In a recent post on xTwitter, Dylan Ratigan did an excellent piece on the turmoil in the bond market and the administration’s actions to address it. He starts by recounting his days at Bloomberg in the early nineties when the bond market was seen as the most important beat.

For Bloomberg to establish itself as a serious global financial news organization, the internal conviction was that they had to publish the smartest, most insightful, most defining bond market story in the world every single day. That was where primacy in financial news got established. If we could beat the Wall Street Journal and the New York Times and Reuters on the bond story, day after day, we would own the credibility that everything else depended on.

Fast forward to today and the bond market gets significantly less coverage when it is the market that “sets the price of everything on earth…every mortgage rate, every car loan, every corporate borrowing cost, every government’s ability to fund itself, every currency’s relative value — all of it is priced off the risk-free benchmark that US Treasuries provide.” That scarcity of coverage has changed a bit in recent weeks as Bessent has been all over town announcing various tricks to support the bond market, sparking drama in financial media.

Despite Bessent’s efforts, yields have remained stubborn. Following Warsh’s speech today which is being characterized as “hawkish” with a somewhat rosy view of the economy (“labor markets were stable, and output was solid”), the 10-year went even higher. Watching what happens in the bond market is the key to understanding the financial system. As I often discuss, there are multiple themes at play. Many will act as if they know exactly why x,y,z is happening, but I find it more important to just watch what happens. It’s obviously critical to have an understanding of the key themes, but with complex systems such as this one, the best indicator can be the action itself.

The action today was certainly not good for mortgage rates. Those looking for relief for the housing market through lower rates are disappointed yet again just as they have been since 2022. Year-to-date combined sales are running just 1.31% ahead of 2025 which had lower combined sales than in 2008.

Existing home sellers in the Northeast and Midwest are staying stubborn on price even as YoY sales are down for both regions and inventory growth is positive. If rates remain elevated through the fall while delinquency also rises, we could see cracks in prices in those regions as well. Illinois, Indiana and Ohio are in the top 10 for foreclosure activity by state.

New Jersey comes in at #11, Maryland at #14 and Pennsylvania at #20. In looking at client information, foreclosures rose significantly from July to August. We won’t have confirmation from industry data providers until a month from now, but if the numbers look anything like what I’ve seen this month, many will be taken by surprise.

High mortgage rates will not help the builders either as supply builds. New home sales results were disappointing to say the least and sales prices are the lowest they’ve been since July of 2021, down -14.45% from their 2022 peak.

Importantly, the builders will have to work even harder to clear the 10 months of supply they reported. You know that I believe that supply is actually higher as builders drag their feet on occupancy certificates in subdivisions that aren’t selling. This will not be good news for the existing home market especially in places like FL and AZ which start their snowbird season in October. The below dysfunction will likely get worse as builders cut prices even further.

Why more people are not talking about this upside-down relationship in sales prices is beyond me. C’est la vie.

As promised, today’s post will be a deep dive into NYC and the “Mamdani effect”. What is the current political reality versus the headlines? Is the DSA movement as destabilizing as media has portrayed it? Are folks fleeing NYC in droves due to the new tax on nonprimary residences? What impact could the rent freeze have on the market? Just how bad is the fiscal situation in NYC? These and other topics will be explored to paint the picture of the path ahead. Additionally, I will provide details on July sales prices, new home sales, combined sales and delinquency from Black Knight/ICE. Finally, I will share my latest commercial real estate piece on the state of senior housing, recent losses and the watchlist for the Freddie Mac Multifamily K-Series.

New York’s fiscal situation is flashing red and has important lessons for municipalities across the country. A clue about those lessons came in today’s preliminary benchmark payroll revisions for March 2026.

Let’s begin…

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Such is the summer of 2026. The midterm elections loom, and as discussed last week we are hunkering down in preparation. The jobs report indeed surprised to the downside providing cover and plausible deniability for inaction or action by the Fed. Meanwhile members of the administration deny the plight of millions of Americans, especially those who have dropped out of the workforce. The labor force participation rate is at its lowest since women started joining the workforce at scale in the 70s.

