Hello Brick Brief readers, 

Hope you all had a great Labor Day weekend. Recent news highlights Trump weighing a national housing emergency, Colliers projecting CRE gains under the OBBB, and rising inflation expectations that complicate the Fed’s path.

🏠 Trump Eyes National Housing Emergency
Housing affordability is at its worst in decades, with home prices up 40% in five years and mortgage rates at 6.56% keeping buyers sidelined. The Trump administration is weighing a national housing emergency to speed permitting, standardize zoning, and cut costs, which officials say could thaw a frozen market and ease entry for first-time buyers.

📊 OBBBA Fuels CRE Growth and Risks
Colliers finds the One Big Beautiful Bill Act boosts near-term GDP forecasts to 1.6% in 2025 and 2.1% in 2026, with CRE benefiting from permanent tax incentives. Yet higher deficits and Treasury yields could erode long-run investment gains, which raises questions about the durability of the expansion.

💵 Inflation Expectations Test Fed Path
Core PCE rose 2.9% in July, the highest since February, while consumer sentiment slipped as households expect 4.8% inflation next year. This data is crucial, as Powell said at Jackson Hole that the Fed is focused on keeping expectations anchored near 2%, which he stressed is critical because if they move higher, actual inflation will follow and rate cuts will become harder.

30Y Mortgage: 6.50% 

10Y Treasury Yield: 4.25% (+4 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 779.05

30-day SOFR Average: 4.36%

Core inflation hit 2.9% in July as spending and incomes grew, while consumer sentiment sank on tariff worries and an appeals court ruling that Trump’s global levies are illegal added fresh uncertainty for markets

Core inflation hit 2.9% in July, in line with expectations but highest since February – Consumer spending rose 0.5% and incomes gained 0.4% (CNBC)

UMich consumer sentiment fell to a three-month low – Consumers expect 4.8% inflation over the next year and weaker buying conditions on tariffs (Bloomberg)

US appeals court rules Trump’s global tariffs illegal – Levies stay in place during appeal, leaving trade partners and markets uncertain over refunds and future deals (Bloomberg)

Housing affordability is at its worst point in decades. National home prices are up more than 40% over the past five years and climbed another 2.9% YoY in Q2, though gains flattened quarter over quarter. Mortgage rates have eased to 6.56%, the lowest in 10 months, yet buyers and sellers remain sidelined as pending sales fall and listings retreat. Analysts still project prices to rise another 4.2% by June 2026, keeping pressure on households already stretched thin.

• One in five young renters now skips meals to pay rent, and 70% of Gen Z and millennial renters report cutting back on healthcare, dining, or travel to manage housing costs
• Inventories are rising in many metros, but the market remains frozen as affordability constraints prevent buyers from stepping in and keep owners locked into low-rate mortgages
• Treasury Secretary Scott Bessent said the Trump administration may declare a national housing emergency this fall as the White House looks to make affordability a centerpiece for midterm voters. He called the crisis an “all hands on deck” challenge and said officials are studying ways to simplify permitting, standardize local building and zoning codes, and decrease closing costs to expand supply
• Bessent emphasized affordability would be a core part of the Republican 2026 platform, arguing that reducing regulatory barriers and transaction costs could accelerate construction and lower entry costs for first-time buyers
• He also predicted sales could rebound once rates decline further, which would unlock supply from owners currently trapped in low-rate mortgages and ease the freeze in existing-home transactions
• Trump has floated opening federal land for housing development and cutting regulations as part of his broader affordability push, echoing campaign promises to make housing relief a central issue of his second term
• A lingering question is whether Trump’s aggressive push for rate cuts is tied to this strategy, since cheaper borrowing could spur sales, free up inventory, and reinforce the effects of an emergency declaration. Lower rates would also help mitigate the lock-in effect, where homeowners with mortgages far below current market rates are reluctant to sell, keeping existing-home supply constrained

Takeaway: A national housing emergency could allow the administration to bypass Congress and move quickly on measures that cut permitting times, standardize zoning, lower closing costs, and release more land for construction. These steps target the supply and transaction bottlenecks at the heart of the affordability crisis and could help thaw a frozen housing market.

OBBBA’s tax cuts and CRE incentives boost investment but risk higher yields, while labor shortages from immigration raids and Senate pushback on a Fannie-Freddie IPO add new pressures and uncertainties for housing affordability and supply.

The One Big Beautiful Bill Act (OBBBA) lifts near-term growth with tax cuts and deregulation – GDP forecasts rise to 1.6% in 2025 and 2.1% in 2026, while CRE gains from permanent incentives (Colliers)

OBBBA poses long-term risks – Higher deficits and Treasury yields could offset investment gains, challenging sustained growth (Colliers)

OBBBA cements CRE as a key winner – Permanent bonus depreciation, QBI deduction, 1031 exchanges, and Opportunity Zones strengthen investment returns despite sectoral trade-offs (Colliers)

35% of contractors report impacts from immigration enforcement – Labor raids and worker fears deepen a 450K-worker shortage as Trump’s $170B enforcement push reshapes construction job sites (Bisnow)

Senate Democrats warn Trump’s Fannie, Freddie IPO plan could lift mortgage rates – Warren, Booker, and Schumer urge FHFA to prioritize affordability over privatization concerns (WSJ)

Insight: A few weeks ago The Brick Brief flagged this issue, noting that affordability hinges on the implicit mortgage guarantee tied to government conservatorship. If that backstop weakens under a Fannie and Freddie IPO, investors would demand higher yields to compensate for added risk, which would translate into higher mortgage rates.

