The Brick Breakdown

Hello Brick Brief readers, 

In recent news, we’re seeing cooling home prices, shifting policy priorities, and renewed market volatility as tariffs ripple through the economy.

🏠 Zillow forecasts home price decline as demand softens
Zillow now projects a 1.9% home price drop in 2025 as listings rise and sellers slash prices to attract cautious buyers, marking a shift from previous growth expectations. The weak spring season, rising inventory, and D.R. Horton’s earnings miss all underscore growing affordability challenges and fading buyer momentum.

🏛️ Policy changes target housing aid and rental tech
The White House’s 2026 budget plan proposes deep HUD cuts and a Section 8 overhaul, potentially shifting billions in aid to state grants. Meanwhile, lawmakers across California and San Diego are moving to ban rent-setting algorithms and tax vacant commercial space as they try to rein in price coordination and underused assets.

📉 Tariffs fuel inflation risk and rattle markets
Trump’s renewed threats toward the Fed and tariff-driven uncertainty are stalling capital flows, with Pretium’s $778.5M refi at risk and CRE credit spreads widening up to 35 bps. Though Q1 consumer spending held up, Fed officials and developers alike are bracing for slower growth, inflation stickiness, and shifting global supply chains.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.87% (-2 bps)
10Y Treasury Yield: 4.36% (+5 bps)
FTSE NAREIT Index: 748.78 (+1.61%)
30-day SOFR Average: 4.35%

Market Pulse

Trump’s attacks on Powell and the Fed’s caution on rate cuts highlight growing political tension over inflation strategy, as tariff-driven price pressures complicate the central bank’s path forward

Trump renews threat to remove Fed Chair Powell -- Criticizes interest rate stance, says “Powell’s termination cannot come fast enough” despite legal limits on firing (AP)

Fed’s Daly signals rate cuts may be delayed -- Elevated inflation and resilient growth mean tighter policy could persist, despite Trump tariff risks (Reuters)

Policy & Industry Shifts

Federal downsizing and HUD budget cuts signal a retreat from direct housing support and office space usage, while rising scrutiny of rent-setting algorithms reflects growing political momentum to regulate housing tech. California’s proposed vacancy tax, however, could backfire by penalizing lease-up delays and deterring investment in already challenged commercial corridors

White House eyes deep HUD cuts in 2026 budget -- Section 8 overhaul could slash vouchers, shifting rental aid to state grants as part of broader rollback of federal anti-poverty efforts (NYT)

Trump admin lists D.C. HUD HQ for sale -- Aging building with $500M in deferred maintenance to be offloaded as agency eyes smaller footprint (Bloomberg)

Federal downsizing to release over 15M SF – DOGE plans to shed major leases nationwide, including DHS’s exit from Rosslyn Overlook in Arlington (CoStar)

Colorado advances statewide ban on rent-setting algorithms – Bill targets tech-enabled price coordination, echoing growing legal scrutiny of RealPage and similar tools (Bisnow)

San Diego bans rent algorithms – City joins others in blocking software like RealPage over rent price coordination concerns (GlobeSt)

California bill proposes $5/sf tax on vacant commercial space – Critics say it could backfire by deterring investment and prolonging lease-ups in struggling corridors (CoStar)

Residential

Zillow’s projected 1.9% home price decline for 2025 reflects mounting affordability pressures, as tariffs, high rates, and weak demand push inventory to a five-year high and stall buyer activity

Zillow projects 1.9% home price drop in 2025 – Listings rise and sellers cut prices to attract bids, while existing home sales are forecast to increase 3.3% to 4.2M (Zillow)

U.S. homes sell slowest in 6 years – Median time on market hit 47 days in March as overpriced listings and weak demand pushed inventory to a five-year high, while just 27% of homes sold above asking (Redfin)

1 in 4 Americans delaying big purchases -- 24% of U.S. adults say they're canceling home or car buys due to tariff-driven economic fears, per Redfin poll (Inman)

Home prices cool as demand weakens – Growth slowed to 2.6% YoY as high costs and economic uncertainty push buyers to the sidelines (Redfin)

Home-building slows as tariffs raise costs — Housing starts fell 11.4% in March, D.R. Horton cut its forecast, and builders brace for more weakness amid higher material prices and economic unease (WSJ)

Home values grew just 0.2% in March as sellers flooded the market – New listings rose 8.5% YoY, but buyers pulled back, pushing inventory to a five-year high and price cuts to a March record (Zillow)

Asking rent tops $2,000 in March – Rents rose 3.5% YoY as apartment affordability improved and single-family rental costs climbed, with 29.4% of income now needed for a typical lease (Zillow)

