• Executive order limits federally backed financing for large institutional buyers of single-family homes, reshaping exit liquidity in select markets
• Purpose-built build-to-rent communities receive a carve-out, preserving financing pathways for dedicated rental developments
• Threshold for “large institutional” buyers to be defined within 30 days, potentially below the traditional 1,000-unit mark
• Reduced institutional participation could slow rental supply growth in Sun Belt markets like Atlanta, Charlotte, and Tampa
• Mortgage rates rebounded above 6.2%, closing the brief sub-6% window as bond volatility and inflation concerns resurfaced
• Mortgage spreads have largely normalized, meaning further rate relief now depends on Treasury yields falling
• Builder sentiment dropped back to 37, with price cuts and incentives remaining widespread to move inventory
• Aggressive builder pricing continues to pressure resale comps in construction-heavy metros such as Phoenix, Austin, and Charlotte
• DSCR lenders expanding flexibility as competition increases, including acceptance of crypto assets for reserve requirements
• Crypto-based reserves face strict caps and haircuts, signaling innovation but continued underwriting conservatism

• Mortgage rates dipped to 6.04%, the lowest since mid-October, tracking a pullback in the 10-year Treasury rather than Fed policy
• Mortgage spreads compressed to 1.4–1.5%, below historical norms, limiting downside unless Treasury yields fall further
• Rates now sit below the 2024 average, but normalization in spreads could cap further declines even with stable bonds
• NAHB builder sentiment rose to 47, the highest since April, signaling stabilization but not a return to expansion
• Regional builder data shows the South and West under the most pressure, reflecting oversupply risk and affordability constraints
• Existing home sales fell to a 4.09M annualized pace, marking the weakest two-year stretch since the mid-1990s outside COVID
• Inventory remains the binding constraint at just 3.3 months of supply, suppressing transaction volume despite demand
• Proposal to restrict institutional SFR purchases introduces new political risk, likely targeting large firms rather than small landlords
• Reduced institutional participation could ease competition for acquisitions but also impact liquidity and lending appetite
• MBA purchase applications down 13% YoY, signaling buyer demand remains soft heading into what is typically the spring ramp

• Existing-home sales jumped 5.1% in December to the strongest pace in nearly three years, signaling materially improved exit liquidity for flips and BRRRRs
• Inventory tightened sharply to just 3.3 months of supply, setting up tougher acquisition competition before spring listings arrive
• Mortgage applications surged 28.5% after a brief dip to 5.99%, confirming extreme rate sensitivity among buyers and refinance borrowers
• Refinance demand up 128% year-over-year; sub-6% rates triggered immediate borrower action despite the window closing quickly
• Foreclosure filings rose 14% in 2025, with Florida and Texas emerging as key distressed-inventory markets to watch
• Rising bank repossessions point to potential REO growth over the next 12 months, favoring cash buyers and fast-close investors
• Building material costs continue climbing, driven by metals, labor, and tariffs, pressuring flip and ground-up construction margins
• Builder incentives at post-COVID highs reflect affordability strain rather than falling construction costs
• Potential California single-stair reform could unlock new small multifamily projects, with early-adopter cities setting the template

• Political pressure escalating on the Fed as Chair Powell faces DOJ subpoenas, adding uncertainty to rate forecasting
• Administration directs Fannie Mae and Freddie Mac to purchase $200B in MBS, compressing mortgage spreads and helping keep rates near 6%
• Mortgage rates materially lower than the 7%+ environment, but volatility argues for cautious rate-lock timing
• Housing permits down over 21% YoY, with multifamily starts especially weak, reinforcing long-term supply constraints
• Lenders formally allowed to underwrite based on citizenship status; non-citizen investors need lender alignment
• Anywhere–Compass merger creates the nation’s largest brokerage, potentially reshaping agent dynamics and deal flow
• Unemployment claims and consumer sentiment softening, early signals to monitor for downstream impacts on rents and demand

- Relatively lower rates entering 2026

- Fairly stable transaction volume

- Sticky inventory

- Builders starting less projects, Builders Confidence Index still in conctraction range. Large scale price cutting of existing home builder inventory.

- HUD increases eligibility checks for FHA appraisers. If you have an FHA buyer, make sure the appraisers aren't delayed by this.

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