The stock market snoozed right through the report, leaving traders to sun and fun in the Hamptons. The 10-year treasury lurched in the following days, settled back down to the 4.6 range and then rose again to end the week closer to 4.7, landing 30-year mortgage rates at 6.71%. The 30-year treasury on the other hand hit its highest yield since July 2007. For an excellent discussion of King Bond Market, I recommend watching this breakdown from and . The Japanese yen as well struggled despite performed support by the United States. provides an excellent analysis of the latest episode of the Japan/U.S. soap opera and provides an on-the-ground read that I believe is unparalleled.

Weston’s analysis shows the administration’s level of sophistication with respect to media market manipulation. Just write a little note that everyone can see and you don’t have to do a doggone thing…for a bit.

Meanwhile we have received both existing home sales and early reads from Redfin for July. Both of these entities are now providing information much earlier in the month. Non-seasonally adjusted both series showed an increase from last year’s abysmal sales which were the lowest July sales since 1999 besides 2010, 2011 and 2023. For perspective we have increased population by 13% since the GFC. Month-over-month (MoM) sales were down -5.66% in the NAR series as expected due to exiting the season in July. Since 1999 sales on average decrease -5.32% from June to July. July’s sales were -16.01% below the average, -19.84% lower than July of 2007 and -4.31% lower than July of 2008. NAR also reported that sales in the +$1M price tier were up 14.8% YoY when most Americans cannot afford a $300K house.

How long can this madness persist? Everyone is tired of waiting, tired of hunkering down, tired of scampering and foraging. Timing is impossible but we are seeing many signals. One of my clients who has been in the mortgage business for 40 years is getting out completely having braved the S&L crisis and the GFC. United Wholesale is on the brink of breaching tangible net worth covenants. Realtors, brokers, flippers are pivoting to other professions or plays including short sales. When will this cycle make its final turn on the national stage? Likely when most realize that there is not enough power or money for the datacenters that have been planned.

Once that realization occurs, many of those 26,000 construction workers in New Albany, OH and on other sites across the country will be forced to go home. Only then will this most recent land cycle come to a close. My best guess for this realization will be after the election. There will be fireworks in the fall especially as the hard debt maturity wall for commercial real estate comes crashing down and as private credit continues to come under stress. October is always a spicy month in the markets and close enough to the election for people to be too confused to change their minds. We will finally see the new foreclosures impact Case Shiller by perhaps December or January. Those foreclosures will continue to ramp from here, increasing their impacts to the series. For example, the foreclosure sale I shared in my last post occurred on July 28th. Redfin would not have that sale in its July results (as of August 3rd) as the deed has not yet recorded. Price cuts are increasing, but those homes have to sell for the national numbers to be impacted. Redfin reports there are now more sellers than buyers since they started tracking.

Patience has never been my strong suit. But, as the clouds oppress, I continue to research, seek knowledge and understanding. I recommend that for those who feel the same.

As such this week I spent time scouring United Wholesale’s financials. Some of you may remember my article about UWM, the #2 lender in the United States by count, in April of 2024. My issues with UWM go back much further than 2024. It was clear in 2021, for instance, they were headed for danger. Their business model was laughable to me but that didn’t stop them from trying to find every borrower out there they could to enter the gates of debt slavery. Now, the rooster has come home to roost. For today’s post, I will focus on exactly what I saw in their financials as well as detailed results for sales, price and inventory for July for both NAR and the M3 series. Additionally, I will share my latest piece on commercial real estate which discusses how your mainstream analysts surf the cycle, never giving you the actual information you need to make informed decisions. Even those who were the contrarians of days gone by have been coopted by complacency or money and now play the same game. Finally, I will give you an early peak into July delinquency. For those who cannot join us below, I must leave you with this - there have never been more signals that the jig is up. Does that mean it happens tomorrow? No. It means that unless we all start making a lot more money, this ship has only one place to go. And, on that note:

Let’s begin…

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US hiring slowed markedly in July and the unemployment rate rose to an almost three-year high, raising recession concerns and putting the Federal Reserve solidly on a path to cutting interest rates in September.

Nonfarm payrolls rose by 114,000 — one of the weakest prints since the pandemic — and job growth was revised lower in the prior two months. The unemployment rate unexpectedly climbed for a fourth month to 4.3%, triggering a closely watched recession indicator and hammering stocks.