Office

Boston office vacancy hits 25-year high -- Q1 2025 vacancy reaches 14%, surpassing national average for first time since 2006 as tenant demand wanes (CoStar)

Industrial

Despite escalating tariffs, most firms plan to relocate supply chains to lower-tariff countries or automate operations rather than reshore, signaling limited domestic industrial revival

Tariff surge won’t bring supply chains home – 61% of companies plan to shift to low-tariff countries rather than reshore, while 81% would favor automation over hiring if U.S. production returned (CNBC)

Market Mix

In Boston, the freezing of $2.3B in Harvard-linked funds raises concerns of a local “wealth spiral,” jeopardizing biotech, housing, and job growth tied to the university

Boston faces ‘wealth spiral’ as Trump freezes $2.3B in Harvard funds – Cuts threaten local biotech, housing, and jobs tied to the university (WSJ)

Earnings & Real Estate Impact

D.R. Horton’s miss alongside Amex’s beat highlights a growing divergence in consumer behavior, with wealthier cohorts sustaining discretionary spending while broader homebuying demand weakens under affordability pressure and economic uncertainty

D.R. Horton missed Q2 earnings and revenue expectations and reduced its FY guidance due to weak demand. The nation’s largest homebuilder noted that its spring season had started slower than expected as homebuyers remain cautious due to continued affordability constraints and declining consumer confidence (Barrons)

American Express beat Q1 earnings expectations as total billed business on its cards rose 7.5% YoY as wealthy Gen Z and millennials fueled new card growth (Fortune)

Financings

Pretium likely to pull $778.5M Goldman Sachs–led CMBS refi -- Fitch withdraws ratings for Progress Residential’s 2,020-home bond deal amid post-tariff investor uncertainty (CoStar)

Starwood provides $350M refi for Manhattan condo – Bizzi & Partners’ 125 Greenwich St. secures refinancing with favorable terms as developers capitalize on stabilizing rates (CoStar)

Z.D. Jasper Realty secures $125M construction loan for Long Island City condos – iCross Capital backs 23-story, 190-unit project at former Paragon Paint site (CommercialObserver)

Greystone provides $120M loan for Chicago apartment buy -- Normandy Real Estate secures Fannie Mae financing for $170M acquisition of 375-unit Fulbrix Apartments in Fulton Market (ReBusinessOnline)

McCraney secures $55M loan for 665K SF industrial portfolio – Orlando-based developer lands financing from JLL Capital Markets for properties across FL, GA, and NC (CoStar)

M&A

Building & Portfolio M&A

Cammeby’s buys NJ multifamily complex for $161.5M -- Acquires 406-unit Avalon Wesmont Station in Wood-Ridge from AvalonBay, 12 miles west of NYC (CoStar)

Blackstone buys Miami-Dade multifamily for $116M -- Acquires 359-unit Elan Solea complex in Hialeah from Carlyle, Greystar, and Butters Construction (CommercialObserver)

Tishman Speyer acquires Montclair, NJ multifamily for $96M all-cash – Buys 200-unit Two South Willow from Brookfield Properties, marking a core-plus play in transit-connected suburb (CommercialObserver)

Christiansen Ventures buys Phoenix apartment complex for $87M – Broadstone Uptown PHX includes 280 units and was completed in 2024 by Alliance Residential (REBusinessOnline)

LendingClub buys San Francisco tower for $75M in HQ move – Fintech firm acquires 88 Kearny St. for owner-use (TheRealDeal)

Home Depot buys Watertown, Massachusetts store site for $72M – Property was part of $96M deal in 2022 (ConnectCRE)

The Goodman Group buys Minneapolis Golden Valley apartments for $59.5M – Suburban deal adds Liberty Apartments and Townhomes to its portfolio (BizJournals)

Distress Watch

CRE credit spreads widened by up to 35 basis points in early April as tariffs rattled investor confidence, with multifamily and retail facing the sharpest repricing.

CRE credit spreads widen as tariff war deepens – Lenders raised spreads up to 35 bps in early April, mirroring pandemic-era risk repricing as multifamily and retail sectors lead the shift (Trepp)

Office distress rises as vacancies hit tech hubs – 10.8% of 2024 sales were distressed, with vacancies surpassing 25% in San Francisco, Austin, and Denver as remote work reshapes demand (CommercialEdge)

Brookfield’s $260M loan on South Florida mall heads to special servicing – The maturing CMBS debt tied to Pembroke Lakes Mall is in default amid falling revenue and rising expenses (TheRealDeal)