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.

The 3m annualized change in core PPI rose sharply in February to +7.6%

Short-term interest rates around the world have jumped since the start of the war in Iran. The increase is a sign that investors expect central banks to be especially sensitive to inflation, given the recent memory of supply disruptions and the surge in inflation following the Covid pandemic, according to Goldman Sachs Research.

The gap between Brent crude and WTI is the widest since 2013, when taking out a couple days of wild price moves in April 2020. Brent is almost $20 more expensive than WTI as the Iran war disproportionately hits European oil supplies.

Matthew Klein, The Overshoot: Perhaps the most striking thing about Powell’s Wednesday press conference was the repeated—and wrong—insistence that excessive inflation was mostly about rising goods prices, which in turn were mostly about tariffs:

Inflation has eased significantly from its highs in mid-2022 but remains somewhat elevated relative to our 2 percent longer-run goal…These elevated readings largely reflect inflation in the goods sector, which has been boosted by the effects of tariffs.

To be fair, goods inflation was getting worse before the Iran conflict, and in some significant categories was worse than in the 2021H2-2022H1 price spike. In the years immediately preceding the pandemic, consumer goods prices regularly fell about 0.5%-1% each year. In 2024, those prices were flat. As of the eve of the war with Iran, consumer goods prices were rising by about 2% a year—and the pace was accelerating.

The picture looks worse when focusing on goods purchased by businesses, either as inputs or capital equipment.

Prices of “components for manufacturing” rose by 0.9% in January and by 1.1% in February on a seasonally-adjusted basis. The February increase was larger than in every month of the post-pandemic inflation except for January 2022. Capital equipment prices are rising about 5% annualized, up from about 3% in 2023-2024 and about 1% in the years before the pandemic. Prices of “supplies to manufacturing industries” have been accelerating rapidly, with the one-month increase in February the largest since April 2021.

Tariffs are not the only explanation for this. One of the biggest categories within “supplies to manufacturing industries” is “printed circuit assemblies, loaded boards, modules and consumer external modems”, which have mostly been excluded from tariffs because of their importance to the datacenter buildout. Those prices rose by 48% (!!) between January and February. Even if that were a typo, prices rose by 26% between January 2025 and January 2026, which is unprecedented in the history of the data going back to the early 1980s.

Office building owners are increasingly turning to move-in-ready suites to compete in a transformed leasing market.

The strategy of providing pre-configured space, which allows smaller occupiers to access desirable locations more quickly, appears to be paying off in increased deal flow and shorter lease timelines.

Smaller leases have become a standout feature of the office leasing landscape in recent years, with today's typical deal size approximately 15% below the pre-2020 average. However, the overall number of lease transactions has remained high since 2022, indicating an active market for smaller spaces.

In response to this shift, office building owners have been investing in small “spec suites,” finishing out interior construction before securing lease commitments from tenants. The goal for landlords is to gain occupancy quickly by marketing these turnkey spaces to smaller tenants. These tenants, in turn, gain speed to occupancy in desirable locations.

New home sales down sharply in January- 587,000

11.3 percent below January 2025 -662,000 sales

17.6 percent below December 2025 -712,000 sales

The inventory of completed homes for sale at 126k is 4x the record low of 31k in February 2022. Most since July 2009

The Federal Reserve released the Financial Accounts of the United States - Z.1 (sometimes called the Flow of Funds report) for Q4 yesterday. We can use that data to calculated how much equity homeowners withdrew from their homes last quarter.

Mortgage Equity Withdrawal is an aggregate number and is a combination of homeowners extracting equity - hence the name "MEW" - and normal principal payments and debt cancellation (modifications, short sales, and foreclosures).

Here is the quarterly increase in mortgage debt from the Federal Reserve’s Financial Accounts of the United States - Z.1. In the mid ‘00s, there was a large increase in mortgage debt associated with the housing bubble.

In Q4 2025, mortgage debt increased $99 billion, unchanged from $117 billion in Q3. Note the almost 7 years of declining mortgage debt as distressed sales (foreclosures and short sales) wiped out a significant amount of debt.

However, some of this debt is being used to increase the housing stock (purchase new homes), so this isn’t all Mortgage Equity Withdrawal (MEW).

Today, Trumark Homes—which has been majority owned by Japan-based Daiwa House since 2020—announced that it has struck a deal to acquire a Seattle metro-based homebuilder JK Monarch.

The deal is the latest in a recent string of U.S. homebuilder acquisitions by Japanese firms. Exactly five weeks ago today (February 13), Japan-based Sumitomo Forestry announced that it had agreed to acquire Tri Pointe Homes—a giant public homebuilder ranked No. 715 on the Fortune 1000—for $4.5 billion. Then on February 23, Stanley Martin Homes—which has been owned by Japan-based Daiwa House since 2017—announced that it has agreed to buy United Homes Group, which has a strong presence in the Carolinas, for $221 million. On March 10, Japan-based Iida Group Holdings announced that its subsidiary, Hajime Construction, will acquire a majority equity interest in Utah-based homebuilder Wright Homes.

Prices at the pump now at 22-month high

The Office of Financial Research, an independent agency housed at the US Treasury Department, said in a report Thursday that private credit fund borrowing could be as high as $345 billion — though it urges interpreting the figure “with caution.”
“Our analysis of fund-level data indicates that reported borrowings by some private credit funds may underestimate leverage,” said the paper, authored by Ted Berg and Jung Hoon Lee.

Banks are already under pressure. The concern is likely to intensify in coming months, especially as investors ask how much banks stand to lose if a lot of private loans drop in value.

The US, Japan and the European Union are said to plan an announcement in the coming weeks about laying the foundation for a trade agreement in critical minerals. The Office of the US Trade Representative, which has led negotiations with Brussels and Tokyo on the framework, will also head talks for a trade deal that is set to include a price floor and tariffs for the materials to counter any market distortions by China.

Global efforts to diversify critical minerals supply chains intensified after Beijing last year imposed sweeping export controls, including on rare earths and critical minerals, in response to Trump’s global trade war. Beijing has threatened it would retaliate against the formation of a bloc that would target its exports.

For the first year on record, service-based retailers leased more space than traditional goods-based tenants.

And while the margin was narrow, 50.4% services to 49.6% goods, the crossover is meaningful as it reflects the long-running reallocation of consumer spending and the continued evolution of physical retail space toward uses that are less vulnerable to e-commerce.

The Argument: Nearly 75% of all restaurant meals are consumed off-premises. Takeout and drive-thru play a large part, but in recent years, the explosion of meal delivery through platforms like DoorDash has fundamentally reshaped consumption patterns.

What about delivery spending as a share of household income? After all, spending $100 on delivery is much more of a splurge for a college student than for a professional in their 30s.

The availability of grocery stores was not a driving factor in whether someone used food delivery services; in fact, there was an inverse relationship between the two.

The people who order the most DoorDash aren’t the very young; they’re people in their early 30s to early 40s.4 More specifically, they’re people in their 30s and 40s who don’t make very much money.

Look at annualized delivery transactions, broken out by income bracket and generation. The biggest DoorDash customers are people in their early 30s who make $50,000 or less.

Liz Ann Sonders, Schwab: Divergence of late between stronger housing starts (blue) and weaker building permits (orange) … latter remains in a downtrend over past couple years

Bill McBride, Calculated Risk: Yesterday current-coupon MBS (CCMBS) yields jumped to their highest level since early September of last year, and CCMBS/Treasury spreads increased to their widest levels since the middle of last December. Surging oil prices and uncertainty about the duration and the ramifications of the Iran war – inflation, growth, fiscal, etc. – not only put upward pressure on overall interest rates, but also led to significant increases in actual and implied interest rate volatility. Higher interest rate volatility, of course, generally causes CCMBS yields to rise relative to Treasury yields because of the embedded prepayment option in the mortgages backing MBS. This heightened uncertainty also led to increased implied volatility in other markets, including the stock market.

Lennar—America's second largest homebuilder—gross margins fall to the lowest levels since 2009

Among giant public homebuilders, Lennar has been the most aggressive in using affordability adjustments/incentives to maintain volumes/take market share

Here’s the annual U.S. household income needed to purchase the typical valued U.S. home

While the income needed to buy the median-priced U.S. home is +78.8% higher than it was in January 2020, it’s down -5.9% year-over-year. Methodology: This Zillow calculation is conservative and assumes a 20% down payment and the homebuyer spends less than 30.0% of their monthly income on the total monthly payment. This is a financed purchase, of course. For typical home value, Zillow economists used the latest Zillow Home Value Index reading.

• Jan. 2020 -> $52,041

• Jan. 2021 -> $52,087

• Jan. 2022 -> $63,111

• Jan. 2023 -> $87,092

• Jan. 2024 -> $93,227

• Jan. 2025 -> $98,900

• Jan. 2026 -> $93,061

  

Trump’s war on Iran has traders staring down an energy crisis. While a limited surge in oil prices signals that traders are betting on a short conflict, a lengthy disruption threatens to cause chaos across markets.

By the fifth day of the US-Israeli war with Iran, shipping has effectively stopped in the crucial channel. And less than a day after President Donald Trump spoke of escorting and insuring shipping through the Strait, a container vessel there was attacked and disabled. It now floats abandoned in the waterway.

“History suggests that oil price spikes driven by geopolitical shocks can be short-lived if markets gain confidence that supply disruptions will be temporary,” they write in a report.

Goldman Sachs Rindels and Mei estimate that each $10 per barrel increase in oil prices would reduce US economic growth this year by about 0.1 percentage point (on a fourth-quarter over fourth-quarter basis) if prices stabilize at a higher level. Higher oil prices weigh on households’ disposable income, which in turn limits their spending.

Goldman Sachs Research finds that a sustained 10% increase in oil prices boosts US headline Consumer Price Index (CPI) inflation by 28 basis points. If oil prices increase by $10 and remain elevated for three months, Rindels and Mei write, US year-over-year headline CPI inflation would likely rise from 2.4% in January to 3% in May.

The US economic picture got darker on Friday. Unemployment rose back to 4.4% after grim February numbers and downward revisions painted a less-than-pleasant picture of America’s labor market. Nonfarm payrolls fell 92,000 last month, one of the largest declines since the pandemic, after a strong start to the year, according to the Trump administration. While some of the downside was expected in advance, a wide array of industries cut jobs in the month.

The figures call into question whether the labor market is actually steadying—as Wall Street economists and Federal Reserve officials had hoped—after the worst year for hiring outside of a recession in decades.

“The idea the labor market has turned a corner implodes with this report,” said Samuel Tombs, chief US economist at Pantheon Macroeconomics.

Private sector overall: -86,000
Hospitality -27,000
Healthcare -28,000
Manufacturing -12,000
Tranport/warehouse -11,000
Construction -11,000
Information -11,000
Federal gov't -10,000
Professional/biz -5,000
Mining -2,000
Social assistance +9,000
Finance +10,000

Treasuries are heading for their biggest weekly loss since April 2025 as surging oil prices fuel inflation concerns, overshadowing a surprisingly weak US jobs report that might otherwise bolster the case for Federal Reserve interest-rate cuts.

Women drove much of the labor force expansion in 2025, as hiring persisted in female-dominated sectors like private education and healthcare. This places women at the center of current labor market strength.

For both men and women, the rate of after-tax pay increases – whether tied to staying in a job or switching roles – has moderated meaningfully compared to last year

Women prioritize stretching their dollars

From a macroeconomic perspective, rising water risks can restrain industrial output and thus economic growth in some countries, especially as water demand increases and non-renewable supplies are depleted. Adaptation can be costly and difficult for countries without the budgetary resources to easily afford desalination projects. Companies operating in these countries or industrial regions can face increased costs to secure water as well.

Nationally, multifamily completions are projected to decline roughly 36% this year to about 333,000 units, a decisive shift away from the pandemic‑era construction surge.

"It's clear now that we expanded too quickly, and these closures are a direct correction," Potter said.

In the first quarter of fiscal 2026, the grocery chain said it conducted a strategic, financial and operational analysis of its fleet. On Monday, Grocery Outlet's board approved an optimization plan that calls for closing 36 financially underperforming stores.

The stores that will be closed didn't have "a viable path to sustain profitability," Potter said on the earnings call.

About 30% of them, 24 stores, are in the eastern region, with the 51 remaining there being profitable, according to the CEO. Grocery Outlet doesn't plan to abandon that area, Potter said.

The closing list contains locations in California, Idaho, Maryland, New Jersey, Ohio and Pennsylvania. They are already being marketed by Boston-based Gordon Brothers. The optimization plan is expected to be completed during fiscal 2026.

After taking a big macro hit during the 2022 rate-shock, United Wholesale Mortgage’s refinance volume has found its footing—and keeps climbing:

387% increase in UWM’s refi volume since its 2023 cycle low.

The number of actively listed homes rose 7.9% compared to February 2025, marking the 28th consecutive month of year-on-year inventory gains. On a monthly basis, inventory ticked up 0.2% since January (a typical seasonal pattern). Although listings are up again year on year, the pace of that growth has slowed in each of the past nine months (down from 31.9% YoY growth in May). As a result, the national inventory recovery continues to stall out. Specifically, nationwide February inventory is 16.8% below typical 2017–19 levels, about the same as last month.

Four metros now have over 50% more homes on the market than pre-pandemic norms: Denver (+81.9%), San Antonio (+69.4%), Seattle (+66.7%), and Austin, TX (+52.2%). At the other end of the spectrum, seven metros remain over 50% below 2017–19 inventory levels, including Hartford (-82.1%) and Providence (-61.1%).

The S&P 500 is poised for a monthly loss after a whirlwind February defined by twin fears: that the AI trade has become a bubble, and that the technology itself could prove deeply disruptive. Treasuries, meanwhile, are wrapping up their best monthly performance in a year, a reminder that—for now at least—the $30 trillion market still reigns as a safety valve, regardless of all the doubts about US fiscal health. And if you thought bullion was the refuge of risk-averse retirees, think again. Gold above $5,000 an ounce is starting to look like the new normal.

U.S. Treasury yields fell Friday as investors reacted to a stronger-than-expected January wholesale inflation report, and a tumbling stock market amid rising fears of artificial intelligence hurting the economy.

The benchmark 10-year Treasury yield fell more than 5 basis points to 3.962%, while the 30-year Treasury bond yield dropped more than 3 basis points to 4.631%. The 2-year Treasury note yield was lower by more than 5 basis points at 3.389%.

WSJ: The K-shaped economy is creating new challenges for food companies.
 
The traditional strategy—once built around a broad, stable middle class—has effectively collapsed. Companies that previously sold to the masses now need to deploy two distinct playbooks: one for cash-strapped shoppers and another for higher-income consumers buoyed by rising stock markets.
 
In the wake of the pandemic, food giants hiked prices well beyond inflation. When consumers revolted against excessive costs and volumes dipped, companies like PepsiCo and General Mills pivoted to aggressive promotions to regain market share.
 
But there is a hidden barrier to entry for these savings. The better off often score deals through bulk sizes and loyalty perks. Meanwhile, many lower-income consumers—unable to afford the upfront cost of a deal—end up paying higher unit prices for smaller, budget packs.
 
Granted, price disparities have always existed. But the combination of stubborn food inflation and record income inequality is exacerbating the divide, forcing global food majors to rethink how they market to different economic strata.
 
Meanwhile, over the past three years, General Mills, Kraft Heinz and Conagra have seen their stock prices collapse. While a recent rotation out of Big Tech provided a modest lift to consumer-staples companies, valuations remain depressed. Kraft Heinz, for example, is trading just under 12 times forward earnings versus a 15-year average of nearly 16.

• General Mills shows the risks. Last week it warned of “significant consumer stress, especially for the middle and lower income groups,” due to inflation and reductions to government benefits like food stamps. The company lowered its full-year outlook for sales and profits, sending shares down 7% that day.