The markets would further be roiled by a kerfuffle in the global stock and bond markets largely attributed to an unwind of the yen carry trade. The yen carry trade, “defined broadly as using a low-yielding yen to buy higher-yielding foreign assets” can be “traced back to 1999 when Japan struck policy rates down to zero after its asset price bubble burst.” Japan became the “world’s biggest creditor nation” while its citizens sought out yield in the international markets to “get anything better than the zero yields at home.” When rates began to rise in the United States in 2022 and 2023, these positions grew to be quite large. So, when the Bank of Japan ended its negative interest rate policy and began to raise rates, “traders rushed to repay their yen-denominated borrowings.”

Old news, right? If you have been following along at home with financial markets, you may know already that the United States recently made the decision to “intervene” in the Japanese currency market after the yen fell to its weakest level “against a basket of trading partners and adjusted for inflation in data going back to 1970. Japan, which imports most of its energy, is facing a double whammy of the higher oil prices that affect everyone and even higher prices in yen terms as the currency plumbed new depths.” Why would the U.S. do such a thing? Japan provides a good deal of capital to the U.S. financial markets and is the largest holder of U.S. treasury securities. What the U.S. cannot afford at the moment is for Japan to start selling those treasuries to support its currency which would cause interest rates to rise even further.

Source: FRED

Long-time subscribers know that the 30-year mortgage rate actually tracks the 10-year treasury as mortgages on average have a shelf-life of about seven years. As yields on the 10-year rise, so do mortgage rates. As I’ve often discussed, the spread between the two can vary for a variety of complicated reasons, but rising yields invariably mean rising mortgage rates. A rising yield on the 10-year isn’t just bad for housing, though. It’s bad for just about everyone who has to borrow money, be it businesses or consumers. And, there’s a heck of a lot of money being borrowed at the moment. From hyperscalers to stock market gamblers, leverage looms large in the system.

U.S. margin debt, or what investors borrow from their brokerages to buy securities, rose 54% to a record $1.4 trillion in May from a year earlier, according to Finra data. Meanwhile, high-risk leveraged exchange-traded funds that produce double or triple the daily move of underlying stocks are growing rapidly, as is trading in options tied to them.

The U.S. government also cannot afford higher interest rates as they need to rollover trillions in debt this year.

I realized when I published last week that I was probably one of the few analysts not talking about what the Fed might do. You see, after the turmoil in the market in August 2024, the Fed would cut the Effective Federal Funds Rate by 50-basis points (bps) in September. The 10-year and mortgage rates were unimpressed.

At the time, I watched everyone in the mortgage industry who had promised Fed rate cuts would be the answer become apoplectic. I’d personally been pushing back on that narrative since 2022 due to our new geopolitical realities post the war in Ukraine and also due to who holds our foreign debt. Every time I brought this up to housing pundits I was ignored.

I’m not arguing that the Fed’s actions are unimportant. Their actions are important precisely because of the way the larger market perceives those actions. For our purposes, I personally pay way more attention to the bond market, and I could tell based on its behavior that at a minimum, mortgage rates were not going to drop precipitously no matter what the Fed did. Indeed, they did not. Instead, yields and mortgage rates went higher.

After the Fed made that rate cut in September 2024, some analysts later came to believe that the move was politically motivated, and perhaps it was. Tomorrow’s setup seems similar in that whatever happens with the jobs report could pave the way for a “political” action/inaction just before the midterms. Bloomberg published an article yesterday arguing that it looks as if we have side-stepped fall-out from the joint US/Japan intervention as traders have moved to tap other currencies instead of the yen to effect the carry-trade strategy.

The muted response has eased fears of a repeat of the 2024 blowup, and shows that investors have diversified away from the yen, tapping currencies such as the euro and the Swiss franc to finance purchases of high-yielding assets in emerging markets.

No one really knows though. There is no definitive source out there that tells us how big or how small the yen carry trade really is. What we do know based on what transpired in August of 2024 is that a macro surprise can cause a sudden and violent reaction in markets. Another article on the topic from the WSJ argues that while the yen carry trade “should have become less attractive as policy rates converged, strengthening the currency,” traders instead shifted their focus to “2-year bond yields, where the gap widened a bit this year amid a cautious tone from the BOJ and expectations of Fed rate rises.” So, is it that traders are using other currencies or that the yen carry trade has taken on a slightly different flavor or that we just haven’t hit the right speed bump to see fallout?

