nationwide last year, up from 133 sales in 2024, according to data firm MSCI.

Calabria in Chicago plans to convert the office building into an urban farm and education center. He is working with Farmzero, which will use grow lights and hydroponic farming techniques to produce millions of pounds a year of berries, tomatoes, lettuce, herbs and other vegetables.

“The buy-in at this distressed price allows us the opportunity to afford change,” Calabria said.

At the start of the year, more than 90,000 apartments nationwide were in the process of conversion nationwide, up 28% from a year earlier, according to data firm RentCafe. New York City’s obsolete buildings are leading the way, but tax breaks and other government incentives are helping spark similar projects in Chicago and Washington, D.C.

Multifamily completions in Q1'26 came in at one of the lowest levels in 7+ years

Austin is still permitting at pre-2019 levels, despite low & falling metro rents while SF rents are double Austin's

Apartment rents increased in March (the start of the leasing season), but more muted than normal.

Demand remained solid despite the economic headwinds, but still playing catch up to the supply overhang from 2023-25 (biggest supply wave since 1970s).

There are 21 U.S. markets where Class C rents are falling at least 4% YoY. Of those, all but one have supply expansion rates ABOVE the U.S. average.

There's no demand issue in any of these 12 markets. They're all among the absorption leaders nationally -- places like Austin, Phoenix, Salt Lake City, Raleigh/Durham, Atlanta, Tampa, Dallas, Charlotte, Orlando, etc. But they all have a lot of new supply.

Where are Class C rents growing most? In markets with little new supply. Class C rent growth topped 4% in 22 of the nation's 150 largest metro areas, and nearly all of them have limited new apartment supply.

Liz Ann Sonders, Schwab: March nonfarm payrolls +178k vs. +65k est. & -133k in prior month (rev. down from -92k)…best month since December 2024

March labor force participation rate lower at 61.9% (blue line); rate for men lower at 67.0% (orange line); rate for women lower at 57.1% (purple line)

WSJ: INCOMES: A drop in the average workweek in March led to very little growth in the index of aggregate weekly payrolls for private-sector workers (which combines hiring, wages, and hours). The 12-month change ticked down to 3.9%

Nick Timiraos, WSJ: A new paper from Fed board economists concludes that "breakeven" job growth is near zero, which means negative job growth would be almost as likely as positive job growth in any given month even if the economy is at equilibrium.

The so-what-statement:

"It would not be unusual for there to be one or more months in 2026 with declines in total payroll employment as large as -100,000 jobs, even if economic output was growing at the rate of potential output growth."

The paper suggests labor force growth is running at less than 10,000 per month: "Such a slowdown in potential labor force growth is unprecedented in recent history and would have significant implications for the U.S. economy."

After another week of fighting and confused messaging from the White House, oil markets became more decisive: The most important price for real-world oil barrels surged above $140.

Interest rates in developed markets have jumped amid fears of rising inflation since the start of the war in Iran. But while markets may be right to expect tighter monetary policy initially, history suggests that supply-driven oil price shocks lower policy rates beyond the short term.

The impact of a shock to oil supply on rates has historically been ambiguous, according to Dominic Wilson, a senior advisor in the Global Markets Research Group. Rising oil prices drive up inflation, but they also tend to weigh on economic growth, which complicates the job of central banks.

“The average historical experience shows slightly higher policy rates in the first one-to-three months after an oil supply shock and lower policy rates six-to-nine months out as growth worries weigh more heavily,” Wilson says.

Houston grew its metropolitan population by 126,720 people on a net basis between 2024 and 2025, according to recently released estimates from the U.S. Census Bureau.

This is the largest absolute increase in the nation, slightly more than the Dallas-Fort Worth area's 123,557-person gain, which was number two.

Still, the most recent population gain represents a 1.6% year‑over‑year increase, down from 2.5% between 2023 and 2024. By comparison, the U.S. population grew 0.5% over the same period.

Houston added 63,541 fewer residents in 2025 than in 2024, reflecting a sharp slowdown in population growth.