• For the cash-strapped, companies have to offer a low-enough out-of-pocket expense. This way the item stays in the weekly shopping basket, even if the price-per-unit is higher than what a higher-income shopper might get.

• Bob Nolan, senior vice president at Conagra Brands (the maker of Slim Jims), explained at a recent consumer conference that lower-income consumers are “shopping basket to basket or even meal to meal” until their next paycheck.

• Higher earners, conversely, have the “ability to invest” when promotions hit. They can buy 10 of an item on sale because they have both the liquid capital and the physical space—large pantries or even second freezers—to store it.

• Andre Maciel, finance chief at Kraft Heinz, said at the same conference, it is about offering discounts that work both for struggling consumers as well as for those flush with cash.
   

The economy ended in a downshift in the last quarter of 2025, after two quarters of stronger-than-expected economic growth.

Gross domestic product (GDP) recorded a 1.4% annualized growth rate in the fourth quarter, far below expectations. For the year, the U.S. economy grew by 2.2%, slower than the relatively robust 2.8% in the previous year and 2.9% in 2023.

Consumer spending — generally the largest contributor to GDP growth — rose 2.4% in the fourth quarter, a slowdown from the 3.5% growth in the third quarter but still solid. Purchases of goods fell, likely due to the decline in vehicle sales following the expiration of the tax credit for electric vehicle purchases. Meanwhile, purchases of services rose a healthy 3.4%.

Overall, consumers contributed 1.6 percentage points to overall growth, more than offsetting the negative contribution of government spending, which fell due to the lengthy federal government shutdown in the quarter.

A 22-property hotel portfolio serving as collateral for $265 million in commercial mortgage-backed securities debt moved to special servicing in January.

The case stands out because it exposes the limits of the post-pandemic hotel recovery narrative. The portfolio, comprising full-service, select-service, extended-stay and limited-service hotels, has yet to return to pre-crisis performance — despite carrying three of the industry's most recognized brands.

The Starwood Capital Group-owned portfolio includes 2,943 keys across 17 cities and operates under the Marriott, Hilton and IHG flags. It transferred to a special servicer effective Jan. 28 after the loan was flagged for imminent default, according to commentary reviewed by Morningstar Credit. The borrower had paid the loan through Jan. 11.

Net operating income in 2024 sat 57% below 2019 levels and 31% below the income level Fitch Ratings used at loan issuance, according to the bond rating firm's rating action in July. The portfolio's debt service coverage ratio — a key measure of a property's ability to service its debt — stood at just 64 cents per $1 owed for the trailing 12 months ended June 30, according to Morningstar DBRS. Weighted average occupancy fell from 72.5% when the debt was issued to 63.1%, while revenue per available room dropped from $84.80 to $78.90.

The portfolio's last formal appraisal, conducted at issuance, valued the collateral at $401 million. Both Morningstar DBRS and Fitch flagged that figure as likely overstated given the cash flow erosion, but neither agency published an updated valuation.

The loan does not mature until September 2028, giving the special servicer and borrower a window to negotiate. But with interest rates remaining elevated and hotel cash flows under pressure, analysts see limited options for a clean exit.

U.S. apartment rents increased in February, with the national average increasing to $1,716, a 0.1% increase from January’s upwardly revised figure of $1,714, according to Apartments.com's latest report on multifamily rent trends.

The monthly rent increase continues the trend of rising monthly rent changes that began in December 2025, but at a moderated pace. Prior to December, rents were flat or falling for five consecutive months. Annual rent growth eased marginally to 0.4% in February 2026 from 0.6% in the prior month and down from a 1.5% increase in February 2025.

While the rent change in February 2026 was positive, the increase was modest relative to typical February seasonality observed from 2010 to 2025, when rents increased by an average of 0.3%.

Supply pressures remain elevated and continue to temper rent momentum, resulting in uneven early-year gains that remain below typical February seasonal averages.

Across the U.S., 38 of the top 50 metropolitan areas posted rent increases, down from 42 in January. Areas posting the highest month-over-month rent increases were Richmond, Virginia, at 0.8%, San Jose, California, at 0.6% and Louisville, Kentucky, at 0.6%.

The steepest average monthly declines occurred in Nashville, Tennessee, down 0.2%, followed by Charlotte, North Carolina, Tampa, Florida, Houston, Austin, Texas, Orlando, Florida, Seattle and Orange County, California, where apartment rents decreased by an average of 0.1%. Many of these Sun Belt markets face elevated vacancy after newly constructed apartments opened, putting downward pressure on rents.

San Francisco posted the strongest annual rent increase at 5.7%, followed by Norfolk, Virginia, at 4.1%, San Jose, California, at 3.5% and Chicago at 3.0%. In contrast, apartment rents in Austin, Texas, recorded a 5.1% decline, while rents in Denver fell 3.4% and rents in Phoenix, Arizona, declined 3.3%, each reflecting oversupply outpacing demand.

During the rise of the internet in the 1990s, data center operators wanted to be near highly populated financial trading, commerce and government hubs like New York, downtown Los Angeles and Washington, D.C. Those geographic strategies look different today.

Northern Virginia, near the data-heavy federal government in Washington, D.C., is still considered the largest market for data centers, with what real estate services firm CBRE estimates is the capacity to use nearly enough electricity to power more than 3.5 million homes.

But the industry is heading further afield, with technology giants including Microsoft, Google, Meta and Amazon expanding into areas including southern Idaho, Texas' Big Country, Ohio, Indiana and the Midwest farmlands in search of lower-cost land and power.

The projects are part of an explosion in data and energy campus development across the United States — fueled by super-charged demand for computer processing power for artificial intelligence and cloud storage application — that is reshaping parts of rural America.

"Anyone who has land in core or secondary markets — and now farming areas — is trying to sell their site for multiples of what it's worth as data center land," said Andy Cvengros, JLL executive managing director and co-lead of the firm's U.S. Data Center Markets team, during a recent webcast.

At least 16 gigawatts of colocation and hyperscale data center space is under construction at new and expanding projects across North America, the highest amount on record, Andrew Batson, JLL's head of data center research in the Americas, told CoStar News.

Stocks exposed to the US housing market plummeted Wednesday amid depressing outlooks from companies like home improvement retailer Lowe’s. Investors also reacted to the lack of a housing policy update during President Donald Trump’s State of the Union speech. The S&P composite homebuilder index shed as much as 5.2%, the most since last April’s “liberation day” market meltdown.

Earlier this week, Home Depot’s Chief Financial Officer Richard McPhail said that “the homeowner is one of the healthiest customer cohorts out there, but they tell us that uncertainty is growing, that there’s concern around housing affordability, around job losses.”

Meanwhile, Lowe’s Chief Executive Officer Marvin Ellison on Wednesday said that “consumer confidence remains subdued given inflationary pressures and overall economic uncertainty.” He also flagged high mortgage rates, leading to a “persistent lock-in effect,” and slow new home building.

A cooler-than-expected consumer price index (CPI) report offered markets a welcome surprise last week.

Continued softening in housing costs, lower energy prices and a temporary drop in used-car prices led to a 0.2% monthly increase in January price levels, bringing the annual reading down to 2.4% from 2.7% in December.

Core inflation, which excludes the more volatile energy and food categories, fell to 2.5%, its lowest annual reading since March 2021. However, the monthly increase in core prices rose 0.3%, up from December’s 0.2% growth.

Bloomberg: Inflation may be down but, with grocery and electricity prices already at records, Americans aren’t feeling relief. Consumers now dole out $126 for what cost $100 before the pandemic, leaving many feeling they’re treading water rather than getting ahead.

The Supreme Court decision reverberated across the $30 trillion US bond market by threatening to increase the government’s budget deficit and do more damage to an economy already contending with elevated inflation and unemployment.

While Trump said he would approve a new 10% global tariff in place of the ones he just lost, the long-term outlook still remained unclear, given that the provisions of the law he invoked involve temporary duties.

“It’s a short-term vehicle,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. “The devil will be in the details with various trade deals to date.”

WSJ: Demographics, rising profits and soaring asset values have together wrought a quiet transformation in the American economy. Much of it is now in the hands of the elderly.

As of the third quarter of last year, people 70 and over controlled roughly 39% of all equities and mutual funds owned by households, compared with 22% in 2007, according to Federal Reserve data. Their share of net worth—assets minus debts—was 32%, up from 20% two decades earlier.

Online shopping may be AI’s next victim. In the age of agentic commerce, autonomous chatbots will select and buy goods for us—potentially rewiring digital retail.

The latest batch of estimates from the Census Bureau have reaffirmed Texas’ status as the nation’s leading state for population growth.

According to the bureau’s most recent release, the Lone Star State saw the largest nominal gains in the country last year, adding 391,243 new residents between 2024 and 2025. With continued momentum well into the 2020s, the state’s population now exceeds 31 million.

Texas added nearly twice as many new residents as the second-ranked state for nominal growth, Florida. The Sunshine State has experienced considerable tailwinds for commercial real estate in recent years as a wave of retirees and other domestic and international migrants settled in growing cities such as Miami, Tampa and Orlando.

Outside of Texas and Florida, the South is well represented among the nation’s fastest growing states. North Carolina, Georgia and South Carolina have also attracted a significant number of new residents to their metropolitan areas over the past five years.

International migration has halved over the past year, undercutting one of the largest sources of population growth for Texas. Texas added 167,475 residents from other countries over the past year, second only to Florida. While this is considerable, many experts anticipate that this level will shrink further with a more restrictive policy environment for immigration over the next few years.

In terms of domestic in-migration, North Carolina was the only state to attract more Americans to its borders than Texas. North Carolina, as well as Colorado, is one of the few states that manages to consistently attract Texans year after year.

Vacancy drives concerns in Dallas: Kroll Bond Rating Agency has downgraded seven ratings in a $200.3 million CMBS deal, citing rising losses from troubled office properties, including 2100 Ross Ave. in downtown Dallas.

The downgrades affect MSCI 2016-UBS9, part of a financing package now backed by seven assets.

The 2100 Ross office tower drove much of the concern. The 879,458-square-foot, Class A building has seen its occupancy plunge from 85.7% when the debt was issued to 64.3%, according to KBRA.

CBRE, the property's largest tenant, vacated in March 2022 after its lease expired. The real estate services firm had accounted for 20% of base rent at KBRA's 2022 review.

Leases generating 21.4% of base rent expire in 2026. Another 17.1% comes due in 2027.

The loan transferred to special servicing in November after the borrower defaulted on its balloon payment. The debt matured this month with an outstanding balance of $79.9 million.

KBRA estimated a $235,676 loss on the loan, reflecting a 0.5% loss severity. The firm valued the 33-story property at $79.5 million.

The special servicer reported the building is in good condition with no deferred maintenance.

CoStar data shows 225,640 square feet available for lease at 2100 Ross, a 27% availability rate.

U.S. existing home sales totaled 223K in January 2026

That's the lowest January existing sales volumes since 2009

Turnover remains strained in the existing-home market

Home prices are still climbing a little year-over-year in many regions where active inventory remains well below pre-pandemic 2019 levels, such as pockets of the Northeast and Midwest. In contrast, some pockets in states like Texas, Florida, and Colorado—where active inventory exceeds pre-pandemic 2019 levels by a solid clip—are seeing modest home price pullbacks or flat pricing.

FT: The US economy added 130,000 jobs in January, beating market expectations, in a sign of improvement in the American labour market that flies in the face of a string of recent gloomy reports.

Citi’s econ team: Strong January data does not change our view that the labor market continues to gradually weaken and that the unemployment rate is still likely to climb modestly higher this year. Risks remain towards an even larger rise in unemployment if layoffs pick-up more significantly. Indeed, the reason for our stronger January forecast was due to technical factors of substantial residual seasonality, not a fundamental improvement in demand for labor. Typically, activity and employment fall substantially in January after the holiday period, with a very positive seasonal adjustment to employment data. As hiring and labor market churn are already very low, this decline in January is smaller than usual and the adjustment too positive.

Liz Ann Sonders, Schwab: Prime-age labor force participation rate rose to 84.1% in January ... highest since March 2001

For the second consecutive year, Houston saw job growth fall below the historical average in 2025.

The Bayou City added just 14,800 jobs in 2025, according to preliminary data from the U.S. Bureau of Labor Statistics. For comparison, the metropolitan area has averaged about 56,000 new jobs per year over the past two decades. When excluding extreme boom‑and‑bust periods, such as the 2009 financial crisis, the 2020 pandemic and the unusually strong rebound years that followed, Houston’s typical annual job growth is closer to 70,000.

Private education and health services sector led job gains, which added almost 13,000 new payrolls, and was more than double that of the next sector — trade, transportation and utilities. Houston’s rapid population growth continues to drive demand for schools, healthcare and social services, and the ongoing expansion of the Texas Medical Center remains a major contributor.

The trade, transportation and utilities sector, which makes up a notable portion of Houston’s industrial employment market, added 6,300 new payrolls.

By contrast, the professional and business services sector accounted for most of the losses, shedding 18,500 jobs, levels similar to 2020 and among the steepest declines on record. The slowdown reflects restructuring across energy and energy‑related industries, which has reduced demand for engineering, consulting, legal and corporate support roles. Many firms are consolidating operations and automating administrative tasks. Elevated interest rates and broader economic uncertainty have also weakened demand for services such as management consulting and corporate expansion support.

Charlie Billello: In the first 4 months of the 2026 Fiscal Year the Federal Government took in $1.8 trillion and spent $2.5 trillion.

CRFB: Debt will reach a record 120% of Gross Domestic Product (GDP) by 2036.

• CBO projects that debt held by the public will grow by $25 trillion, from nearly $31 trillion today to $56 trillion by 2036. As a share of the economy, debt will grow from 100% of GDP today to a record 108% by 2030 and 120% by 2036.

• Deficits will exceed $3 trillion by 2036. Deficits will total $24.4 trillion (6.1% of GDP) over the next decade, rising from $1.8 trillion (5.8% of GDP) in 2025 to $3.1 trillion (6.7% of GDP) by 2036.

• Spending is larger and growing faster than revenue. Spending will rise from 23.1% of GDP ($7.0 trillion) in 2025 to 24.4% ($11.4 trillion) by 2036. Revenue will rise from 17.2% of GDP ($5.2 trillion) to 17.8% ($8.3 trillion) in 2036.

• Interest costs will explode. Nominal interest costs will more than double from $970 billion in 2025 to $2.1 trillion by 2036. As a share of the economy, interest costs will rise from a record 3.2% of GDP in 2025 to 4.6% by 2036.

• Major trust funds are approaching insolvency. The Highway Trust Fund will deplete its reserves by 2028, the Social Security retirement trust fund in 2032, and the Medicare Hospital Insurance trust fund around 2040.

• Deficit projections are higher than last year. CBO now projects $1.4 trillion more borrowing between 2026 and 2035 than it did last January, with $2 trillion of additional net borrowing from policy changes. The reconciliation law alone will add $4.7 trillion to the debt, while tariffs will subtract $3 trillion.

• The economy will surge then normalize, while interest rates will rise. CBO projects real GDP will grow by 2.2% in 2026, due in part to economic stimulus from OBBBA, but slow to 1.8% per year thereafter. They project PCE inflation of 2.7% in 2026, returning to its 2.0% target by 2030. CBO projects short-term interest rates will decline but remain above 3%, while ten-year Treasury yields will grow from 4.1% in 2026 to 4.4% in 2031 and beyond.

In January, such spending per household was up 3.3% year-over-year (YoY), more than the 2.6% YoY overall spending increase -BofA internal CC & debt card data

Average monthly spending per household on restaurants and bars in 2025 was $371 – this is up 30% from 2019. And though people are eating out more than they did in 2019, some of this strength is due to price increases.

BLS: food away from home was up 4.1% YoY in December 2025.