The author of the aforementioned WSJ article also posits that in essence the intervention will serve as QE-lite and an injection of liquidity into already frothy markets. A former Fed employee, Jill Cetina, concurs.

Use of Fed facilities to fund sustained Japanese fx intervention in a material way would see the Fed’s balance sheet grow (QE-lite) and ease US financial conditions. Easing US financial conditions would be inconsistent with the FOMC’s stated goal to return elevated US inflation back to target.

If your head is spinning, or you have fallen asleep, then my point has been made. We keep plugging holes with any and every available tool to avoid the inevitable. If you study these cycles, you know that eventually the water crests over the dam. After ADP came in light yesterday, some analysts believe that tomorrow’s jobs report could be disappointing. Are we setting up for Fireworks Friday? Or will it be another boring August Friday as traders head to the Hamptons?

Your guess is as good as mine. What I do know is that with each passing day the system becomes more fragile. In mortgage specifically, after being a long holdout in the credit market, the floodwaters are now coming fast and furious with foreclosure starts (mortgage has just been referred to foreclosure) up 39.69% YoY in June. You may be thinking that we’ve held on this long so why couldn’t we hold on just a wee bit longer? There have been no meaningful moves to prevent what happens next in mortgage and housing. Housing is a very big deal to the economy, and the idea of “home equity” is one of the largest contributors to the wealth effect. I’ve long argued that when the big orange (ironic) below hits the skids, it will indeed be Hammer Time!

Not only is mortgage delinquency rising, but what happens when those who were dating the rate realize they are actually already married? In a recent report by Truework who surveyed homeowners who had purchased in the last 24 months, they found that “85% of recent homebuyers with a mortgage said refinancing within the next three years is important to their financial health. That’s up from 56% in a similar 2025 survey.” If that wasn’t bad enough, half said that they won’t be able to sustain their mortgage if they cannot refinance into a lower rate. To be clear these folks are not the ones currently in the default pipeline…they are the ones who will be entering that pipeline at a future date.

For now, let’s talk about the existing default pipeline. Not only are foreclosure starts up, but foreclosure sales are also up (+15.56% YoY). For the first time since 2019, my clients are seeing their first sales come through the pipeline and are paying the price. As a reminder the agencies (Fannie Mae, Freddie Mac, FHA, etc.) own the majority of mortgages. The banks and nonbanks hold on to the right to service those mortgages for a fee. So, it is the agency that tells the servicer what to bid at the foreclosure auction. For today’s post, I will take you through an illustrative example of a recent FHA foreclosure sale and how it could impact a market near you. These haircuts are more aggressive than even I would have thought at this point of the cycle. What it tells me is that FHA wants to offload these properties as fast as possible. Serendipitously, I could not have picked a better topic to discuss today as I watch United Wholesale Mortgage’s stock crater after announcing a $452M loss and that it would not pay dividends.

Talk about deja vu. Servicing costs and pipeline hedging losses can be papered over with origination of more loans or acquisitions. UW is blaming a failed acquisition on its loss. Without their 10Q, I cannot tell you exactly what happened, but I can tell you that nothing good is coming for mortgage any time soon. These nonbanks are in for a world of hurt as these servicing costs increase. Rocket also just reported. Despite seeing an increase in revenue and market share (won’t be good later), the stock is down in after-hours trading. Once I get both of their 10Qs, I will do a post charting what’s next for these nonbanks.

But for today, I will walk you through an example haircut for an asset in TN which just sold at a foreclosure auction. I will also provide the lists of cities where we saw motivated, distressed and depressed selling in June. This week’s post also includes top 5 city summaries for sales, prices, listings, delistings and days on market as well as insights into cities where we are seeing sales increasing and decreasing. Lastly, I will share my latest piece on the state of commercial real estate which discusses the biggest risk pension funds currently face.

Let’s rock and roll…

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After adjusting for seasonality, the National Index declined 0.05% month over month, while the 10-City and 20-City Composites posted modest gains of 0.3% and 0.2%, respectively. The gap between the NSA and seasonally adjusted results underscores the extent to which seasonal factors are supporting headline price growth. Even where prices increased on a seasonally adjusted basis, gains remained modest and were negative in real terms.