Pace of international in-migration was roughly cut in half across the 4 largest Texas metros

Fewer than 1,000 units broke ground between July 2025 and December 2025, marking the lowest level of suburban construction starts in Austin in 14 years. Suburban construction starts reflect activity across the 15 Austin submarkets outside the urban core, including Northwest Austin, Round Rock, Pflugerville and Georgetown, among others.

Elevated development activity that accelerated in recent years pushed the collective vacancy rate in these areas to 14.5%, above the metropolitan area average of 13.5%, and has translated into weak asking rent growth, currently standing at negative 5.4% year over year.

Vacancy pressures are more acute among recently completed properties that are still in lease-up. Properties completed in 2024 and 2025 across suburban submarkets currently have a vacancy rate of 32%, equivalent to 10,400 vacant units. The pullback in new starts has reduced the suburban construction pipeline to fewer than 8,900 units. That total represents a significant decline from the 15,400 units that were underway one year earlier and remains well below the recent peak of 30,800 units reached in the third quarter of 2023.

Lennar—America’s second-largest homebuilder—had to spend $62,700 on incentives per average home sale last year. Back in 2022, that figure was $17,300.
Among big builders, Lennar has been the most aggressive on the incentives front.

Inflation and bond markets have been pricing in the short-term effects of higher energy prices, but not a medium-term AI disinflation scenario. If investors begin assigning greater weight to this probability, it could provide a counterbalance to the short-term concerns and push short-term bond yields and inflation swaps lower.

Both Consumer (CPI) and Producer (PPI) prices in the US have risen at a rate of more than double the Fed’s 2% target over the past five years.

Input prices for services rose to the highest since May 2025, while those for manufacturers jumped to a seven-month high.

• Gen Z and Millennials have seen an improvement in their spending growth over the last year: in Bank of America credit and debit card data, younger generations' spending growth was higher than older generations as of February 2026.
• What's driving this? In our view, easing rent pressures are a key factor. Younger consumers are seeing rent payment growth below their wage growth according to our data. As a result their spending on discretionary items such as electronics, clothing
and restaurants has improved. Tax refunds are an additional tailwind.
• But the current oil shock poses risks to this picture. Younger generations' gasoline spending is relatively high compared to their discretionary spending, so there is the potential they will need to pullback most aggressively in the face of higher gasoline prices. Further out, while the overall labor market may be "low-hire, low-fire", it poses particular challenges for Gen Z, with potential knock-on headwinds to their spending.

AI has been moving faster in early 2026 than many expected, with leading labs reporting big jumps in annual recurring revenues. As adoption by consumers and companies widens, demand for computing power keeps growing too. Against this backdrop, the largest technology firms will spend an estimated $2.5 trillion on AI buildout in the next three years, our analysts estimate.

As of the end of 2025, total available office space across the Nashville market stood at 15.2 million square feet, with approximately 14.6% of that inventory being marketed as sublease space.

In comparison, in the first quarter of 2023, total available space peaked at roughly 16.7 million square feet, with sublease offerings accounting for 17.3% of availability. The decline in sublease availability marks a notable shift from recent years, reflecting fewer large tenants shedding excess space.

Major corporations such as Oracle and Amazon are driving office demand in Nashville, and the arrival of Starbucks, which is reportedly seeking 250,000 square feet of available office space, will further augment demand.

With over 3 million square feet of new office space constructed just in the past two years, the downtown area remains the epicenter of office leasing, accounting for over 4.2 million square feet of available office space. Of that total, only a 6.1% share is available via sublease.

Some of the largest blocks of sublease office space are in the Cool Springs area. It currently has over 2.9 million square feet of available space, 22.1% of which is available for sublease. The area is home to several large sublease listings, including 365,000 square feet in the Carothers Building and 155,000 square feet in the Highwood Office Park.

The Nashville office availability sublease share remains above the national average of 10.9%, underscoring the need for more leasing to improve fundamentals.