While the amount spent per transaction has increased YoY, the number of transactions per household has only grown at half therate. This underscores the narrative that consumers are being more selective when eating out

While spending per transaction growth is up across all generations and income levels, Baby Boomers consistently outpaced all generations. Additionally, this cohort exhibited the strongest average spending growth and number of transactions, especially among those with the top 5% of household income. Still, in actual dollar terms, younger generations spend more overall than their older counterparts. Notably, Gen Z and Millennials at the upper end of the income spectrum are eating out more frequently than Gen Xers.

Spending at casual dining spots – think full-service restaurants with a laidback setting – has declined for three consecutive years as has the share of spending at pizza places. The most dramatic drop in 2025 was among quick-service restaurants (i.e. order at the counter or at the drive-through) (QSRs) excluding pizza places. Pizza’s multi‑year share loss likely reflects both category saturation and shifting meal‑time behavior. The rise of QSR options that don’t sell pizza – particularly those with customizable bowls, handheld items, and perceived “healthier” choices – has created more competition in an arena where pizza has dominated weeknight convenience dining.

San Diego entered 2026 with nearly 9,500 market-rate units under construction after builders broke ground on 4,000 units last year. While that was slightly fewer than the 10-year average in starts, there were nearly 1,000 more units in the construction pipeline than the decade average.

After 4,900 market-rate units were completed in 2024, a 20-year-high 6,200 were completed in 2025. Another 4,800 are scheduled to be completed this year.

Those nearly 16,000 market-rate units would be the most to open in a three-year stretch in 25 years

About 234,900 residents moved into Arizona from other states and Washington, D.C., in 2024, while about 179,800 moved out. The resulting net change of about 55,100 people ranks Arizona as the nation’s fourth-largest recipient of net state-to-state inflows, trailing only Texas, Florida and North Carolina.

Demographics have long been a strength of the state. Relative affordability, greater job opportunity and the nonwinter climate form an appealing draw attracting residents. Maricopa County, the principal county of Phoenix and the fourth-largest in the nation, regularly ranks among the fastest-growing counties in the United States.

US companies announced the largest number of job cuts for any January since the depths of the Great Recession in 2009, according to data from outplacement firm Challenger, Gray & Christmas.

Companies last month announced 108,435 job cuts, a 118% increase from a year earlier. The report on Thursday also showed hiring intentions slid 13% from a year earlier to 5,306—marking the weakest total for any January in the firm’s records back 17 years.

“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” said Andy Challenger, the company’s chief revenue officer. “It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026.”

Almost half of the job cuts announced in January were tied to three companies—Amazon, United Parcel Service and Dow. Amazon announced plans to cut 16,000 corporate positions while UPS said it would shed as many as 30,000. Chemical maker Dow intends to eliminate about 4,500 positions, while Peloton Interactive and Nike also announced mass dismissals.

According to Bank of America internal deposit data, there remains a large gap between the after-tax wage and salary growth of higher- and lower- income households. In January, higher-income households' after-tax wage and salary growth was 3.7% YoY,
while for lower income households it was 0.9% YoY.

Middle-income households' wage growth, in our view, deserves close attention. These households' after-tax wage growth was 1.6% YoY in January 2026, tracking below the average of 2.0% YoY seen over the second half of 2025. This relative softness
may unwind, but if it persists it may lead to downside risks to consumer spending once the expected lift from tax refunds is over

The United States population is growing at its slowest rate since the height of the coronavirus pandemic, according to recently released U.S. Census Bureau estimates.

While that pace is set to ease further across the country, this structural slowdown is likely to amplify post-COVID regional population shifts to lower-density Southern and Western states, with implications for job and housing markets.

The 1.8 million people added between July 2024 and June 2025 represented a 0.5% growth rate. That's a significant drop from the unusually fast growth of 1% in 2024, and slower than what occurred during the years prior to the pandemic, when annual population growth averaged 0.7% each year between 2011 and 2019.

A sharp drop in immigration was the primary driver of the slowdown. However, the full impact of the Trump administration’s tighter migration policies and more aggressive deportations likely won’t show up in these data until the coming years.

Net immigration fell by more than half to 1.3 million from a modern high of 2.7 million the year prior. That’s still 45% higher than the pre-pandemic annual average of around 870,000. However, if monthly trends since January 2025 continue, the Census Bureau projects net immigration to fall to 321,000 in the year ending with June 2026, which would be lower than even 2021, with potentially net negative immigration in the years to follow.

Though international immigration to the South fell by nearly half through 2025, net domestic migration remained positive, helping the region maintain its status as the fastest-growing in the country. Still, the 0.9% growth rate in 2025 was down from 1.4% in 2024 and below the pre-pandemic average of 1% growth from 2011 through 2019.

The pace of net domestic migration slowed in the South as well, falling 10% year-over-year to levels about 12% below pre-pandemic averages. The most notable declines came in the largest states. Domestic migration to Florida fell more than 60% in 2025 to just 22,500, while domestic migration to Texas fell 22% to 67,000.

Economist Tom Lawler: Last week Fannie Mae and Freddie Mac released their monthly volume summary reports for December, the last monthly report ahead of the president’s January 9th post that the GSEs will buy $200 billion in MBS.

Combined they increased their Agency MBS holdings by about $59 billion in the second half of last year, and decreased their “corporate operating and liquidity” (COL) portfolios by about $69 billion. These figures suggest that the “cash” used to fund the increased Agency MBS holdings came from either runoff or sales from their COL portfolios, much of which are comprised of short-term securities.

This does not mean, of course, that the GSEs “replaced” short-term assets with longer-term assets without “hedging” the obvious interest-rate risk that would entail.Both GSEs use derivatives (e.g., interest rate swaps and to a lesser extent swaptions) to manage the interest rate risk of their mortgage investment portfolios, and presumably that continued in the second half of last year (the monthly volume summaries do not include data on derivative activity, though they contain some information about interest-rate risk).

One might assume that the GSEs have in fact “funded short” some of their recent MBS purchases, given that the market value exposures of both GSEs (especially Freddie Mac) to a 50bp shock to interest rates have increased significantly over the last year. However, that increased market-value sensitivity appears to stem almost completely by decisions by the GSEs (especially Freddie Mac) to increase the maturities/durations of their COL portfolios – in part, apparently, to reduce earnings volatility. For example, based on Freddie Mac’s monthly volume summary report it appears as if the duration of their COL portfolio went from about zero at the end of 2024 to about 28 months at the end of 2025. (There is no information on the duration of Fannie Mae’s COL in its monthly report0.

At the end of last year the combined GSEs COL portfolios totaled $222 billion, down from $292 billion at the end of June of last year. Given regulatory and GSE policies on liquidity management, it is unlikely that the GSEs will reduce their COL portfolios by all that much next year. As such, if the GSEs were to increase their agency MBS purchases by $200 billion over the next, say, several months, the GSEs are almost certainly going to have to ramp up debt issuance. Whether that will be in the form of shorter-term or longer-term debt issuance is unclear. Last year Fannie Mae’s gross issuance of debt with an original maturity exceeding one year was just $30.2 billion and maturities totaled $56.8 billion, while Freddie Mac’s gross issuance was $138.6 billion and maturities totaled $138.7 billion. It is unclear whether the “appetite” for longer-term GSE debt is sufficient to accommodate the sizeable implied increase in GSE longer-term debt issuance with having at least some impact on GSE debt spreads.

In all likelihood the GSE will also have to ramp their short-term debt issuance, and also ramp up their use of interest-rate swaps (especially pay-fixed swaps) in order to manage the interest rate risk association with a $200 billion increase in their Agency MBS portfolios.

Commercial Banks as a class are the largest holders of agency MBS, and as such many folks are focused on how commercial banks may react to the sharp reduction in agency MBS/Treasury spreads (both nominal and option-adjusted) since Trump’s January 9th post that GSEs would be buying $200 billion of MBS.

Average monthly apartment rents in the U.S. edged higher in January, extending the modest rebound that began in December following several months of no growth or rent declines in the second half of 2025.

The national average rent increased to $1,713, a 0.2% month‑over‑month gain from December’s revised average of $1,709. The January year-over-year increase was 0.6%, slightly lower than the 0.7% gain in December and down from the 1.5% average annual increase one year earlier.

The easing rent increase in January suggests that, while supply pressures remain elevated, the softness of late summer and early fall observed in 2025 continues to moderate as the market enters the early part of 2026.

Historically, rents in January build on December gains, when apartment rents begin to increase following the annual seasonal trough. January’s data largely followed that historical pattern, despite more pronounced rent moderation during the back half of last year.

National active listings are on the rise on a year-over-year basis (+10.0% between January 31, 2025 and January 31, 2026). This indicates that homebuyers have gained some leverage in many parts of the country over the past year. Some sellers markets have turned into balanced markets, and more balanced markets have turned into buyers markets.

Nationally, we’re still below pre-pandemic 2019 inventory levels (-17.8% below January 2019) and some resale markets, in particular chunks of the Midwest and Northeast, still remain, relatively speaking, tight-ish.

U.S. Treasury yields head steady on Friday after the latest producer price index came in more than double Wall Street estimates and after President Trump named Kevin Warsh as his pick as the next Federal Reserve chair.

The 10-year Treasury yield rose around 2 basis points to 4.251%, while the 2-year Treasury note yield slipped about 2 basis points to 3.531%. The 30-year Treasury yield added around 3 basis points to 4.887%.

CNBC

Warsh, 55, earned a law degree from Harvard University in 1995 before becoming a banker at Morgan Stanley, where he later served as vice president and executive director before joining the Bush administration in 2002 as executive secretary at the National Economic Council.

Bush nominated Warsh to serve on the Federal Reserve’s Board of Governors in 2006, with Warsh becoming the youngest person ever to join the central bank at 35.

During the 2008 financial crisis, Warsh aided in the government’s bailout of insurer AIG and assisted in JPMorgan’s acquisition of Bear Stearns, an 85-year-old brokerage that collapsed as the investment banking industry failed.

Warsh criticized the Fed’s decision to quickly lower interest rates during the financial crisis, arguing the cuts would only spur inflation, and was the only Fed official to argue against the central bank’s plan in 2011 to buy $600 billion in Treasury securities.

He joined the right-leaning Hoover Institution think tank after resigning from the Fed in 2011, and Warsh was among the finalists before Trump nominated Jerome Powell to succeed Janet Yellen as Fed chair in 2017.

Warsh is a critic of Powell, telling CNBC last year he supported a “regime change” at the Fed, claiming its policy has been “broken for quite a long time” and arguing Trump was “right to be frustrated” with Powell’s refusal to lower interest rates more quickly.

Consumers maintained robust spending in late 2025, according to new Bureau of Economic Analysis data released last week that had been delayed by the federal government shutdown.

However, shoppers increasingly dipped into savings accounts to get through the holiday season, reducing the personal savings rate to a three-year low. And with year-over-year real spending growth outpacing disposable income growth for the 17th consecutive month, this spending growth appears to be on an unsustainable path.

Still, economists expect consumer spending growth to continue in 2026. Those projections for positive, albeit slower, spending growth hinge on new tax policies delivering higher-than-average annual tax refunds in the first quarter. Combined with provisions of the One Big Beautiful Bill Act, these changes are expected to bring incomes and costs into better balance.

Earnings reports from some of the largest US manufacturers and transportation companies this week drove home how policies on trade and energy are putting a squeeze on the sector’s profits.

Caterpillar, which imports raw materials and parts for construction equipment, said it expects the levies to cost about $2.6 billion this year. Railroad Norfolk Southern said trade policy is eroding demand for some of its business lines, and shipping giant United Parcel Service said trade flows are shifting in a way that’s pressuring margins.

Meanwhile, on the energy front, power-equipment company GE Vernova Inc. took a hit last month after the Trump administration required work to stop on a wind farm off the coast of Massachusetts. Its wind business recorded a wider-than-forecast $225 million loss last quarter.

AI euphoria. Caterpillar and GE Vernova are seeing strong demand for their power-generation equipment, which drove up their stocks after this week’s reports. GE Vernova said it’s in frequent talks with the White House about ramping up production of its natural-gas turbines. Still, the unit’s “substantial headwinds” weighed on guidance for the year, Colin Rusch, an analyst at Oppenheimer, wrote in a note to clients. At the same time, he said demand in its power and electrification businesses is beating expectations.

High‑end consumers, still willing to pay for premium experiences, boosted demand at luxury hotels. Revenue per available room, or RevPAR, for the luxury hotel segment rose 3%. In contrast, consumers with less disposable income pulled back on both travel frequency and spending, leading to a 4.4% decline in RevPAR among economy class hotels.

Many economists describe the current U.S. economy as being 'K-shaped,' referring to the spending gap that appears to exist between the two ends of the consumer spectrum. Often, higher-income households have greater exposure to the stock market and own residential real estate, providing additional disposable income that they can spend on high-end experiences.

Lower-income households, however, need to allocate more of their income to necessities as inflation drives up prices. This, in turn, erodes travel budgets for lower-income consumers, putting pressure on more-affordable limited-service properties.

By contrast, luxury hotels have maintained pricing power. Room rates increased by an average of 3% in 2025, even as occupancy held steady at 2024 levels. This underscores the ongoing ability of luxury hotel owners and operators to command higher rates by delivering upscale experiences.

Office sales volume for 2025 was more than $56 billion, an increase of $10 billion from 2024, according to CoStar’s preliminary year-end figures. The year-over-year sales increase of more than 20% far exceeded that of the other major property sectors.

While values are still approximately 45% below the cyclical peak, the stabilization suggests that buyer interest in investment-grade multitenanted office assets is returning. While the risks have not disappeared, the prospect of capitalizing on lower property values has brought even some institutional buyers back off the sidelines.

Institutional buyers accounted for about 40% of transacted office value in the late 2010s, but their share began to fall sharply in early 2022. By 2024, they were involved in less than 20% of purchased office value. Occupiers and private buyers helped fill some of the gap, though many office building trades simply did not occur — as evidenced by depressed sales volumes in 2023 and 2024.

Last year, however, the institutional share of buying activity picked up again, ending the year above 25%. The return of these buyers was a major driver of the outsized increase in office sales activity, which accounted for its largest share of overall commercial property transaction volume since 2021.

At the end of 2025, a handful of Los Angeles commercial properties carrying playful names including Quick Quack and Crystal Cave sold at prices seriously above average. The real estate in question? A California mainstay: the car wash.

Across the nation, sales of car wash properties soared in the past year as operators cashed out of their owned real estate in sale-leaseback deals to fund their next wave of growth. Legislation adopted as part of the federal One Big Beautiful Bill last year boosts tax incentives for buyers of properties with qualifying equipment, such as car washes. That's expected to help send the sector to record transaction volume this year, property professionals say.

The bill "certainly won’t drive down pricing, but it significantly increases the buyer pool for the product type,” said Calvin Short, executive vice president and managing principal at SRS Real Estate.

Short said U.S. car wash deal activity surged to an estimated $350 million in the second half of 2025, with prices outpacing other property types on a per-square-foot basis, as investors rushed to lock in the tax benefit.

Falling oil prices could lead to reductions in rent as the Midland-Odessa area pushes through the slower winter months for apartment demand in early 2026.

As of late January, multifamily rents in Midland-Odessa were down a modest 0.1% year over year, while West Texas Intermediate was down roughly 14%. At roughly $58 per barrel, oil prices continue to decline from their peak of almost $273 per barrel in 2021.

The seasonal effects of the spring and summer months were particularly strong last year, helping Odessa resist falling into negative territory over the past 12 months. Nonetheless, slower rent growth is apparent in both markets as 2026 opens on shaky ground.

After strong leasing in the spring and summer, most apartment markets tend to see a slowdown in demand during the fall and winter months. In this way, Midland and Odessa are similar to their peers across the nation.

Inventory Boomerang hits housing market as last year’s 10-year high in delistings turns into a relistings jump. In the second half of 2025, there was a notable jump in delistings, as some home sellers—particularly in the Sun Belt—who couldn’t get their desired price decided to pull their homes off the market. Indeed, U.S. delistings as a share of inventory ticked up to 5.5% in fall 2025—a decade-high reading for that time of year.

