Hello Brick Brief readers, 

Thank you for your continued support! Today we’re seeing Home Depot forecast a sluggish 2026 housing market, construction face headwinds from tariffs, and CRE deal volume slip into contraction for the first time in almost two years.

🏡 Home Depot Expects a Sluggish 2026 Housing Market
Home Depot expects a slow housing environment in 2026 because high rates and strained affordability continue to restrain big ticket spending even as mortgage rates drift lower. The resale market remains frozen as locked in homeowners with low mortgage rates avoid transactions; moving would raise typical monthly payments by over 70%.

🏗️ Construction Activity Faces Ongoing Pressure
Developers face mounting project risk as tariffs drove a 41% jump in construction abandonments and pushed ConstructConnect’s stress index up 19.9% in November. Cushman and Wakefield expects construction costs to keep rising in 2026 as labor shortages, higher wages and elevated materials continue to limit how fast new activity can grow.

🏢 CRE Deal Volume Slips Into Contraction
CRE deal volume turned negative YoY for the first time in almost two years as buyers and sellers remained far apart on pricing and momentum slowed. October deal volume still tallied $24.4B and landed at roughly 70% of October 2019 sales.

Fed expected to deliver a third rate cut today – Lingering inflation and a divided committee make additional moves unlikely as policymakers approach a neutral level and wait for delayed economic data (Bloomberg)

Trump signals he will judge the next Fed chair by an immediate rate cut – He told Politico a quick move to lower borrowing costs is a “litmus test” for his pick (Bloomberg)

Tariffs drive a 41% jump in construction project abandonments – ConstructConnect’s stress index rose 19.9% in November as rising costs pushed developers to cancel projects even as data center and manufacturing megaprojects continued to break ground (Bisnow)

U.S. construction costs are expected to keep rising in 2026 - Lower rates and clearer tariffs should support more projects, but labor shortages, higher wages and still-elevated material costs will limit how fast activity can grow (CushmanWakefield)

Commercial real estate deal volume turns negative YoY for the first time in nearly two years – October sales fell into contraction as high rates and buyer–seller standoffs slowed momentum despite $24.4B in activity (CNBC)

FTC launches rulemaking to regulate rental housing fees – The agency plans new rules requiring landlords to advertise total monthly rent upfront and eliminate deceptive mandatory charges (Bisnow)

FDIC’s 2025 Call Report revisions change how banks classify CRE credit risk – The new system increases short-term visibility of modified loans but ultimately boosts liquidity as performing credits exit modification status after 12 months (CushmanWakefield)

Home Depot says housing pressures will persist in 2026 – The retailer forecasts flat to 2% comparable sales growth as high rates and cautious consumers continue to restrain big-ticket spending (Bloomberg)

Insight: A few weeks ago, in its Q3 earnings report, Lowe’s described a financially healthy homeowner who was becoming more hesitant as uncertainty around tariffs, the shutdown and broader economic news slowed project activity. Home Depot’s forecast today is more pessimistic and points to a structural slowdown as high rates and strained affordability keep housing activity muted through 2026 with no clear catalyst for a rebound.

A few days ago, Zillow and Realtor.com added another data point with 2026 forecasts that expect only a gentle thaw as modest price growth, slightly lower rates and easing payment burdens gradually improve mobility for buyers and renters. Taken together, the signals point to more activity next year but not a full housing recovery, with improvement likely to come in measured steps rather than a sharp rebound.

Locked-in homeowners face steep mortgage payment jumps if they move – Typical payments would rise 73.2% to buy today, with the biggest gaps in high-cost coastal metros and the smallest gaps in affordable Midwest markets (Realtor.com)

Michael Burry says GSEs Fannie Mae and Freddie Mac could see strong post-IPO gains – The big short investor disclosed large positions and expects valuations to rise if capital rules ease and the government eliminates senior preferred shares (HousingWire)

Columbus, OH housing affordability erodes as major employers expand – Job growth from Anduril, Amgen and JPMorgan is lifting demand and pushing home prices higher, weakening the city’s long-standing value appeal (WSJ)

Office pricing shows early signs of stabilizing in 2025 – Deeply discounted trades accelerated transaction volume; Trepp reports office values rising 5.38% YoY as rate cuts and renewed leasing begin to slow the sector’s multiyear decline (Bisnow)

Bjarke Ingels Group renews 50K SF at 45 Main Street in Brooklyn, NY – Two Trees Management kept the architecture firm in its ninth-floor Dumbo space, marking the largest lease in the submarket this year (CommercialObserver)

U.S. self-storage sales jump 62% YoY to $1.6B in Q3 2025 – Transaction volume hit 260 properties and 18.4M SF as REITs, Sunbelt markets, and NYC led a rebound in buyer activity (ConnectCRE)

Lululemon sees strong holiday momentum – Foot traffic rose 9.5% YoY in October and Black Friday visits surged 350.8% above the chain’s Jan–Sept daily average (Placerai)

South Korea’s SK Hynix, a major memory supplier for data centers, weighs a New York listing – The chipmaker is reviewing an ADR offering to narrow its valuation gap with US peers and attract more passive fund capital (Bloomberg)

Argo boosts its data center bet as Apollo’s pending acquisition advances – Argo, which agreed to be acquired by Apollo earlier this year, is taking a larger stake in data center operator TierPoint amid rising AI-driven colocation demand (Bloomberg)

Blue Owl commits $2.5B to Point’s shared-appreciation home equity deals – The capital will support up to $10B in originations over three years as investors back alternatives to HELOCs that give homeowners cash upfront in exchange for future appreciation (Bloomberg)

In shared home-appreciation deals, instead of borrowing against their home, owners receive cash upfront and agree to share a portion of future price gains when they sell or refinance. The structure functions as an alternative to a HELOC for people who need liquidity today but cannot comfortably add another monthly payment.

Stream Realty Partners secures a $228.2M refinance for office and retail campus The Quad in Dallas, TX – KKR provided the five-year senior loan that replaces a prior $181M construction loan for the redevelopment (TheRealDeal)

RJ Capital secures an $84M refinance for 170-unit Trylon Tower mixed-use development at 98-81 Queens Boulevard in Rego Park, NY – Benefit Street Partners provided the loan for the property, which opened in March (TheRealDeal)

Homebuilder Toll Brothers’ multifamily development business sale price rises by $33M to $380M – Kennedy Wilson increased its offer after additional investment boosted the value of the Apartment Living platform (Bisnow)

Pacific Urban Investors buys 285-unit Park Place at Van Dorn in Alexandria, VA for $114M – CIM Group sold the property at 6001 Archstone Way for $400K per unit after owning the property since 2003 (CommercialObserver)

Core Asset Management buys 175K SF Jacaranda Plaza shopping center in Plantation, FL for $53M – Epic Real Estate Partners and Heitman sold the Publix-anchored property at 8101 West Sunrise Boulevard, which last traded for $29.3M in 2016 (CommercialObserver)

U.S. mortgage delinquencies hold at 3% in September 2025 – Rising foreclosure and serious-delinquency rates still point to growing borrower stress beneath the surface (HousingWire)

Proptech funding in 2025 gravitates to multifamily and fintech – Investors favored tools that streamline leasing, operations and underwriting, while office-focused solutions lagged and overall VC funding slipped to an estimated $16.5B (CommercialObserver)

Diald AI raises $3.75M to scale its due diligence platform – The underwriting tool scans 1.7M data sources to condense weeks of CRE analysis into hours; new capital will support expansion in the U.S. and Japan (CommercialObserver)