The Brick Breakdown

📉 Tariffs reshape global trade and add inflation risk

New U.S. tariffs set to take effect April 5 include a 10 percent baseline on all imports, with higher rates for China (34%), the EU (20%), and Japan (24%), while auto tariffs begin tonight. Canada and Mexico avoided reciprocal tariffs but still face 25% duties on many goods, raising the risk of global trade retaliation and cost increases that could complicate the Fed’s timeline for cutting rates.

🏠 Affordability pressures shift homebuyer landscape

The typical U.S. home now requires $117,000 in income, up nearly 50 percent since 2020, sidelining many buyers and shifting market power to older, cash-rich boomers. Luxury home furnishings retailer RH plunged 26 percent after hours following a major Q4 earnings miss and warned of the worst housing market in 50 years, citing high rates, weak demand, and rising tariff-related uncertainty.

🧾 LA’s mansion tax chills development and revenue

A year after Los Angeles implemented its mansion tax, luxury home sales dropped 50% and multifamily permit applications fell nearly 60% according to UCLA and California Homebuilding Foundation data. The measure has raised only $288 million per year, falling short of projections and highlighting the unintended consequences of policies that overlook supply and demand reactions.

This Week in Real Estate: Key Events & Data

Quick Markets

Markets tumbled as Trump’s sweeping new tariffs, including a 10% baseline on all imports and steep country-specific hikes, signaled a sharp policy shift that raises inflation risks and complicates the Fed’s path forward

Trump imposes sweeping new tariffs effective April 5 – 10% baseline on all imports, with higher rates for China (34%), EU (20%), and Japan (24%); auto tariffs begin tonight, rattling markets (WSJ)

Tariffs mark sharp shift in trade policy – Canada and Mexico avoid reciprocal tariffs but face 25% levies on most goods; stock futures plunge 2–4.3% on inflation and slowdown fears (WSJ)

March private payrolls beat expectations with 155K jobs added – Gains were led by business services and finance, while wage growth slowed and job-switching mobility hit a series low (CNBC)

Factory orders rise 0.6% in February on tariff front-loading – Gains led by autos and machinery, but core capital goods slipped 0.2% amid rising cost concerns (Reuters)

Market Pulse

Markets tumbled as Trump’s sweeping new tariffs, including a 10% baseline on all imports and steep country-specific hikes, signaled a sharp policy shift that raises inflation risks and complicates the Fed’s path forward

Trump imposes sweeping new tariffs effective April 5 – 10% baseline on all imports, with higher rates for China (34%), EU (20%), and Japan (24%); auto tariffs begin tonight, rattling markets (WSJ)

Tariffs mark sharp shift in trade policy – Canada and Mexico avoid reciprocal tariffs but face 25% levies on most goods; stock futures plunge 2–4.3% on inflation and slowdown fears (WSJ)

March private payrolls beat expectations with 155K jobs added – Gains were led by business services and finance, while wage growth slowed and job-switching mobility hit a series low (CNBC)

Factory orders rise 0.6% in February on tariff front-loading – Gains led by autos and machinery, but core capital goods slipped 0.2% amid rising cost concerns (Reuters)

Policy & Industry Shifts

LA’s mansion tax is straining housing development and missing revenue targets, showing how well-intended policies can backfire when they overlook market responses to added transaction costs

LA mansion tax cuts high-end sales 50% – Multifamily permits drop 60%, with tax revenue falling short at $288M/year vs. $600M+ expected (Bloomberg)

Residential

Affordability pressures continue to reshape the housing market as elevated mortgage rates and high prices sideline younger buyers, while baby boomers leverage cash to dominate sales and early 2025 activity picks up amid rate stability and growing inventory

Typical US home now requires $117K income – Up nearly 50% since 2020, as high prices and mortgage rates push affordability out of reach in 30 states and D.C. (Bankrate)

Boomers reclaim top homebuyer spot – 42% of 2024 homebuyers were baby boomers, surpassing millennials as affordability and cash offers shift market power (RISMedia)

Veros sees 2.4% home price gain in 2025 – Growth led by Midwest and Northeast, while rising supply and costs drag Sunbelt markets (Veros)

Mortgage rates hold near December lows amid economic anxiety – Tariff fears and weak GDP outlook weigh on sentiment, nudging buyers to act early despite muted 2025 price gains (Zillow)

Mortgage applications dip as refis retreat – Overall volume fell 1.6% WoW, with refis down 6% while purchases rose 2%, marking highest level since January amid rising inventory (MBA)

Office

Manhattan office availability hits five-year low – Q1 availability fell to 17.3% amid strong leasing, led by trophy assets and financial sector demand; deal volume reached 10.1M SF, up 21% YoY (GlobeSt)

Savills says LA office market has bottomed as Q1 leasing hits 3.4M sf – Trophy demand lifts Century City rents to $7.27 psf, but metro availability remains high at 27.9% (Commercial Observer)

Market Mix

College students flock to fast-casual and drink chains – They were 54% overrepresented at fast-casual spots in 2024, with some campus Starbucks seeing up to 82% student traffic (Placer.ai)

Earnings

RH’s sharp earnings miss and bleak housing outlook underscore how luxury housing-related sectors are being hit by high rates, weak buyer sentiment, and growing economic uncertainty driven by new tariffs.

Shares of luxury home retailer RH plunged 26% after-hours after missing Q4 earnings and revenue expectations and issuing a weaker-than-expected full-year outlook, warning of 'the worst housing market in 50 years' and a 'higher risk business environment this year due to the uncertainty caused by tariffs' (Investopedia)

Financings

Prime Finance lends $67M to refinance defaulted SF Hilton – InterGroup regains control of 544-room hotel after 2024 debt maturity default (CommercialObserver)

IRA Capital lands $58M loan for Seattle senior housing – Sound Point Capital provided financing for the 253-unit Quail Park of Lynnwood, expanded in 2020 after strong occupancy (MultiHousingNews)

M&A

Kingsbarn buys Skims HQ for $105M in rare LA office deal – Long-term lease, top-tier tenant, and high-end design drive one of few $100M+ sales in two years (CoStar)

Institutional Fundraising

PGIM’s $2 billion data center fund highlights growing institutional demand for AI-aligned real estate, as capital shifts toward infrastructure assets with long-term tech-driven tailwinds

PGIM raises $2B for first data center fund – Focus on low-latency sites for cloud giants as AI fuels global demand, with 2024 deals more than doubling to $31.6B (Bloomberg)

Distress Watch

Bank CRE loan delinquencies improve in Q4 – Overall rate dips to 1.99%, first quarterly decline since 2022, though originations remain below pre-COVID levels (Trepp)

Freddie Mac sells $261M in non-performing loans – 1,458 deeply delinquent mortgages auctioned in three pools, with settlement expected in May (MortgageOrb)

Proptech & Innovation

Roam’s funding push signals investor confidence that elevated mortgage rates will persist, driving demand for innovative solutions like assumable loans to unlock affordability

Roam raises $11.5M Series A to expand access to assumable mortgages – Startup aims to lower housing costs by helping buyers take over low-rate FHA and VA loans, with plans to reach 70% of U.S. market (TechCrunch)