In December 2025, ResiClub noted to readers that: “Looking ahead, in markets seeing the biggest jumps in delistings right now, many of those listings will likely return to the resale market in spring 2026—or test out the rental market.”

Fast-forward to January 2026, and we are indeed seeing an upswing in relistings*, according to Compass chief economist Mike Simonsen’s analysis of Altos Research data.

US inflation continues to come in lower than expected: 2.7% in December and Core Inflation (which doesn’t include food or energy costs) was 2.6% in December.

Food and energy (mainly utilities) continue to be key drivers of inflation right now. These are costs that all Americans pay regularly and can’t avoid.

In December alone, inflation ticked up 0.3%, but Core CPI was only up 0.2%.

A look at household balance sheets reveals a key driver of the disconnect between reported sentiment and actual spending. Asset-driven wealth accumulation, rather than employment-driven wage growth, is bolstering consumer spending. And that wealth accumulation has become increasingly concentrated among the highest-earning households.

The share of net worth held by the top 20% of households by income — those making more than $151,328 annually — reached 71.9% in the third quarter of 2025, according to Federal Reserve data. That is its highest share recorded since the Federal Reserve began tracking this data in 1989. Net worth is defined as the value of all assets, including real estate and stock portfolios as well as more liquid cash assets, minus total debt liabilities.

Delinquency rates on non-mortgage loans have begun to rise. The percentage of credit card balances more than 90 days delinquent reached 12.4% in the third quarter of 2025, up from 11.1% a year ago and a recent low of 7.6% in 2022. The resumption of student loan delinquency reporting after a three-year pause also pushed delinquencies to 9.4% of student loan balances.

Given the wealth distribution among households, these debt burdens are likely to affect middle-income households the most, as they hold higher levels of liabilities relative to their net worth than higher-income households.

IFP: Across federal, state, and local governments, the US is spending twice as much taxpayer money on seniors as it is on kids.

Major U.S. regional banks are projecting renewed growth in commercial real estate lending after years of reducing risk, citing lower interest rates and credit quality stabilizing across properties.

Banks including Regions Financial, PNC, M&T Bank, First Horizon, U.S. Bancorp and KeyCorp told investors during fourth-quarter earnings calls that they expect commercial lending to contribute to their portfolios in 2026.

The shift marks a potential turning point for commercial real estate finance after regional banks pulled back from the sector following the pandemic. Midsized lenders reduced exposure, as office valuations collapsed and interest rate increases made new deals uneconomical. Now, executives have said in recent days, the prospect of risk-adjusted returns signals renewed confidence.

The outlook follows Federal Reserve interest rate cuts that began in September 2024. Lower rates improved banks' ability to cover total debt payments with their operating income and made new commercial real estate projects economically viable.

"We've been very successful when things mature to be being able to refinance" commercial property loans, Regions Chief Financial Officer David Turner said on his company's earnings call. "The rate environment's helping a bit more on growth in that space."

That is particularly true in multifamily housing, where, as rates have come down, the math is starting to work, Turner added.

Regions had demanded larger down payments when rates were higher, creating friction with developers, Turner said. Lower rates, though, have brought balance back to the market.

Regions said elevated capital markets refinancing activity during 2025 constrained loan growth, but this headwind has largely passed.

San Diego’s retail market ended 2025 with its highest availability rate since 2021. At 5.2%, it was a tick below the 10-year average. Over 1.3 million square feet was added to the leasing market in 2025, the most in a calendar year in the past decade.

Availability has loosened the most for midsize boxes in malls, neighborhood centers and power centers. Macy's, Joann, Kohls, Rite Aid and Party City were among the brands closed in 2025 from Chula Vista and Central San Diego to Vista and Escondido. Availability in each of these subtypes rose more than a full percentage point year over year in 2025, exceeding their 2019 year-end levels.

Small deals for shop space continuing to drive leasing volume, have remained stable, as the loosening availability has not spread evenly across the region. The availability rate in these two subtypes, conversely, has been trending below their pre-pandemic levels.

While the pace of move-ins improved year over year in 2025, overall negative net absorption was driven by a 30% year-over-year increase in move-outs. Over half of the negative absorption in 2025 was tied to national retailers.

Availability in San Diego's four- and five-star properties has been trending at its lowest point in a decade, running roughly 2 percentage points below the market-wide rate. In fact, high-end properties account for only 5% of all available space in the region.

Texas has nearly 15,000 rooms under construction across its major metropolitan areas and regional markets, with development most concentrated in Dallas, Austin and Houston.

Texas Central, the East Texas region and El Paso, are also experiencing significant activity. El Paso leads Texas in the share of hotel rooms under construction relative to its existing inventory at 4.8%. New development is driven primarily by upscale and upper-midscale projects, with a strong emphasis on extended-stay properties, which have continued to define the market’s recent room expansions over the past few years.

Dallas ranks first statewide with 4,244 rooms under construction. Austin follows with 2,111 rooms now being built. 1,399 hotel rooms under construction in Houston, 1,360 in Fort Worth-Arlington and ongoing development in San Antonio, all contributing to continued urban growth in Texas’ largest metropolitan areas. Regional hubs are also making meaningful contributions to the pipeline, including 1,453 rooms in Texas Central and 668 in Texas South.

By hotel class Mid-tier segments, particularly upper-midscale and upscale, continue to represent the bulk of hotel development in Texas. These categories represent roughly 66% of the statewide pipeline, or about 9,980 rooms now under construction. Luxury and upper‑upscale projects account for roughly 22% of total activity.

Invitation Homes—one of the largest institutional landlords, which wholly owns 86,139 single-family rentals—announced Thursday that it has acquired ResiBuilt, a Southeast-focused build-to-rent (BTR) developer, for $89 million. Atlanta-based ResiBuilt has delivered more than 4,200 homes since its founding in 2018 and operates across Georgia, Florida, and the Carolinas. The transaction includes 23 existing fee-build contracts and a pipeline of additional third-party development opportunities. Invitation Homes also secured options on approximately 1,500 lots. The development here isn’t that Invitation Homes is adding new-build homes to its portfolio—it has been executing bulk deals with homebuilders for years—but that it is now moving upstream by creating its own in-house homebuilder via its acquisition of ResiBuilt, a build-to-rent developer.

Trapped renters want home prices to fall so they can finally get onto the property ladder. Millions of existing owners want values to stay high. These and other conflicting interests make it hard for policymakers to give young Americans a leg up in a brutal housing market.

U.S. existing home sales totaled 4.06 million in calendar year 2025. That's tied for the lowest year since 1995—and essentially flat from 2023 (4.09M) and 2024 (4.06M). On a seasonally adjusted annualized basis, U.S. existing home sales are now running at 4.35M... meaning, if we maintain the current rate of existing home sales—and seasonality acts as expected—we'd see slightly more existing home sales in 2026 than we saw in 2025.

This graph based on data from Altos Research shows that active inventory of single-family homes, as of January 16th, was up 10.1% YoY compared to the same week in 2025. This will be important to track, and it is possible inventory bottomed very early this year. The significant pickup in inventory usually happens in March.

The Mortgage Purchase Application Index at the second week of January, by year:

• January 2018 —> 249.2

• January 2019 —> 278.5

• January 2020 —> 303.9

• January 2021 —> 338.9

• January 2022 —> 305.7

• January 2023 —> 201.0

• January 2024 —> 162.2

• January 2025 —> 162.0

• January 2026 —> 184.6

Zoomed out, mortgage purchase applications are starting 2026 in ‘historically soft’ territory (bottom 25th percentile). However, they’re now approaching the bottom threshold (188.9) for ‘historically normal’ purchase apps levels (25th–75th percentile). Historically, mortgage purchase applications have been a leading indicator of U.S. existing-home sales. Current purchase application data suggest sales could rise a little in 2026 relative to 2025. But even with a small uptick this year, resale turnover would still remain at constrained levels.

Austin, Texas is the strongest buyer's market in America with home sellers outnumbering homebuyers by 128%.

U.S. Treasury yields rose on Friday as investors monitored the economic outlook and geopolitical concerns.

The benchmark 10-year Treasury yield gained more than 6 basis points to 4.227%. The yield on the 2-year Treasury advanced 3 basis points to 3.594%. The 30-year Treasury yield was also more than 5 basis points higher at 4.836%.

The Bureau of Labor Statistics recently reported a headline-grabbing 4.9% annualized increase in labor productivity for the third quarter of 2025, a figure notable for its broader implications even for data that can be difficult to measure and is famously volatile.

The longer-term increase of 1.9% over the year marked the third consecutive quarter of annual productivity growth and represents a significant improvement from the 1.2% average rate in the 2010s, a decade characterized by weak productivity growth during the recovery from the Great Recession.

Still, a closer look at the data reveals a challenging trend for job-seekers and policymakers alike: Employment gains and economic growth are becoming increasingly decoupled.

Demographic trends, immigration restrictions and employer caution are limiting job growth, while technology-driven investments are boosting economic output. Since 2017, labor productivity, defined as economic output per hour worked, has risen nearly 18%, but labor compensation’s share of that output fell roughly 5%, its lowest level on record.

Limited growth in the labor force, due to immigration restrictions and the continued aging of the workforce, blunted the impact of this slower growth on the unemployment rate. The unemployment rate grew 0.3 percentage points to 4.4% in 2025, while the labor force participation rate fell 0.1 percentage points to 62.4%

Indeed, productivity-enhancing technological investments, combined with slower labor force growth, will likely enhance the disconnect between employment and economic growth. While Oxford Economics projects a 2.5% increase in GDP in 2026, employment growth is projected to slow to 0.2%.

This divergence may be even more pronounced in metropolitan areas at the frontier of technological investments. San Jose, for example, is expected to lead the nation in GDP growth at 4.7% while adding only 0.4% to its regional payrolls. Among the top 10 projected GDP growth leaders in 2026, the disconnect is similar in Seattle (4.1% GDP growth, 0.4% employment growth), San Francisco (3.8% GDP growth, 0.2% employment growth) and Boston (3.1% GDP growth, 0.1% employment growth).

JPMorgan Chase CFO Jeremy Barnum hinted Tuesday the industry could fight President Donald Trump’s demand for credit card price controls, saying “everything’s on the table.”

“If you wind up with weakly supported directives to radically change our business that aren’t justified, you have to assume that everything’s on the table,” Barnum said on a call with reporters following JPMorgan’s fourth-quarter earnings report. “We owe that to shareholders.”

Barnum was responding to a question about whether banks would choose to litigate to block Trump’s demand, made late Friday, that card companies cap interest rates at 10% for a year. Last year, the industry successfully fought efforts by the Consumer Financial Protection Bureau to cap card late fees.

“People will lose access to credit… that’s a pretty severely negative consequence for consumers and frankly, probably also a negative consequence for the economy as a whole,” said Barnum.

“If you make these products unprofitable, that [$6 trillion] spending will be drastically reduced – and that’s British understatement,” said Citigroup’s UK-born CEO, Jane Fraser.

“You will see unintended consequences,” said Bank of America CEO Brian Moynihan.

It’s a position they’ve been in before. In 2009, the Credit Card Accountability Responsibility and Disclosure (CARD) Act restricted card companies’ flexibility to change rates on existing borrowing and extended the time consumers had to pay. It’s one of the reasons credit card rates are as high as they are today. “If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger,” Jamie Dimon said at the time. “And my guess is, over time, it will all be repriced into the business.”

It was. The spread between upfront card rates and the Fed Funds rate rose from around 10% prior to the Act to 14% afterwards. More recently, a now abandoned regulatory proposal to cap late payment fees led to another run-up in credit card spreads to their current level of around 18%.

Marc Rubinstein

WSJ

Small business profitability edged higher in 2025, with the Bank of America small business account inflow‑to‑outflow ratio rising slightly above 2024 levels. However, profits lost steam as the year closed, with year‑over‑year (YoY) profitability growth turning slightly negative for the second consecutive month in December, reflecting mounting cost pressures.

In the last few months of 2025, small business uncertainty trended downwards and optimism improved, according to the National Federation of Independent Business. Still, small business uncertainty has remained historically high over the past eighteen months due to a mix of consumer spending trends and policy affects such as tariffs.

After slowing throughout much of the second half of 2025, small business hiring activity picked up at year‑end, with payments to hiring firms up 7% from the 2024 average. Small retailers led the rebound, while services continued to lag, leaving the key question for 2026 as whether firms are ready to start hiring again.

Aided by strong tenant demand and a development community eager to see projects break ground, the two markets saw around 62 million square feet of new industrial projects started in 2025 alone.

For Dallas-Fort Worth, this trend has been a return to form for the market, which typically sees around 32 million square feet of groundbreakings during normal development cycles. One notable shift that did occur was in the construction of speculative space.

For most of the 2020s, construction built on speculation has been the primary driver of development in North Texas.

Bulk logistics, in particular, has seen a shift towards more build-to-suit or owner-occupied projects. Included in this is Amazon’s new 1.7-million-square-foot facility in Cleburne, which commenced construction in November 2024. Previous hotspots for this activity, like South Dallas, have seen developer appetite for speculative projects dry up as the market continues to work through prior deliveries. Instead, construction continues in areas such as Northeast Tarrant County, around the Alliance area, or in projects like Passport Park West, located near Dallas-Fort Worth Airport, where lenders are traditionally more confident in obtaining a return.

As of early 2026, the bulk logistics product currently under construction has an availability rate of nearly 65%, led by the 1.1-million-square-foot Alliance Westport 24, which is expected to be completed early in the first quarter.

Construction starts in Houston surged to a three-year high in 2025, driven largely by speculative development. More than 29 million square feet of industrial space broke ground — about 50% above 2024 and the highest level since 2022. Currently, 27 million square feet is underway, with 75% available for lease, much of it concentrated in the big-box segment. Over the past five years, Houston’s inventory of logistics properties 100,000 square feet or larger has grown by more than 30%.

Availability is especially elevated in the southeast near the Port of Houston, reflecting a steady influx of new supply. As of the first quarter of 2026, the East-Southeast Far submarket leads Houston with nearly 6 million square feet under construction.

In October, the 421,000-square-foot DC 10 in the Cedar Port Industrial Park in Baytown broke ground. In August, the 375,000-square-foot Baywood Logistics broke ground in Pasadena. Both of these properties are entirely available for lease.

Anchoring the submarket is the Port of Houston, one of the world’s largest ports. To meet rising demand, the $1 billion Project 11 is underway to expand and deepen the channel, with completion expected in 2028.

Beltway 8, the 88-mile loop encircling Houston, also remains a focal point for new projects, with most of the metropolitan area’s construction pipeline concentrated along this corridor.

Large logistics users continue to favor newer facilities, often at the expense of older properties.

While leasing activity remains robust, at more than 63% above pre-pandemic norms, this elevated pace of move-outs pushed headline net absorption to its lowest level in 13 years. Despite the churn, over 41 million square feet of industrial space was leased last year.

Orange County’s office market ended 2025 with its strongest momentum in more than a decade as tenant move‑outs slowed sharply and move‑ins accelerated, pushing quarterly net absorption to 1 million square feet. This marked the highest quarterly absorption total since 2013 and represented a clear uptick in demand.

Gross tenant move‑outs in the fourth quarter fell to a post‑pandemic low of 2.1 million square feet, while 3.1 million square feet of move‑ins reflected expansions by manufacturing companies and medical tenants. Hyundai, Anduril Industries and several medical users accounted for much of the late‑year expansion, helping offset earlier losses and bringing total 2025 net absorption above 800,000 square feet, its best annual performance since 2016.

The renewed demand helped pull vacancy in Orange County’s office market down heading into 2026. Vacancy dropped 70 basis points in the fourth quarter to under 12%, punctuating improvement from the 13.5% peak reached in 2023.