Trump signs order mandating classical architecture for federal buildings – Projects over $50M must adopt Greco-Roman or art deco styles, a shift that could increase costs amid already rising construction prices (Bisnow)

DeSantis pushes to eliminate Florida property taxes – Plan would require 2026 constitutional amendment, with GOP audits targeting local spending as revenues surge from real estate boom (Bloomberg)

Trump administration mulls a national housing emergency with rent relief and streamlined permitting, while polls show broad support for pro-housing measures like faster approvals and conversions even as seniors remain less enthusiastic

Trump administration mulls national housing emergency – Treasury’s Bessent signals rent relief, streamlined permitting, and construction standardization to boost supply and lower costs (Reuters)

Americans back pro-housing policies – Most support faster permitting, commercial conversions, and apartments near transit, while seniors are less supportive overall (Homes.com)

Refinancing demand picks up as mortgage rates fall to 6.56% – 2M+ borrowers can now save, with cash-out refinances making up 59% of activity (WSJ)

Small 2–4 unit buildings lead mortgage delinquencies – 2.02% of balances 60+ days past due at large banks vs 1.55% for single-family homes, still a 10+ year low after a 15.2% peak in 3Q 2024 (GlobeSt)

Mana Properties renews 97K SF lease with Stearns Weaver Miller at Museum Tower in Downtown Miami, FL – The law firm has occupied the 28-story building since 1987 (CommercialObserver)

U.S. industrial sales rose 15% to $33.8B in H1 2025, but vacancies climbed to decade highs as large new warehouses sit empty while small and mid-sized buildings remain tight. 

US industrial sales up 15% YoY to $33.8B in H1 2025 – Pricing holds at $129/SF, vacancies rise to 9.1%, and Dallas-Fort Worth leads with $2.3B in sales and 30.6M SF under construction (CommercialObserver)

Industrial leasing stayed firm in 1H 2025 – Vacancy rose to 7.4% (10+ year high) with net absorption down 47M SF YoY and 47% of post-2024 deliveries still empty as supply skews to large new facilities (GlobeSt)

Small and mid-sized industrial buildings lead in occupancy – Vacancy is 4.4% for 10k–100k SF vs 21% in new builds, with 75% of the pipeline over 200k SF concentrating slack in large warehouses (GlobeSt)

Midwest transportation and warehouse employment grew 18.6% over 5 years, adding 278K jobs since 2015 – Growth has slowed recently as new warehouse development declines (CBRE)

Bidding dynamics stabilize after three months of declines – July marks first improvement of 2025 as capital targeting CRE deepens, per JLL’s Global Bid Intensity Index (JLL)

Aldi to add 200+ U.S. stores in 2025 – Discount grocer targets inflation-weary shoppers with private-label focus and plans largest NYC store near Times Square

Las Vegas tourism softens as out-of-market visits fall – City traffic slipped 0.7% YoY in Q2 and Strip visits dropped 5.1%, with higher travel costs pushing visitor incomes to $99K median on the Strip (Placer.ai)

Continua Developments and Oldtown Capital secure $50M financing for Urbania NoMi in North Miami, FL – First American Bank provides $40M senior loan and Waterton invests $10M in preferred equity for the 195-unit project (CommercialObserver)

PE firm Sycamore Partners completes $10B acquisition of Walgreens – Company splits into independent units including Walgreens, Boots Group, Shields Health Solutions, CareCentrix, and VillageMD (Bloomberg)

MetLife sells three-property industrial portfolio in Los Angeles, Redondo Beach, and Carlsbad, CA for $166M – TA Realty, Terreno Realty, and GID acquire assets in separate transactions (Bisnow)

Florida SBA commits $1.57B to real estate in Q2 – $625M to funds and $880M to JVs mark its largest quarterly allocation in a decade (PERE)

$133B in CMBS loans reached maturity since 2020 – 34% failed to pay off, with office and retail weakest while multifamily, industrial, and self-storage maintained strong payoff rates (Trepp)

Genesis Healthcare nursing home operator cleared to sell under Chapter 11 – Judge lets company borrow $30M and pursue sale led by Joel Landau, despite patient-claim opposition (WSJ)

Private mortgage lenders face warning signs in Baltimore – Inflated appraisals spark lending pullbacks and fraud concerns, raising risks for Wall Street-backed hard-money loans (Bloomberg)

Bob’s Stores inventory liquidation under Chapter 11 – GoDigital subsidiary is closing 21 Northeast locations in strip malls and power centers (CoStar)

Flexspace AI expands dynamic pricing from meeting rooms into office coworking – ML-driven engine adjusts rates by demand and utilization without using rival price data to help landlords optimize revenue (GlobeSt)