Hello Brick Brief readers, 

Happy Friday. Today we’re seeing softer-than-expected November inflation tied to data quality issues, a weak November housing market, and industrial demand shifting toward e-commerce.

🧱 Inflation Signal Looks Softer Than Reality
The BLS reported November CPI at ~2.7% YoY, but the data likely understated the true pace of inflation, as a shutdown forced workarounds that reused stale rent data and mechanically pulled down shelter, which makes up roughly one third of the index. Economists at BNP Paribas, Citi, Pantheon, and Wells Fargo projected November inflation closer to 3.1% YoY, arguing tariff pass through lifted goods prices and kept inflation pressure elevated.

🏡 Housing Stalls Despite Better Affordability
Housing demand remained soft in November even as affordability improved; new listings fell about 30% MoM and pending sales dropped 5.8% YoY, as both sellers and buyers pulled back. Homebuilder KB Home reported its average selling price fell to $465,600 from $501,000 YoY and said it expects housing conditions to remain soft into 2026.

🏭 Industrial Tilts Toward E-commerce And Last Mile
Industrial demand tilted toward e-commerce, as fulfillment traffic jumped 6.6% YoY while manufacturing facility visits fell 3.5% YoY in November. In last-mile logistics, the USPS is accelerating that shift by opening bids for more than 18,000 delivery units to outside shippers, which should intensify competition and lower delivery costs across e-commerce networks.

US inflation cools to ~2.7% in November but data quality raises doubts -- Government shutdown forced BLS workarounds that likely understated shelter and other prices, leaving economists wary of reading the CPI drop at face value (Bloomberg, WSJ)

Carry-forward “no change” imputation during the shutdown reused stale rent data for October, effectively assuming zero housing inflation and mechanically pulling shelter CPI lower. Because housing makes up about a third of CPI, that distortion likely made November inflation look softer than it really was.

US consumer prices seen rising 3.1% YoY in November, the fastest in 18 months -- Economists at BNP Paribas, Citi, Pantheon Macroeconomics, and Wells Fargo say tariff pass-through is lifting goods prices (Reuters)

US weekly jobless claims fall to 224,000 as labor market holds steady -- Claims reversed last week’s surge despite holiday volatility, reinforcing no-hire no-fire backdrop (Reuters)

Fed’s Goolsbee welcomes soft November CPI but urges patience on rate cuts -- Chicago Fed president says inflation must show sustained progress before easing further (Reuters)

Democrats seek ethics probe of Commerce Secretary Howard Lutnick over AI data center push - Lawmakers say his family’s Cantor Fitzgerald and Newmark ties could benefit (Bloomberg)

Apollo expands asset-level climate risk reviews as extreme weather hits valuations -- The firm is baking flood, wildfire, heat and power risks into every deal including data centers as insured losses hit $107B in 2025 (Bloomberg)

November CPI drop likely distorted by housing data gaps -- Shutdown forced BLS to carry forward rents and owners’ equivalent rent, risking months of skewed shelter inflation in the index (WSJ)

Home sellers step back as affordability hits a three-year high - New listings fell ~30% MoM in November as mortgage payments dropped to 32.6% of income and price cuts normalized near 21% (Zillow)

Pending home sales fall 6% in biggest drop in nearly a year - U.S. pendings sank 5.8% YoY in mid-December as mortgage rates stayed above 6%, days to contract stretched to 52, and sellers pulled back on new listings (Redfin)

Fannie and Freddie boost mortgage holdings to push rates lower - The GSEs grew retained portfolios over 25% to a combined $234B, tightening MBS supply and helping pull 30-year mortgage rates down from 2025 highs (Homes.com)

Concessions will stay central in multifamily leasing in 2026 - Apartments.com expects rent growth to inch up to ~1.9% by end-2026 while vacancy stays above 10%, keeping concessions above 30% of units as landlords compete for occupancy (GlobeSt)

2025 renters still struggle even as rents cool - Zumper finds 1- and 2-bed rents fell this year, yet 59% of renters spend over a third of income on housing and many carry credit card and student debt (GlobeSt)

Multifamily loan spreads hold near low 140s as vacancy hits record 7.2% -- Trepp says supply is outpacing demand nationwide even as rents dipped 1.0% MoM and lenders keep pricing steady for low-leverage deals (Trepp)

San Francisco office leasing tops 8.4M SF in 2025 amid AI boom – JLL says activity has already surpassed last year’s total and is on track to exceed 9M SF as AI and crypto firms drive demand in Q4 (CommercialObserver)

Law firm Thompson Coburn renews 46K SF at 488 Madison Avenue in Manhattan, NY – The Feil Organization re-signed the tenant to a 15-year deal that lifts the St. Patrick’s-facing tower to over 90% leased (CommercialObserver)

E-commerce strength outpaces manufacturing weakness in November - Manufacturing facility traffic fell 3.5% YoY in November while e-commerce fulfillment visits jumped 6.6% YoY (Placerai)

USPS broadens access to last-mile delivery network - The Postal Service will open bids for more than 18,000 delivery destination units to retailers and logistics firms, aiming to cut shipper costs and intensify competition across last-mile logistics (GlobeSt)

Fermi denies Amazon was prospective tenant in stalled Texas data center project -- Company rejects report after a mystery tenant ended a funding deal last week, which sent shares down 34% (Reuters)

KB Home shares fell ~5% after hours after Q4 earnings showed lower profits and deliveries despite a slight revenue beat, with average selling prices falling to $465,600 from $501,000 YoY as affordability pressures and elevated mortgage rates continued to weigh on buyer demand and new orders. The homebuilder provided cautious 2026 guidance that points to a still-soft housing market (WSJ)

Morgan Stanley leads $1.28B junk-bond raise for Google-backed Texas data center – TeraWulf and Fluidstack’s 240 MW Abernathy project will be financed with five-year senior secured notes yielding ~7.25% (Bloomberg)

Pershing Square backs Howard Hughes’ $2.1B specialty insurer Vantage acquisition – Bill Ackman’s fund will invest up to $1B in non-voting preferred shares to support the deal and manage Vantage’s $2.8B portfolio as HHH pivots toward a Berkshire-style model (Bloomberg)

Howard Hughes follows the master-planned community model, where a developer buys a massive tract of land and slowly turns raw acreage into housing, retail, and jobs - value is driven by decades of buildout and urbanization rather than quick flips. By intentionally pacing land sales and development to avoid oversupplying each submarket, growth looks slow to public markets, which often leaves HHH trading below NAV despite steady long-term land compounding.

Ackman wants to turn HHH into a Berkshire-style conglomerate that owns both the MPC land engine and an insurance business, where policyholder premiums create low-cost, long-duration “float” that can be invested in equities and control positions while claims get paid over time. The bet hinges on whether Ackman can keep picking winning stocks and turn that float into sustained outperformance.

Senators urge antitrust probe of Compass-Anywhere $1.6B merger – Lawmakers warn the deal could entrench concentration as the top 10% of brokerages already control 42% of U.S. sales (Inman)