US mortgage rates slid last week to one of the lowest levels in years, sparking a flurry of purchase and refinancing activity that offers hope for a plodding housing market. The contract rate on a 30-year mortgage dropped 7 basis points to 6.18% in the week ended Jan. 9, according to Mortgage Bankers Association data released Wednesday. That’s the lowest reading since September 2024 and one of the lowest since 2022.

President Donald Trump announced that: “I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it.” Soon afterwards, Senator Bernie Moreno (R-Ohio) tweeted that he’ll "introduce legislation in the Senate to codify this [ban] into law.”

On a national level, “large investors”—those owning at least 100 single-family homes—only own around 1% of total single-family housing stock. That said, in a handful of regional housing markets, institutional and large single-family landlords have a much larger presence. Markets like Phoenix and Atlanta became major hubs for institutional single-family rental investment following the 2008 housing crash as the asset class started to institutionalize. Firms such as Invitation Homes, Progress Residential, and AMH built sizable portfolios in these metros by acquiring distressed homes. That early activity helped establish a reliable local SFR ecosystem—including property management firms, leasing infrastructure, and contractor networks—that makes it easier to scale and expand single-family rental and build-to-rent operations today. Following the bottom-buying wave, institutional capital remained concentrated in high–population-growth Sun Belt markets, where investors anticipated stronger long-term growth in incomes and overall rental growth. Looking ahead, if a ban on institutional homebuying were enacted, its effects would likely be most pronounced in high-growth Sun Belt markets—especially in specific neighborhoods within metros such as Phoenix, Dallas, Atlanta, Austin, Tampa, Jacksonville, and Charlotte—where institutional ownership is more concentrated.

A forced institutional sell-off could temporarily put additional downward pressure on home prices in certain Sun Belt neighborhoods that are already experiencing corrections

One of the biggest questions right now is whether Trump’s proposed institutional ban would apply only to institutional scatter-site purchases (i.e., buying existing homes on the market) or also to build-to-rent development (i.e., building communities and homes specifically for rent). If policymakers were to also restrict institutional build-to-rent development, it could have a noticeable negative impact on overall homebuilding later in the decade, in 2027, 2028, and 2029. While single-family build-to-rent is currently only hovering around 8% of total U.S. single-family housing starts, it has driven much of the marginal increase in U.S. single-family housing starts in recent years. Back in pre-pandemic 2017 to 2019, single-family build-to-rent starts made up just around 3% of total U.S. single-family housing starts.

Not long after interest rates spiked in mid-2022 and the Pandemic Housing Boom fizzled out, many institutional landlords, including AMH, stopped buying via the MLS. However, AMH continued to barrel ahead building its own single-family rentals. Indeed, 95.7% of institutional landlord AMH’s single-family acquisitions through the first three quarters of 2025 came via its in-house homebuilding unit. According to Builder100, AMH’s in-house homebuilding unit ranks as the nation’s 37th-largest homebuilder.

Happy holidays, Merry Christmas and Happy New Year. We’ll be on hiatus and will see you in the new year.

Goldman Sachs Research forecasts the global economy will generate “sturdy” growth in 2026. In fact, our economists’ forecasts for most major countries are at or above consensus estimates.

“As has typically been the case since the pandemic, we are most optimistic (relative to consensus) in the US,” writes Jan Hatzius, chief economist and head of Goldman Sachs Research, in the team’s report titled “Macro Outlook 2026: Sturdy Growth, Stagnant Jobs, Stable Prices.”

Delayed data show that the pace of consumer spending slowed heading into the final quarter of 2025, but retailers raised few alarms in their early holiday shopping season reports. Retail sales data for October showed little change over September overall, and some sectors saw solid gains.

Higher-income households, bolstered by the wealth effect of higher asset prices, have continued to drive demand for discretionary goods, such as travel, entertainment and big-ticket items like cars and appliances. At the same time, discounters have reported that middle-income households are trading down as persistently elevated inflation and job market skittishness weigh on their spending.

Thus, a K-shaped pattern has emerged in consumer sentiment data, with survey respondents reporting consumer sentiment near all-time lows while sales continue to grow.

Orange County’s industrial sector is navigating a challenging landscape as new supply is completed amid a period of contracting demand. Deliveries are projected to reach nearly 2 million square feet in 2025, approaching the 20-year high of 2.5 million square feet in 2023. With 80% of the space completed in 2025 or under construction available for lease, owners are offering concessions and cutting rents to attract tenants.

Irvine leads development, with eight buildings encompassing over 1 million square feet of inventory completed in 2025 or under construction as the year comes to a close. Other developments are scattered across Orange County, with notable activity in Anaheim, Santa Ana, Cypress and Huntington Beach.

Tenant demand for the larger new buildings has been soft. Only seven of the nearly 20 buildings larger than 100,000 square feet completed since 2024 have been leased. Of their cumulative 2.8 million square feet, 67% remains available. Demand is stronger for buildings under 100,000 square feet among both single- and multitenant properties. Twenty buildings of this size range have been completed since 2024, and, conversely, only a few, accounting for 16% of the completed space, remain available for lease. Most recently, Pacific Aerodynamic leased a new 52,000-square-foot building developed by Rexford Industrial, 2390 N. American Way Orange, on a five-year, two-month term.

Developers have lowered rents on recently completed spec developments that have been lingering on the market from over $2 per square foot, triple-net, to a range of $1.65 to $1.80 per square foot. Overall, asking rents for all industrial buildings in the market have declined by roughly 12 percent from peak levels, reflecting elevated vacancy and competitive conditions amid a shrinking tenant base.

Potbelly Sandwich Works expects to open 50 new locations next year, including its first store in Atlanta, as part of an aggressive growth plan that follows its acquisition by a Southeast convenience store chain.

The Potbelly chain has identified 23 locations for its planned 50 new stores in 2026, including locations in the following markets: Houston, Texas; Cleveland and Columbus, Ohio; Jacksonville, Florida; Charlotte, North Carolina; and Hampton Roads, Virginia, among others.

RaceTrac acquired Potbelly in October for $566 million, part of a wider trend of convenience store operators expanding foodservice offerings. Rivals like QuikTrip, Sheetz and Wawa are beefing up menus primarily through in-house methods, such as adding larger kitchens inside stores and enlarging food distribution centers to better service locations.

Privately held RaceTrac, which has about 800 stores primarily in the Southeastern and South Central regions under the RaceTrac and RaceWay names, said after its Potbelly acquisition announcement that it doesn’t plan to locate Potbelly shops in all its convenience stores.

For many of the fast-casual chains that have grown so much over the past decade, the economic slowdown that already hit the fast-food industry has finally arrived. Only now, as chains like McDonald’s and Burger King boast rebounds helped by deals on discounted meals, healthy fast casuals are discovering that even relatively well-to-do workers have their limits.

The industry’s last round of earnings laid bare how vulnerable this once fast-growing niche really is. The most striking results came from Sweetgreen Inc., the chain that taught office workers to spend $17 on a sad desk salad. Its sales fell 9.5% in the third quarter from the prior-year period, even more than Wall Street had predicted, sending its shares plummeting; as of Dec. 15, it had lost 77% of its market value in 2025. Chipotle Mexican Grill Inc., the first national chain to market ingredients as more ethically sourced—and therefore worth more money—also delivered bad news. After predicting its performance in 2025 would be flat with 2024’s, it now says it will see a sales decline in the low-single-digit range. Its shares were down 40% for the year as of Dec. 15. Cava Group Inc., the once-unstoppable maker of Mediterranean bowls, says foot traffic has stalled. It still expects sales growth from existing restaurants for the year, but only 3% to 4%, it says, not the 4% to 6% once predicted.

Chipotle and Cava both seem allergic to the suggestion that lower prices might help with flagging demand. “Value as a price point is not and will not be a Chipotle strategy,” said CEO Scott Boatwright in a recent earnings call, even while acknowledging that the fast-casual sector “has been deemed unaffordable.” A few days later, in his company’s earnings call with analysts, Cava CEO Brett Schulman, said basically the same.

At market research firm Technomic, analysts track how consumers perceive value. “Price became the most important factor this year for the first time” in the restaurant category, says Richard Shank, vice president for innovation, speaking about how consumers consider the various components of value. “It used to sit in the fourth position,” after quality, service and portion size. In December, Just Salad dropped the price of one of its market plates from $14.99 to $9.99 in Manhattan; sales more than doubled. Sweetgreen has told investors it’s evaluating its prices, offering a loyalty program that comes with discounts here and there, providing some lower-priced seasonal options and, in December, a $10 bowl. Getting people back in the door may require Sweetgreen to make such offerings a regular presence on the menu, which would render the difficult economics of an industry with famously thin margins even more challenging. There’s one obvious way to drive down the cost of bowl-making, though: Offer smaller salads at a discount. A so-called healthy lunch can get close to the 1,000 calorie mark at many fast-casual restaurants, which is more than many people—especially the increasing number taking GLP-1 weight loss drugs—are looking for in the middle of the day. Fast-food restaurants once found success by offering customers much more food for a bit more money. Maybe it’s time for fast-casual restaurants to do the opposite—and cater to the crowd who thinks that, in this economy, less is more.

From the NAR: NAR Existing-Home Sales Report Shows 0.5% Increase in November

Month-over-month • 0.5% increase in existing-home sales – seasonally adjusted annual rate of 4.13 million in November • 5.9% decrease in unsold inventory – 1.43 million units equal to 4.2 months' supply

Year-over-year • 1.0% decrease in existing-home sales• 1.2% increase in median existing-home sales price to $409,200 emphasis added

SAAR: Seasonally Adjusted Annual Rate

During their earnings call on Wednesday, executives at Lennar—a giant homebuilder with a market capitalization of $27 billion—said the federal government is working on a plan to help alleviate strained housing affordability. Lennar executives said federal officials are actively engaging with homebuilders and industry groups to better understand constraints—and to avoid policies that could unintentionally damage supply. While no specific program was outlined, management suggested it would be “surprising” if no meaningful action emerged in 2026, given current discussions.

“I think the crystal ball around government activity is really complicated, but I can tell you that a number of homebuilders have gone in to see critical officials within the [federal] government. We have received a lot of attention. There's a lot of thought process going on. You've seen trial balloons put out around various types of programs. What's interesting is that the government has been very tuned in to the industry to make sure that they're not walking into unintended consequences. So whatever is done, that it be constructed properly, is important. And to your question of you know, do I think that something will come out in 2026? I'd be surprised if something isn't done. I think affordability is very much on the table. It's a political issue right now, and I think across the country, you're hearing the drumbeat of that being a primary focal point, and politically it's important that someone pick up the mantle and do something to address it, rather than just throw money at it. So it'll be interesting, and we'll have to sit back and wait and see what comes out.” Stuart Miller, co-CEO of Lennar, said on their December 17, 2025 earnings call

The opening of the Atlantic Station mixed-use project in 2005 showed Atlanta how the concept of a self-contained village of homes, shops, offices and restaurants could succeed. It turns out that now, 20 years later, plenty more developers think it's a good idea, too.

Atlantic Station came to life after the conversion of a former Atlantic Steel mill site about 4 miles north of downtown Atlanta, marking a milestone in local commercial property by reviving a section of the city. What had been industrial ruins cut off from the rest of Atlanta is now a collection of office towers and retail buildings, connected to Midtown Atlanta by a brightly colored yellow bridge spanning the Downtown Connector interstate highway.

It opened up a new part of Atlanta to development, the West Midtown district, that had been home to "a landscape of underutilized properties with limited connectivity and investment," said Vikram Mehra, senior managing director at Hines, the property manager for Atlantic Station.

In a way, Atlantic Station is a victim of its own success, facing added competition from other developments that sprang up in its image. At the same time, its popularity shows how successful projects can influence development patterns throughout a city.

A handful of nearby developments have benefited from proximity to Atlantic Station. That includes Star Metals, with an office tower occupied by online gambling provider PrizePicks and other tenants, and The Works, a 1950s industrial building converted into offices for Google, as well as shops and restaurants that complement its residential component.

"Live, work, play was the slogan of the real estate universe for a long time," said Henry Poer, senior vice president and Atlanta co-market leader at SRS Real Estate Partners, who has represented clients in retail leases at Atlantic Station. "I would argue it still is extremely relevant. Atlantic Station provided a blueprint for all three phases in an urban location."

It may be a local development trailblazer, but Atlantic Station still faces the headwinds of any property with some retail. That includes the upcoming departure of two tenants: a Publix supermarket and shoes and apparel retailer DSW. A Publix spokesperson confirmed with CoStar News that the Atlantic Station store will close on Dec. 27, but didn't specify the reason behind the closing. Designer Brands, the parent company of DSW, did not respond to CoStar News' requests for comment.

Construction on Haggard Farm, a $750 million, nearly 130-acre mixed-use project in Plano, Texas, a city about 19 miles north of downtown Dallas, is underway. The residential, retail and office project is being built through a joint venture between the Haggard family, Dallas-based Stillwater Capital and experiential hospitality firm WoodHouse.

From a farm-to-table restaurant to a boutique hotel and social club to office and living space, Haggard Farm is setting itself as a place of gathering and community in the Dallas-Fort Worth region. Parts of Haggard Farm are expected to include a working farm with vineyards, a bee yard and seasonal crops.

WoodHouse, the creator behind concepts such as Dallas' private social club Park House and The Moore, a private members club with a hotel and restaurants in the Miami Design District, has been tasked with delivering a curated farm experience to Haggard Farm with agrarian and nature-infused programming offering a respite from city life.

WoodHouse is co-developing Almanac 1856, a farm-to-table restaurant, and Haggard Hall, a timber-framed event barn designed for social and corporate events, alongside Stillwater.

The initial phase of the project includes about 100,000 square feet of retail space, 350 apartments, 188 townhouses and hike-and-bike trails with a 3-acre park and seasonal gardens, grapevines and orchards. The retail space is being developed in partnership with The Retail Connection, a Dallas-based, retail-focused real estate firm.

Additional portions of the $750 million project at full build-out are expected to include 650,000 square feet of offices, hundreds of additional apartments and a 125-key boutique hotel with a private social club integrated into it and created by WoodHouse, officials said.

The Fed delivered on an interest-rate cut. The Federal Reserve announced, as expected, that it would cut its interest-rate target by a quarter point, to a range of 3.5% to 3.75%. The Fed also said it would resume expansion of its balance sheet by buying short-term Treasury securities, aiming to head off pressure in overnight lending markets

But it was uncertain about future cuts. In its statement, and at the press conference of Chair Jerome Powell, the Federal Reserve appeared to set a high bar for the next cut. “We’re well positioned to wait and see how the economy evolves," Powell said.

CNBC

Applications for unemployment benefits rose last week as out-of-work Americans put Thanksgiving behind them. It was the biggest rise since the onset of the pandemic as initial claims increased by 44,000 to 236,000 in the week ended Dec. 6. The figure exceeded all but one estimate in a Bloomberg survey of economists.

Lower-income households continue to face the highest inflation rates, even as the gap with the higher-income cohort has narrowed since 2024. Price pressures remain concentrated at the lower end, signaling continued strain on household budgets.

Not every consumer basket looks the same. Lower-income consumers tend to spend more on necessities, like food and shelter.

And, as rising housing costs eat into discretionary budgets, Bank of America payments data finds shelter has been the most persistent upward mover in consumer baskets over the past three years.

Where else has wallet share increased? Entertainment and online retail remain bright spots for lower-income groups, but overall discretionary share growth is increasingly skewed toward those of higher incomes. In fact, these consumers have boosted restaurant and travel spending compared to 2019, while those earning <$50K have cut back on dining out and clothing.