After rising for three-and-a-half years, Austin’s vacancy rate finally began to decline in early 2025, eventually falling below that of Memphis by the summer. Vacancies in San Antonio, on the other hand, kept rising, eventually surpassing Memphis and all other major multifamily markets in the United States this year.

Central Texas is not alone with its stubbornly high vacancy rate. Fellow Texas markets Houston and Dallas-Fort Worth are not far behind, currently with vacancies of 12.7% and 12.4%.

While Texas has been particularly affected, this supply-heavy dynamic has been a common feature of Sun Belt markets for quite some time now. Among the 10 most vacant major multifamily markets in the United States right now, nine are in the Sun Belt.

States such as Arizona, Florida, Oklahoma and North Carolina, as well as Texas, attracted a significant amount of multifamily construction during the immediate post-pandemic years as developers, lenders and investors sought to cater to a surge in population growth in the region.

In Denver, apartment concessions are high and landlords are competing for renters. But one out-of-state developer is honing its focus on the region's long-term growth as it kicks off the latest addition to its regional multifamily portfolio.

Carmel Partners, a San Francisco-based investment firm, broke ground on an apartment complex in the city's RiNo district that is set to transform a former industrial site into 480 units of luxury housing. Plans call for a seven- to 14-story building along a full city block at Blake and 34th streets, further extending what has been one of the most active construction pipelines in the country.

The firm acquired the Blake Street site nearly half a decade ago, according to property records, a portfolio deal that stitched together four warehouse parcels totaling about 2.3 acres.

The Pew Charitable Trusts collaborated with Gensler, a global architecture, design, and planning firm, to explore the feasibility of transforming vacant office buildings into co-living microapartments in 10 U.S. cities: Denver; Minneapolis; Seattle; Los Angeles; Houston; Chicago; Washington, D.C.; Albuquerque and Santa Fe, New Mexico; and Phoenix. This emerging model takes its cues from single-room occupancy (SRO) dwellings that once provided flexible, extremely low-cost housing before they were largely zoned out of existence. Research estimates that more than 1 million SRO apartments were destroyed or converted to other uses from 1970 to 1980 alone. Their demise was a major factor in driving up homelessness.

The Gensler design is to locate fully furnished rooms on a building’s perimeter, with windows. It also envisions shared kitchens, bathrooms, and laundry near the building’s core, where an office building’s plumbing already exists.

In the 10 cities studied by the Pew/Gensler team, approximately half of all renter households are considered to be cost-burdened, spending more than 30% of their incomes on rent. In 2024, the Department of Housing and Urban Development reported a record 771,000 people experiencing homelessness in the U.S., an 18% increase from the prior year.

There’s also a mismatch between the housing that is available and what renters need: There is not enough housing near jobs and amenities that is affordable for most workers. Many renters earn less than half the area median income and struggle to find housing in job-rich downtowns where median rents often exceed $2,000 per month. In addition, 40% of renter households nationwide consist of just one person; that figure was closer to 50% in many of the cities studied and reached 56% and 58% in Washington, D.C., and Seattle.

Working with Turner Construction Company, Gensler found that small co-living apartments could be developed for $123,300 to $238,700 each, including acquisition, design, construction, furnishing, and, where needed, seismic retrofitting. In all but one city—Houston—costs ranged from one-third to half the price of developing new traditional studio apartments, which often run $400,000 each in large, high-cost cities.

Financial projections suggest that upfront subsidies ranging from $25,000 to $120,000 per microapartment would be needed to attract private developers. But once the conversion is completed, no ongoing operating subsidies would be required. By contrast, each similarly affordable new studio apartment requires subsidies of $200,000 to $300,000 or more in many cities.

This relatively low subsidy means that every dollar of public investment would produce far more housing with the co-living model than a traditional apartment project. In Phoenix, for example, a $25 million subsidy would produce 294 co-living apartments, compared with only 116 studio apartments—roughly 2.5 times as many homes for the same public investment. In Seattle, the “multiplier” would be 4.2; in Chicago, 3.6.

Across the 10 cities studied, co-living conversions would deliver an average of 3.9 times more affordable homes per dollar of subsidy compared with studio apartments.