Another concern is that lower-income households continue to feel the biggest price squeeze. Recent analysis from the New York Fed estimated that inflation continues to be highest for lower-income households. In August, estimated overall inflation was 3.0% year-over-year (YoY) for the bottom two income quintiles, compared with around 2.9% YoY for the middle- (40%-80% of income distribution) and higher-income (top 20%) groups. Though this gap has improved since last year, BofA Global Research expects inflation to inch even higher next year, likely leading to further pressure on all households

What makes the inflation impact different for each income group? The breakdown in consumers’ baskets. In aggregate, according to consumer expenditure data from the Bureau of Labor Statistics (BLS), the two largest components of consumer expenditure are housing (33% of the total) and transportation (17%); in other words, necessities that are hard to avoid or cut back on, and that tend to weigh most heavily on lower-income groups. Similarly, food – both groceries and restaurant spending – accounts for around 13% of the consumer spending basket.

The Institute for Supply Management’s purchasing managers index, or PMI, for nonmanufacturing industries rose to 52.6, its highest reading since February and marking the 10th month of expansion in that sector this year.

At the same time, the manufacturing PMI posted a 48.2 reading, its ninth consecutive reading signifying contraction.

Price pressures eased in the services sector, with that index falling to 65.4 from 70, while the manufacturing prices index ticked up slightly to 58.5 from 58 in October.

Lower energy prices provided some cushion for the plastics, rubber and petroleum manufacturing subsectors. At the same time, cost increases for aluminum, copper, electrical equipment and other commodities drove input prices higher across other goods-producing subsectors.

Among non manufacturing subsectors, only construction saw cost declines, the result of broader cooling in the sector as commercial and residential groundbreakings continue to slow. In both broader sectors, however, price pressure remains significantly above the pre-tariff two-year average of 58.9 in the services sector and 50.1 in manufacturing.

New manufacturing orders reached expansionary territory in August and neared that level in October, at 49.4, leading to production growth in September and November.

Monthly apartment rent growth in the United States declined last month in its largest November drop in more than 15 years as an oversupply of units affects all parts of the country.

The national average monthly rent fell to $1,706, a 0.18% decrease from October's revised figure of $1,709. That marks the fifth consecutive month of no change or a decline in monthly rent.

All U.S. regions posted declines in rent in November, with the West leading the country with a 0.4% month-over-month decrease, followed by a 0.2% slide in the South and a 0.1% drop in the Northeast. Rents in the Midwest declined 0.01% in November.

On an annual basis, the Midwest posted the strongest performance in the country with 2.2% rent growth, followed by the Northeast at 1.7%. The South's rents declined 0.1% year over year, while those in the West slid 1.5%.

"Mountain West and Sun Belt markets continue to face elevated vacancy amid aggressive new supply, putting downward pressure on rents," the report found. The steepest monthly rent decline occurred in Las Vegas, down 0.8%, followed by Denver and the Texas cities of San Antonio and Austin, which each fell 0.7%. Salt Lake City, Utah; Raleigh, North Carolina; and Portland, Oregon, each posted a monthly decline of 0.6%.

Q4 2024 -> Toll Brothers spent 6.7% of typical final sales price on incentives

Q4 2025 -> Toll Brothers spent 8.0% of typical final sales price on incentives

Historically, their "normal" incentives rate is 5.0% to 6.0%

Gross margin on home sales for the fourth quarter, by year

• Q4 2018 --> 21.40%

• Q4 2019 --> 20.90%

• Q4 2020--> 20.10%

• Q4 2021 --> 23.50%

• Q4 2022 --> 26.90%

• Q4 2023 --> 27.50%

• Q4 2024 --> 26.00%

• Q4 2025 --> 25.50%

• Inventory climbs for the 25th straight month (+12.6% YoY), but growth is slowing, as the plateau in the post-pandemic supply recovery continues.

• Buyer activity remains soft as homes stay on the market longer (+3 days, YoY) and prices ease (-0.4% YoY). The slowdown is most pronounced in the South and West, while many Northeast and Midwest metros still see faster-than-normal sales due to tighter inventory.

• Delistings remain well above seasonal norms and outpace inventory gains, with about 6% of listings coming off the market each month since June. 

• Affordable “refuge markets” stand out nationally, posting some of 2025’s strongest price gains as cost-conscious buyers shift to lower-priced metros.

These metros had the highest delisting-to-new listing ratio in October:

• Miami: 45 (homes delisted per 100 new homes listed), down from 60 in August, but up from 34 in October 2024

• Denver: 39, up from 37 in August and 24 in October 2024

• Houston: 37, down from 40 in August, but up from 31 in October 2024

In November, the national median list price was $415,000, down 0.4% from last year and 2.2% from last month. The price per square foot—a gauge of home value that accounts for the size of homes on the market—fell slightly (down 1% YoY and 1.2% MoM).

Since November 2019, the typical list price has climbed 36.1%, while the price per square foot is up 48.4%. These long-term increases have significantly affected affordability even before the impact of higher mortgage rates is considered. Most of these increases are a holdover from gains during the pandemic era. Since October 2022, the national median list price is down 0.2%, while the price per square foot is up 3.3%—despite a 42.9% increase in inventory and the median home staying on the market for nine days longer.

By region, price cuts remain least prevalent in the inventory-squeezed Northeast:

• Northeast: 12.8% of listings

• Midwest: 18.2%

• South: 19.1%

• West: 18.5%

Realtor.com data shows buyers shifting to “refuge markets,” where homeownership was still financially feasible after years of elevated rates and sticky post-pandemic prices. Mortgage rates surging past 6% in 2022 created a second, amplifying affordability shock on top of the pandemic price boom, pushing buyers to seek out more affordable metros. For many buyers, the only path to affordability was to move “down-market,” toward metros where prices were 20% to 30% below the national median even at the 2022 peak—enough to offset increased financing costs.

The US Federal Reserve is likely to cut rates next week after September’s delayed jobs report showed signs of a weakening labor market. While the outlook for 2026 is less clear, Jan Hatzius, Goldman Sachs Research's chief economist, expects the Fed to slow the pace of easing in the first half of next year as economic growth reaccelerates and inflation cools.

WSJ

Goldman Sachs Research forecasts US economic growth will accelerate to 2-2.5% in 2026, driven by reduced impacts from tariffs, by tax cuts, and by easier financial conditions. Hatzius expects the Fed to pause its cutting cycle in January before delivering cuts in March and June, pushing the funds rate down to a terminal level of 3-3.25% (compared with 3.75% to 4% currently).

That said, the labor market, especially for college-educated workers—who account for an estimated 55-60% of US labor income—shows signs of weakening, according to Hatzius. “A further deterioration in employment opportunities for this key demographic—perhaps reflecting artificial intelligence (AI) and other efficiency-enhancing measures—could have a disproportionate negative impact on consumer spending and prompt further rate cuts over time.”

US factory activity fell in November by the most in four months as orders weakened, indicating manufacturers are struggling to break free from an extended period of malaise.

The Institute for Supply Management’s manufacturing index eased 0.5 point to 48.2, according to data released Monday. The measure has been below 50—which indicates contraction—for nine straight months.

Marketwatch: Holiday spending hit an all-time-high on Black Friday and Cyber Monday — thanks in part to the number of people who used buy-now-pay-later options.

Americans spent $1.03 billion on Cyber Monday alone using buy-now-pay-later services like Klarna, Affirm and PayPal— an all-time high, according to new data from Adobe — and that figure is expected to go even higher. Over the course of the Nov. 1–Dec. 31 holiday shopping season, buy-now-pay-later is expected to facilitate $20.2 billion worth of payments, a year-over-year increase of 11%, per Adobe

Total household debt increased by $197 billion to reach $18.59 trillion in the third quarter, according to the latest Quarterly Report on Household Debt and Credit. Mortgage balances grew by $137 billion and totaled $13.07 trillion at the end of September. The pace of mortgage originations increased, with $512 billion newly originated in the third quarter. Credit card balances rose by $24 billion from the previous quarter and stood at $1.23 trillion, while auto loan balances held steady at $1.66 trillion. HELOC balances rose by $11 billion to $422 billion, and HELOC limits rose by $8 billion, continuing the growth that began in 2022. Student loan balances rose by $15 billion and stood at $1.65 trillion.

American consumers entered the peak of the holiday shopping season offering a basket of mixed signals.

Industry group reports hinted at a positive October for retailers, and the Federal Reserve’s Beige Book suggested that while middle-income households appear to be pulling back, high-income households continued to spend.

Other surveys conducted in November indicated that consumer confidence and sentiment had declined for all income groups. Meanwhile, official retail sales data from the U.S. Census Bureau, delayed due to the federal government shutdown, showed a sluggish September during which inflation-adjusted retail sales fell for the first time since May.

Put together, these anecdotes and delayed data suggest a cautious, not collapsing, consumer. Factors beyond consumer health or confidence, such as the timing of sales promotions and the front-loading of spending earlier in the year to avoid tariff-related price increases, may explain some of the decline.

Our data suggests payroll growth slowed in November, though remained positive year-over-year (YoY). Combined with no acceleration in the rise in unemployment payments into Bank of America customer accounts, the data suggests we remain in “low-hire, low-fire” mode, in our view. We use Bank of America internal deposit data to estimate a payrolls series by looking at how the number of customer accounts receiving a paycheck is changing (see methodology). This data can be fairly noisy, partly due to seasonal variation. It is also possible that the government shutdown impacted the number of paychecks in November, but most federal employees did receive back-pay once the shutdown ended mid-month, so we think the impact should be small.

After-tax wage and salary growth rose across income cohorts in November, with higher-income households at 4.0% YoY, middle-income at 2.3% YoY, and lower-income at just 1.4% YoY.

US companies fired employees or otherwise reduced payrolls last month by the most since early 2023, further accelerating a trend of job losses that’s plagued the Trump administration for much of its second term. Unemployment currently sits at 4.4%.

Private-sector payrolls decreased in November by 32,000, according to ADP Research data released Wednesday. Payrolls have now fallen four times in the last six months. The median estimate in a Bloomberg survey of economists called for a 10,000 gain.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said Nela Richardson, chief economist at ADP and a contributor to Bloomberg Television. “And while November’s slowdown was broad-based, it was led by a pullback among small businesses.”

Companies with fewer than 50 employees shed 120,000 jobs, the largest one-month decline since May 2020. Those with 50 or more employees increased headcount. Until recently, many economists have said the labor market is in a state of low hiring and low firing. But a number of large companies, including Apple and Verizon, recently undertook mass terminations or announced plans to do so, which risks driving unemployment even higher.

The average asking rent at Phoenix retail properties rose 4.9% annually in the third quarter of 2025, the fifth-largest gain in the United States among major retail markets.

Last quarter’s performance narrowly edged out Kansas City’s 4.8% gain and more than doubled the 2.3% increase achieved overall in the United States. It also earned Phoenix the designation as the only market from a Mountain or West Coast state to rank in the top 10.

Grocery giant Kroger plans to step up store openings next year as it closes three of its e-commerce fulfillment centers and shifts order delivery to its brick-and-mortar retail locations.

Next month Kroger plans to shutter a trio of its eight automated e-commerce properties, and it will take a $2.6 billion impairment charge in the third quarter as a result.

The facilities slated to be closed are at 7925 American Way, Groveland, Florida, 375,000 square feet; 9091 88th Ave., Pleasant Prairie, Wisconsin, 330,000 square feet; and 7106 Geoffrey Way, Frederick, Maryland, 717,135 square feet.

Several years ago, with much fanfare, Kroger started opening highly automated centers across the country that use robotics and artificial intelligence to fulfill online grocery orders in a partnership with U.K. tech firm Ocado Group. The goal was to give Kroger a presence in areas where it didn't have stores, such as Florida. But the concept’s execution faced challenges.

“One of the big operational missteps has been with the Ocado partnership to build out automated warehouses,” Neil Saunders, a retail analyst and managing director of analytics firm GlobalData, said Thursday in a note. “In theory this is not a bad idea, but the decisions were predicated on a penetration of online grocery that was overhyped during the pandemic and never materialized. This ultimately means the financial basis of Kroger’s investment was flawed: The volume needed to recoup the capital costs was not there.”

And even though the Ocado model “helped reduce the cost to serve in terms of picking and packing, it never reduced the cost or time to deliver, which in the U.S. can be high because of lower population densities, especially compared to Ocado’s home market of the U.K.,” according to Saunders.

The result “of this poor thinking on Kroger’s part is that the partnership has now been terminated and has, this quarter, created a $2.6 billion impairment charge which has pushed the group to an operating loss of $1.5 billion,” he said.

On the earnings call, Sargent described Kroger’s effort to speed up the expansion of its store footprint.

“We expect to break ground on 14 new stores in the fourth quarter, marking a meaningful acceleration in activity,” he said. “And when you look at 2026, we expect to increase new-store builds by 30%.”

The new Harris Teeter stores are coming to the following locations:

• Jacksonville, Florida, Atlantic Boulevard and Kernan Boulevard North. Construction of the 61,000-square-foot store is expected to start in the spring.

• Clemson, South Carolina, 501 Old Greenville Highway. Construction of the 53,000-square-foot store is set for spring.

• Kannapolis, North Carolina, North Main Steet and Loop Road. Construction is slated for next fall on the 53,000-square-foot store.

• Lake Wylie, South Carolina, WestLake Village, State Highways 55 and 49. Construction is to start this winter on 61,000 square feet.

• Fort Mill, South Carolina, Dobys Bridge Road and Fort Mill Parkway/Catawba Ridge Market. Construction is set for winter on 61,000 square feet.

Bloomberg: New York developers are transforming struggling office buildings into more than 12,000 new apartments in a bid to help offset the city’s worst housing crisis in decades. Most of the units are either starting or completing construction next year and over 3,000 of them will be earmarked as permanently affordable homes, according to a new estimate from the Adams administration which tracks progress on City of Yes — a 2024 zoning overhaul designed to spur housing development. A change in a tax-incentive last year also contributed to the growth.

Real estate developers have already turned iconic towers like Goldman Sachs Group Inc.’s former headquarters and JPMorgan Chase & Co.’s old brick fortress into luxury apartments, helping remake the Financial District into a residential neighborhood after banks moved uptown. There’s been a more recent push into midtown Manhattan, with firms lined up to convert Pfizer Inc.’s former headquarters into more than 1,500 rentals and others overhauling the Archdiocese of New York’s onetime home.

55 Broad: Goldman’s former HQ opened in 2024

SomaNYC: JPM’s old office at 25 Water Street opened for leasing this year

The full list of amenities is impressive

Happy Thanksgiving. I hope everyone enjoys time with family and friends next week celebrating blessings. We’ll be taking a break next week for the holiday.

US small business owners say inflation and access to capital are making operating conditions more difficult, but they remain upbeat about their growth prospects, according to a survey run by Goldman Sachs 10,000 Small Businesses Voices from September 23-October 2.

Amid rising prices and labor costs, 72% of the 1,471 small businesses surveyed say inflationary pressures increased over the past three months. Three-quarters of those who applied for a business loan or line of credit in the last year found it difficult to access affordable capital.

Despite these challenges, a solid majority of the respondents (78%) are optimistic about the trajectory of their business, and 74% have plans to grow their business in the next 12 months. Some 41% plan to create new jobs, slightly more than the 39% who plan to hold employment steady. And a large majority say that artificial intelligence is augmenting, not replacing, their workforces.

91% of small businesses that are currently hiring are finding it difficult to recruit qualified employees. Their top challenges are competition with larger employers on pay and benefits and a lack of qualified workers.

WSJ: Private-sector payroll growth using a 3-month moving average ticked up to 57,000 in September from a cycle low of 16,000 in August.

Using a longer 6-month average, private sector payrolls edged down to 58,000 in September, a new cycle low

US companies shed 2,500 jobs per week on average in the four weeks ended Nov. 1, according to data released Tuesday by ADP Research. Separate data posted by the Labor Department website showed initial applications for jobless benefits totaled 232,000 in the week ended Oct. 18—roughly in line with the level of claims in mid-September.

Meanwhile, Americans have grown increasingly concerned about job security. A Harris Poll for Bloomberg News conducted on Oct. 23-25 showed 55% of employed Americans are worried about losing their job.

Americans with four-year college degrees now comprise a record 25% of total unemployment, underscoring a sharp slowdown in white-collar hiring this year.

There were more than 1.9 million Americans aged 25 and over with at least a bachelor’s degree who were unemployed in September — one in four of the total number of unemployed. Before 2025, the ratio never reached such a high in data going back to 1992. Younger, recent college grads have also been struggling to find work. Rising unemployment among the college-educated “should further fuel AI-related job loss fears,” Michael Feroli, the chief US economist at JPMorgan Chase & Co., said Thursday in a note following the release.

Top performers for the small bay industrial sector include Richmond, Virginia; Tampa, Florida; Nashville, Tennessee; Columbus, Ohio; Salt Lake City, Utah; and Miami, Florida.

All of the markets scored well in terms of increased leasing activity for sub-50,000-square-foot industrial tenants over the past two years, compared to pre-pandemic levels from 2015 to 2019.

In addition, these areas have also outperformed other U.S. markets in terms of rent gains for small bay properties, from the pre-pandemic period to today.

The four variables analyzed were: Leasing activity for sub-50,000-square-foot spaces in the last two years, compared to the pre-pandemic average since 2015, to assess tenant demand performance; Vacancy rate expansion for industrial properties between 10,000 to 100,000 square feet, to quantify how tight the small bay market has remained over the last few years; Inventory growth since 2015 of properties measuring 100,000 square feet or smaller, to assess the ease of building new small bay supply; and rent increases for small bay spaces from pre-pandemic average levels, to average levels seen since 2023, to assess asking rental gains.

DFW’s office market has emerged as a poster child for resilience in 2025. The region’s competitive economic development focus and growing specialization in finance have led to sustained demand even as national trends remain mixed and macroeconomic headwinds prevail.

When isolating non-owner-occupied buildings over 25,000 square feet and excluding medical office, net absorption has topped 1.4 million square feet year to date.

New supply and pre-leasing led to a spike in net absorption in the third quarter. Among owner-occupied move-ins,

• Wells Fargo’s two 425,000-square-foot buildings completed in Las Colinas

• Pre-leasing at 23Springs contributed to roughly 250,000 square feet in net absorption when the building hit the market over the summer

• Overall vacancy rate decreased 30 basis points to 17.7% in the third quarter.

• Segmenting deal size, the share of new leases 50,000 square feet or greater has risen to 14% this year, up from 11% in 2024. Top deals feature Scotiabank, Toyota Financial Services, GEICO, AT&T and PennyMac

Back in April 2025, just 1.0% of U.S. mortgages were underwater, according to ICE Mortgage Technology. As of October 2025, that share has risen to 1.6%. That “underwater” uptick is primarily concentrated in three areas: VA and FHA loans, which typically involve lower down payments. Recent vintages—specifically loans originated in 2023, 2024, and 2025. Housing markets in the Southwest, Southeast, and West, where home prices have seen more notable declines since the Pandemic Housing Boom fizzled out in 2022.

Insurance now accounts for 9% of the typical U.S. homeowner’s payment—the highest share on record, according to Cotality. Several states have seen double-digit premium increases in just the past year. Looking ahead, Cotality expects average annual U.S. homeowner insurance premiums to rise another 8% in 2026, followed by an additional 8% increase in 2027.

64% of new single-family home sales by the 21 largest homebuilders include a 'permanent' buydown right now

Among all other homebuilders it's 13%, according to AEI Housing Center data

After more than 3 years after breaking ground, Hines has resumed the $4 billion Riverwalk 200 acre mixed use development in Mission Valley, San Diego, CA.

Hines secured $380 million in construction financing, comprising a $278 million senior loan from Bank OZK and a $102 million mezzanine loan provided by Related Fund Management, which originated the investment through its Related Real Estate Debt Fund IV.

Riverwalk San Diego is launching at a strategically significant point in the real estate cycle. Following a period marked by uncertainty – driven by remote work and evolving demand patterns – market fundamentals now indicate a renewed appetite for high-quality, integrated communities. According to Hines Research’s “To Buy or to Build?” analysis, early-cycle development, when supported by long-term vision and strong fundamentals, presents a compelling opportunity. Riverwalk reflects this approach, serving as a benchmark for high-quality, sustainable urban development.

Phase one, designed by Gensler, will deliver 721 market-rate multifamily homes, inclusive of apartments and townhomes, across four buildings, a vibrant village green and 75,000 square feet of grocery-anchored retail. Separately, the initial phase includes The Becker—a 190-home affordable housing community in partnership with Wakeland Housing, which is already under construction – and a new trolley station on the MTS Green Line. The station’s timeline has been accelerated from a later phase thanks to a $41.1 million Affordable Housing and Sustainable Communities grant. The completion and grand opening of phase one is slated for spring 2029, with the first homes becoming available in spring 2028.

At full completion, Riverwalk San Diego will deliver:

• 4,300 homes (10% income-qualified affordable)

• 150,000 square feet of retail

• One million square feet of office space

• 110 acres of parks and open space, including a 60-acre regional park Restoration of the San Diego River and extension of the River Trail

• Flood capacity improvements to Fashion Valley Road

Inflation has been rising, sitting now at 3%, and Fed policymakers are stepping up warnings that another cut in December could be a damaging move. Officials broadly agree the labor market has cooled, but are split over whether the slowdown will intensify. And while one group is sanguine about price pressures, others are warning further cuts put years of progress on inflation at risk.

“I do not think further cuts in interest rates will do much to patch over any cracks in the labor market—stresses that more likely than not arise from structural changes in technology and immigration policy,” said Jeffrey Schmid, president and chief executive of the Federal Reserve Bank of Kansas City. “However, cuts could have longer-lasting effects on inflation as our commitment to our 2% objective increasingly comes into question.”

Cass Freight Index slid 2% in October, a sign of an ongoing freight recession. This index includes all domestic freight modes and is derived from $25 billion in freight transactions processed by Cass annually on behalf of its client base of hundreds of large shippers.

Older generations - Baby Boomers and Traditionalists - have shown faster credit and debit card spending growth per household than overall households since 2022, according to Bank of America aggregated card data.

In 2023, the cost-of-living adjustment (COLA) to Social Security retirement benefit incomes was large compared to wage growth, likely helping boost retirees' spending relative to other cohorts.

But COLA increases have been smaller since then and the 2026 COLA announced adjustment of 2.8% is also relatively close to current wage growth. Positive wealth effects from rising equity markets may also be boosting older generations' spending currently. •

Strong growth in older generations' spending is "good news" as they are becoming an ever-larger proportion of the US population. And 2026 is likely to see a wave of retirees as Baby Boomers reach "Peak 65."

Looking at households before and after retirement, we find that "early retirees" have significantly lower deposits and spending than those who retire later. So while we expect that booming equity markets may help provide support to older generations' spending for some time yet, it appears people are increasingly expecting to need to retire later.

As we have noted in the past, older generation spending growth (defined here as Baby Boomers and Traditionalists) per household has been stronger than the overall pace across all generations since 2022, according to Bank of America aggregated credit and debit card data

The divergent spending trends across generations are especially important because the US is experiencing a big demographic shift, as a wave of retirees reshapes the economic landscape. According to Census Bureau population projections, the number of resident Americans (those living, both civilian and Armed Forces, in the United States) turning 65 will peak in 2026, a phenomenon sometimes referred to as “Peak 65”. Between 2025 and 2027, over 4.1 million residents per year are expected to reach this milestone. Moreover, the proportion of US residents aged 65 and older is expected to rise from 17.3% in 2022 to 20.6% by 2030, according to data from the Census Bureau

As this large share of the population transitions from earning income to relying on retirement savings and benefits, how will its spending evolve? This question is increasingly important for both policymakers and businesses adapting their strategies to an aging population. To understand how spending evolves with age, we first analyze the saving and spending patterns of Bank of America households aged 60 to 69 years who receive a regular paycheck deposit into their account but are not yet receiving Social Security retirement benefits. This helps to give us a baseline for how spending changes with age before retirement. Our data reveals a clear trend: as 60+ workers age, their average monthly checking and savings account balances typically rise steadily, while their spending declines. Notably, there is a marked step-up in deposit balances at age 67. In our view, this probably reflects a shift towards more liquid cash savings in anticipation of reduced earnings in retirement as well as lower spending

These findings suggest that as Baby Boomer and Traditionalists age, their spending will tend to decline. This implies that their strong Bank of America card spending relative to other cohorts may gradually slow, unless broader “macro factors, ” such as wealth effects can offset the trend. In our view, the possibility of lower total and discretionary spending and reduced savings in retirement is becoming a key reason why those of retirement age may keep working. According to a Bank of America Proprietary Market Landscape Insights Study, only around 10% of pre-retirement respondents felt confident they would be able to retire early. And around 30% thought they would need to retire later than they would like

The Chicago Fed estimates the unemployment rate increased to 4.36% in October, the highest since October 2021.

The increase reflects slower hiring as well as a higher rate of layoffs, quits, and retirements.

It was also influenced by the government shutdown.

As a result, the unemployment rate has now risen by a full percentage point since May

Americans have started to increasingly worry about their jobs, with some 55% of employed Americans saying they’re concerned. This follows a drumbeat of recent layoffs at big names like Amazon, Target, and Starbucks and the most layoff announcements for any October in more than two decades.

Jay Parsons: Half of the nation's 150 largest metro areas cut rents year-over-year through October.

Most of those are high-supplied markets dealing with the biggest supply wave in a half-century (led by Denver, Austin, Phoenix), but that's not the only factor. We're also seeing rents fall in lower-supplied markets like Washington DC, Los Angeles, Las Vegas and Sacramento, among others.

In those markets, a soft job market and weak consumer confidence are likely culprits. Apartment execs are saying that CURRENT renters are still in good shape (paying rent, renewing leases, maintaining low rent-to-income ratios, etc.) but PROSPECTIVE renters seem to be frozen, in wait-and-see mode.

Worth noting: The slowdown is not universal.

Rents are still rising in half the country, led by low-supply markets like San Francisco (+7.4%), San Jose, New York and Chicago.

And rent momentum did accelerate in a number of MSAs between September and October -- including high-supplied markets like Atlanta, Orlando, San Antonio, Austin and Denver ... where rents are still falling, but to a lesser degree than previously.

In 19 of the 20 MSAs where Class C rents growing >3%, new apartment supply TRAILS the U.S. average.

In 16 of the 17 MSAs where Class C rents FALLING >6%, new apartment SUPPLY exceeds the U.S. average.

Vacancy rates have climbed to 20-year highs in Houston

• Luxury properties lead absorption

• Rebound in three-star properties & developers scaled back on upscale amenities to improve affordability.

• Since 2023, more than 61,000 units have come online

• Aggressive concessions to fill units

• Rent growth turned negative in the second quarter of 2025 for the first time in 15 years and remains in decline

• Asking rents have dropped in high-growth submarkets north and west of Houston, including Bear Creek-Copperfield and Cinco Ranch. Extended the tour-to-lease timeline, with four to six weeks of free rent now common in newly completed complexes.

• Affordable submarkets with limited new supply — such as Alief and Baytown — have emerged as top performers over the past year.

For the first time in modern housing market history, U.S. single-family new construction, in aggregate, is no longer selling at a premium to existing homes. The median sales price of new single-family homes in August 2025 was -0.2% lower than the median sales price of existing single-family homes—an all-time low. That’s a dramatic shift from January 2013, when the typical new home sold for +38.4% more than a comparable existing home, marking the highest premium ever recorded.

This reversal underscores how the post-pandemic housing cycle has reshaped market dynamics. While home prices have experienced some downward pressure—particularly in pandemic-era boomtowns—since mortgage rates peaked in 2022, existing homeowners have largely resisted those declines. That coupled with lock-in has seen existing home turnover fall to multidecade lows. Meanwhile, new-home prices have adjusted more meaningfully from the 2022 peak, aided in part by builder incentives and the construction of smaller, more affordable homes.

Percent of household mortgages 30+ days delinquent

Federal Reserve Chair Jerome Powell was more hawkish than many expected during the central bank’s press conference last week. However Goldman Sachs Research still expects the US central bank to cut rates next month, writes Chief US Economist David Mericle.

Challenger: U.S.-based employers announced 153,074 job cuts in October, up 175% from the 55,597 cuts announced in October 2024. It is up 183% from the 54,064 job cuts announced one month prior, according to a report released Thursday from global outplacement and executive coaching firm Challenger, Gray & Christmas.

“October’s pace of job cutting was much higher than average for the month. Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.

Through October, employers have announced 1,099,500 job cuts, an increase of 65% from the 664,839 announced in the first ten months of last year. It is up 44% from the 761,358 cuts announced in all of 2024. Year-to-date job cuts are at the highest level since 2020 when 2,304,755 cuts were announced through October.

American consumers are not happy campers. Sentiment across the country is close to the lowest it has ever been as rising inflation, rising unemployment, mass firings, a global trade war and now a record-breaking government shutdown have combined to make people less than cheery as the holidays approach.

The preliminary November sentiment index dropped 3.3 points to 50.3, just above a June 2022 reading of 50 that was the weakest in University of Michigan data back to 1978. The gauge was lower than all but one estimate in a Bloomberg survey of economists. A measure of current economic conditions slumped 6.3 points to a record low of 52.3 as anxiety mounted about the impact from the standoff in Washington.

The US economy is becoming a Jenga tower, one economist told Bloomberg, increasingly fueled by the profligate spending of the rich while a growing number of people must choose between car payments and dinner. This dichotomy isn’t new, but recent months are witnessing an even starker divide, one that some experts say makes the economy more susceptible to recession.

The data are sobering: The richest 10% of households are fueling almost half of total US spending thanks in part to the aforementioned stock market frenzy. Meanwhile, lower-income and middle class families are pulling back in the face of tight budgets, higher costs of living and a grim, rising tide of mass firings.

WSJ: This past week also should have been a decent one for bond prices amid selloffs in speculative stocks—a classic “risk-off” rally. Instead, the 10-year Treasury yield hit its highest in nearly a month Wednesday. Some think tariffs contributed to that move too, but for a completely different reason.

The probability of the administration prevailing in a Supreme Court case challenging lower-court rulings that Trump’s tariffs are illegal was as high as 43% last Thursday, according to betting site Polymarket. The odds began to wobble as this Wednesday’s hearing drew nearer and sank as low as 25% that afternoon.

More than $100 billion will have been collected from the specific tariffs being debated by the time a decision is reached. The prospect of at least some being refunded is enough to affect federal borrowing needs. Even without rebates, collections could drop sharply while the White House finds legal workarounds to impose new levies.

It’s ironic: Tariffs initially spooked the bond market. Now that they’re helping to plug revenue lost to tax cuts, their potential absence worries investors.

Tariffs are only the trigger, though. What’s really changed is that budget deficits are unsustainably high and foreigners’ willingness to hold dollar assets no longer seems unlimited.

Bond investors need a new instruction manual.

A succession of high-profile defaults connected to bankruptcies and fraud allegations have raised questions about the health of credit markets. Concerns are centered around the rapid growth of the $1.1 trillion private credit market. In particular, direct lending to small- and medium-sized businesses has grown significantly in the last decade.

The defaults of car parts manufacturer First Brands and auto loans company Tricolor, and concerns linked to commercial real estate firm Cantor Group, have prompted investors to take a closer look at the vulnerabilities of credit markets. Nonetheless, “at this stage, we would still very much come down on the side of these being idiosyncratic events and not credit-type events,” says Spencer Rogers, a credit strategist at Goldman Sachs Research.

In the Seattle metropolitan area, employment fell by 15,000 jobs between August 2024 and August 2025. That amounts to a 0.7% decline over the year. This employment downturn could signal a shift in a region that was starting to see signs of recovery.

Some subsectors have experienced substantial losses. Warehousing employment dropped by 23.5%, or 11,900 jobs, reflecting a sharp pullback in logistics activity. As tech company layoffs have continued throughout 2025, software publishing firms trimmed their workforce by 12%, or 8,200 jobs.

Employment services declined by 11.5%, a loss of 2,800 jobs. Recruiters and contingent workers are often among the first let go when companies tighten their budgets, making this sector a leading indicator of economic stress.

Not all sectors saw declines, though. Healthcare saw the largest numerical gain among subsectors, with 5,200 new jobs, a 3.1% increase. Accommodation and food services grew by 2,800 jobs, representing a 2.4% increase in employment. Private education services gained 2,300 jobs, representing a 7.4% increase in employment. Arts, entertainment and recreation also posted a gain of 2,300 jobs, a 6.6% increase for that subsector.

These shifts carry implications for commercial real estate. Job losses in sectors that heavily rely on offices could weigh on office demand, even as companies implement strong return-to-office mandates. Meanwhile, the steep decline in warehousing employment suggests a slowdown in logistics activity, which could temper absorption in industrial properties.

Cold storage space remains in high demand nationwide, but steep costs and complex development requirements have slowed new projects in most markets. Dallas-Fort Worth has been an exception, thanks to steady population growth and rising consumer demand for food and perishables.

Over the past decade, North Texas added about 6.6 million square feet of cold storage space. For perspective, the entire United States added 49.8 million square feet during that time, making the region responsible for nearly 13% of national growth.

Despite this surge, the region’s share of the overall cold storage market remains modest. With 19.1 million square feet of total space, Dallas-Fort Worth accounts for just 5.9% of the U.S. market, roughly in line with its share of the broader industrial sector.

New projects are clustering along major trade routes, typically just outside the urban core where land is more affordable yet still close to population centers. Most construction has concentrated in Dallas and Fort Worth proper, with additional activity in Denton and other outlying areas. One key hotspot is the point where Interstate 35 splits into its eastern and western sections before reconnecting farther south in Hillsboro.

Among the notable developments is Chill Development DFW, a 302,000-square-foot facility designed for freezer capability featuring 50-foot clear heights and convenient highway access. Walmart has also made a significant investment with its 735,000-square-foot distribution center for perishables in Lancaster, part of the retailer’s broader effort to expand and streamline its frozen goods supply chain. Another major project, Cold Summit Dallas II, brought 365,000 square feet of cold storage space to the region and stands as one of the last large-scale industrial construction projects in Southeast Dallas in 2025. Rounding out recent activity is Performance Food Group’s 343,000-square-foot building at GSW Logistics Crossing, which wrapped up construction in May.

WSJ: America’s biggest builders are struggling to sell homes even when they offer buyers a 4% mortgage. Their experience suggests rate cuts alone won’t be enough to boost weak sales in the wider housing market.

The number of completed but unsold new homes has reached levels last seen in the summer of 2009, data from the Federal Reserve Bank of St. Louis shows. At the end of last year, builders were confident that sales would recover in 2025 and built tens of thousands of units to have enough supply for the spring-buying season. But demand didn’t pick up, and more homes sat unsold. They have tried to use sweeteners to shift inventory.

D.R. Horton, which builds roughly one in every seven new homes in the U.S. and has its own financing arm, is offering 3.99% mortgages to buyers. The company has also knocked 3% off its average selling price over the past 12 months and expects to cut prices further in its 2026 fiscal year, which runs through September. America’s second-largest builder, Lennar, said it offered buyers incentives worth $64,000 on its average home sale last quarter to meet its sales target. A combination of subsidized mortgages and price cuts on offer from Lennar was equivalent to a 14.3% price reduction. The last time it had to offer home buyers such a deep discount was during the global financial crisis.

Profit margins have taken a hit from the rising cost of these incentives, so builders have decided to slow construction and wait for demand to recover. D.R. Horton only started building 14,600 homes over the three months through September, down 21% from its pace a year ago. Sales of new homes are roughly a fifth of all U.S. housing transactions, so they aren’t the full picture. But they can give a more revealing read of underlying demand than the resale market in parts of the country. Builders have to price homes in line with demand if they want to sell finished inventory.

Layoffs announced recently, these are not just US based jobs, but globally where relevant:

• UPS: 48,000

• Amazon: 14,000-30,000

• Intel: 24,000

• Nestle: 16,000

• Accenture: 11,000

• Oracle: 11,000

• Ford: 11,000

• Novo Nordisk: 9,000

• Chevron: 6,000-8,000

• Microsoft: 9,000

• PwC: 5,600

• Salesforce: 4,000

• Lufthansa: 4,000

• Meta: 3,600

• ConocoPhillips: 2,600-3,250

• Paramount: 2,000

• Target: 1000-1,800

• Sika: 1,500

• Kroger: 1,000

• Block: 1000

• Applied Materials: 1,444

• 100s: Starbucks, GM, Google, xAI, Rivian, NASA, Cargill

For the four weeks ending Oct. 11, 2025, the NER pulse shows that private employers added an average of 14,250 jobs per week.

This growth in employment suggests that the U.S. economy is emerging from its recent trough of job losses. Hiring has begun to increase from September levels, albeit slowly and without the positive momentum we saw earlier in the year. This tepid recovery could support economic growth, however, because our run of week-over-week job losses seems to have been relatively short-lived.

WSJ: The Federal Reserve cut interest rates by a quarter point, but the Dow industrials turned lower after Fed Chair Jerome Powell said there was vigorous debate at the central bank about another cut.

"A further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it," Powell said. "Policy is not on a pre-set course."

The Fed's rate decision drew dissents on both sides, one pushing for rates to be cut further, the other calling for them to remain higher.

Millennials are embracing alternative investments such as real estate and private equity more than other generations, according to a Goldman Sachs Asset Management survey.

Millennials allocate an estimated 20% of their assets to alternatives compared to about 11% or less for other generations, according to the survey of 1,000 US-based high-net-worth individuals with at least $1 million in investable assets. The survey was published in Asset & Wealth Management’s report “Opening the Door to Alternatives.”

The “new alts generation,” as the report calls them, are also less exposed to the stock market than their parents, with just 27% of their portfolios committed to public equities, compared to 48% for baby boomers.

In late 2021, as the housing market overheated and the Federal Reserve’s benchmark interest rate hovered near zero, Tony Yang found an unconventional way to fund his down payment.

He logged into his Charles Schwab brokerage account, built a trade he’d discovered on Reddit — and unlocked about $650,000 to help finance a Bay Area home.

The trade, a “box spread,”. By combining two opposing options positions — one bullish, one bearish — Yang built a strategy that mimics a fixed-rate loan: upfront cash now, repayment at a set date, and a locked-in cost in between. Yang used it to borrow at just 1.6% for five years — well below the rate on his traditional mortgage — creating a down payment without having to sell assets he wanted to keep in the market. “Borrowing against it keeps me in the market and avoids capital gains tax.” Now, that same strategy powers SyntheticFi, a San Francisco-based fintech Yang co-founded to help others do the same. Box spread loans, also called synthetic borrowing, aren’t accessible to every buyer. They require sizable portfolios to back them. But for those with the assets, they offer speed, flexibility, and often a lower cost than traditional bank credit — plus potential tax advantages.

Once a tool for hedge funds and family offices, box-spread loans now sit alongside direct indexing, custom portfolios, and options overlays — all pitched as tax-efficient ways to gain financial control. For affluent investors, they’re a means to stay invested, defer taxes, and unlock liquidity without touching traditional lenders.

Insurers have increased rates significantly for next year — an average of about 30 percent for a typical plan in the 30 states where the federal government manages markets, and an average of 17 percent in states that run their own markets, according to a new analysis from KFF, the health research group.

But the biggest impact for nearly all Americans covered by Obamacare plans will occur with the expiration of generous subsidies at the end of the year unless Congress extends them. Prices on the government’s website reflect that change using calculations based on a return to the lower subsidy levels offered before 2021. The extra funding helped make insurance effectively free for poorer Americans and offered financial help for the first time for people earning more than four times the federal poverty level, or about $64,000 for a single person. If the funding expires, costs will go up for more than 20 million Americans who currently buy their own insurance in the marketplaces established under the Affordable Care Act. Most customers will still qualify for federal help, but at a lower level established under the original program.

KFF: 22 million out of 24 million marketplace enrollees currently receive a tax credit. The amount subsidized enrollees pay is not what insurers charge, but rather a sliding-scale share of their household income, based on a formula set by Congress. If Congress extends the enhanced tax credits, the amount subsidized enrollees pay each month will remain about the same, even though the amount insurers are charging is increasing sharply.

The average cost of a family’s annual health insurance premium has jumped +6% YoY in 2025, to nearly $27,000, an all-time high.

This marks the 3rd consecutive annual increase, following 2023 and 2024 gains of +7%.

Since 2000, the average health insurance premium has surged +350%.

Small businesses are seeing the largest health-rate increases, with over half reporting +10% or more premium hikes in 2025.

US childcare costs are rising 1.5 times faster than overall inflation, up 5.2% year-over-year (YoY) in September. This could be why the number of households making monthly childcare payments has declined, with the year-over-year percent increase in the number of households paying for child care down 1.6% YoY September, despite the average monthly payment up 3.6% YoY, according to Bank of America payments data.

Regional disparities in childcare costs are widening. While the national average monthly childcare payment rose, some areas saw sharper increases - New England was up 6.6% and the West North Central division surged 8.2% YoY as of September. In the South, Nashville led major cities with a more than 6% increase from 2024 averages.

These spiraling costs mean some parents, especially women, are quitting work or cutting their hours to become caregivers. Bank of America data shows a drop in households receiving multiple paychecks while making childcare payments, especially among lower-income households, which suggests to us an increasing trend of some earners dropping out of the labor force to take on childcare responsibilities.

A prolonged slowdown in US housing supply has made it increasingly difficult to afford a home, according to Goldman Sachs Research. Restrictive land use regulations are the most important housing market obstacle, and addressing these constraints could significantly close the gap in supply.

The muted housing growth since the Global Financial Crisis in 2007-09 can be seen in the sharp decline in the share of homes available for sale or rent, Goldman Sachs Research economists Elsie Peng and Pierfrancesco Mei write in a report. Today, both rental and homeowner vacancy rates—the share of total housing stock available for rent and sale respectively—are below those seen in the two decades preceding the crisis and the housing market collapse that triggered it.

At least 3-4 million additional homes beyond normal construction need to be built to address the shortage in US housing supply and boost affordability, according to Goldman Sachs Research.

Land use restrictions are the biggest constraint on the growth of housing supply, and tackling that issue could help to significantly move the market back into balance.

Rents and mortgage payments are taking a bigger chunk of income, according to multiple measures, and the trend accelerated post-pandemic.

The home price-to-income ratio, for example, has surpassed the peak it reached in the 2000s housing boom, according to Goldman Sachs Research. Mortgage rates surged to a 20-year high in 2022 and have stayed elevated since. The average monthly mortgage payment as a share of potential home buyers’ income has risen from below 20% prior to the pandemic to a historically high ratio of over 30% since 2022. Affordability is less of a problem in the rental market, but still, the rent-to-income ratio of today is at its highest level since 1980, Peng and Mei note.

Our economists looked at what it would take to restore price-to-income and rent-to-income ratios back to levels seen in the 1990s. They also assessed what would be needed to get vacancy rates back to where they were in that period.

Their analysis suggests that fixing the shortage and restoring affordability will require the addition of around 3-4 million housing units. That’s equal to about 2% to 2.6% of the current housing stock. Researchers elsewhere have estimated that the US housing shortfall is between 1.5 million and 5.5 million units, or as much as 3.7% of today’s supply of homes.

Height restrictions hold construction to a maximum of about two or three stories on around 60% of residential land in the 240 largest US metropolitan areas. That’s similar to the height of a single-family home. Buildings are allowed to rise to five stories or more on just 7% of all residential land. There are also regulations affecting minimum lot size and open space, and rules about the maximum number of households allowed in a building.

“The fragmentation of US land use policies has made large-scale reforms particularly challenging to implement,” Peng and Mei write.

The economists simulated how housing production might respond if regulations in major metropolitan areas were reduced to match the rules that prevail in the 25% of cities with the least stringent land use restrictions. The analysis shows that around 2.5 million more housing units would be added in the next decade under this scenario. This would eliminate about two-thirds of the estimated housing shortage, the researchers find.

There are other constraints beyond zoning and land use rules. There has been a steady decline in land available for housing near city centers. The share of land that is both vacant and available for development has decreased from more than 70% at the start of the 1960s to about 40% today.

Another drag on housing supply is declining productivity and a shortage of skilled labor in construction. Productivity in the housing industry has been trending lower for decades. While this is partly explained by costs related to land-use rules and land availability, it’s also likely driven by slower technology investment in construction and increased barriers for new homebuilders to enter the market, Peng and Mei write.

As a result, it takes longer than ever to complete housing construction. Average completion times have recently touched all-time highs for both single family homes and multifamily projects.

While both nationally and in Houston leasing volume has slowed from the post-pandemic highs, in Houston's North Freeway-Tomball Parkway area, leasing volume has already reached nearly 4 million square feet this year, marking the strongest annual performance on record and over 65% above the 2017–2019 average.

Tenants tied to logistics and tenants remain active, often targeting brand-new properties. In one of the largest leases this year, Panelmatic signed for an entire 730,000-square-foot warehouse in WestPoint 45. The property was built earlier this year.

While the broader Houston metro has seen a slowdown in new construction — driven by high borrowing and building costs — select segments like WestPoint 45, Southwest Far and South Highway 35 have defied the trend, launching large speculative projects in recent quarters. A common thread among these areas is their proximity to Beltway 8, Houston's 88-mile loop.

The North Freeway-Tomball Parkway area is strategically located near some of Houston's fastest-growing residential areas and is intersected by key transportation corridors. At its core is the 970-acre Pinto Business Park, situated at Beltway 8 and I-45 — the largest fully entitled, contiguous tract of land within Beltway 8. Major multinational companies anchor the park, reinforcing its role as a premier industrial hub. Notable tenants include Coca-Cola, which occupies a 1 million-square-foot build-to-suit facility, and Amazon, with over 850,000 square feet.

One standout project is Vivagi's 730,000-square-foot WestPoint 45 distribution center, completed in March. Built on spec, the property was fully leased within four months to an undisclosed tenant. With 40-foot clear heights, it ranks among the tallest in the area.

This part of Houston has benefited significantly from Houston's outward population expansion. Developers across building classes have followed suit, drawn by the area's connectivity via I-45, Grand Parkway and Beltway 8 to the northern and western suburbs — where much of the growth is concentrated. Over the past 10 years, the segment's industrial inventory has nearly doubled. The average building age is around 20 years, notably younger than the urban core, where buildings in the downtown-NW Inner Loop average over 50 years old.

Irvine Co. sold One America Plaza, San Diego’s tallest skyscraper, in a $120 million deal marking its sixth office tower sale of the past year and its exit from the struggling downtown market at a 60% discount to what they paid for it in 2006- ~300M

Newport Beach, California-based Irvine Co., among the state’s largest owners of commercial real estate, sold the 34-story tower built in 1992 at 600 W. Broadway, according to public filings. The buyer was Saca Development of Sacramento, which last year bought another nearby downtown tower from Irvine Co. for $44 million.

It has also acquired and developed properties in recent years in markets like Chicago and New York. At UTC, about 10 miles north of downtown San Diego, Irvine Co. owns nearly half of the existing office inventory and recently announced plans to redevelop some of its older buildings in that enclave to include apartments and other non-office elements.

Like many U.S. urban hubs with older office buildings, downtown San Diego has been struggling with rising vacancies -downtown San Diego office vacancy at 34.5%.