My readers know that I’m not a fan of seasonal adjustments except as clues for what we are “supposed” to think about the data. Otherwise, you just get caught up comparing forecasts and not what actually happened. For my tracker, I always use the non-seasonally adjusted (NSA) numbers. From April to May, the MoM increase decelerated in the non-seasonally adjusted series from a 0.83% MoM increase from March to April to a 0.64% increase from April to May. Since the series started in 1987, the average increase from April to May is 0.91%. The average from 2007-2011 was 0.52%. In 2009 it was 0.84% which is higher than this month. In fact, since 1987, there have only been 10 Mays with lower YoY increases in May.

Remember how I mentioned that the previous 18-year cycle prior to GFC was in the early 90s? I promise to write more about that cycle soon, but no matter which way you slice it, these results show a picture that is deteriorating. Importantly, as noted in the quote above, home prices are down in real terms as the YoY increase is below the rate of inflation. I don’t spend a lot of time talking about that as the price you will have to pay is what matters most, but it is important to remind everyone on occasion.

In the M3 Series which includes the 86 markets I track, we saw less seasonal price firming in June than we did in May (+1.48% YoY in June versus +1.85% in May). You could see the weakening in the Redfin national numbers as well although the decrease was a bit less (+2.22% in June YoY versus +2.30% in May). Likely the Case Shiller results will still be positive for June when they are announced in late August but slightly less positive. The largest gains we saw in the Redfin national series were from March to April with additional YoY firming in May albeit at a slower pace. I know that’s a lot of numbers, but in summary, it is unusual to see this type of weakening during the season.

You know what Case Shiller does not track in its series? Condo sales and prices. Why does that matter? In some markets, we have seen significant price declines from their recent peaks. Nationally we have seen sales materially decrease from their 2021 peak. That bloodbath could get much worse for a host of reasons, but one reason is due to a recent change by the government-sponsored enterprises (GSEs) to their approval guidelines. Before we go there, we must first talk about those new home sales which were released late last week. For those of you who are signed up for my breaking news alerts (you can sign up here), you already know that those new home sales results were underwhelming though the media managed to eke out a positive spin based on a head-scratcher of a seasonal adjustment this month. Sales prices, however, did not enjoy any positive spin.

Speaking of questionable headlines, Black Knight/ICE came out with a doozy (discussed below) to try and whitewash June mortgage delinquency results even though the numbers were whoa. That YoY increase in foreclosure starts should have been the headline. If you are a frequent reader or even consumer of my YouTube appearances, you know that since last Fall I have been saying we would start to see material increases in June. And, we did. Again, we are coming off a very low floor, but what’s important is the direction.

So, how bad were those new home and delinquency results exactly? What does the current state of the condo cycle tell us about where we are going and how this GSE change may impact that market and accelerate price declines? I will share key market stats for condos as well as give you context on their importance. Condos played a large role in the crisis last time, and it looks like they will do so again. And, finally, I provide detailed, regional information for the M3 series. For the third time, one region again showed YoY price declines, and it is not in the South or West.

Let’s begin…

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And then, the balcony

Later this week, we will receive New Home Sales and put a final period on the selling season. With builder confidence coming down again in its latest report, it’s unlikely those sales will be anything to write home about.

Last week I mentioned those buckled columns at the former Pfizer building in NYC, but I could not let the story go as I knew there was much more to it especially when it was announced that the developer closed on its next project one week after the incident on East 42nd Street. A subscriber thankfully sent me some videos and down the rabbit hole I went. Please find below my discoveries including the tangled web we weave when debt makes literally everything possible. Today’s post will be shorter than normal with another post coming later this week to discuss builder results.

Feeling very blessed at the moment. I hope that you as well find some soul medicine as your summer winds down.

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The ambitious project aims to transform the former Pfizer headquarters complex in Midtown into roughly 1,600 apartments, along with a rooftop pool, fitness center and ground-floor shops. It is expected to be completed next year and is the largest ever office-to-residential conversion in the country.

The developer said the increased weight from the widening of about 15 top floors—starting on the 22nd floor—caused the structural damage.

Mamdani said Wednesday that he still considered office-to-residential conversions to be part of the answer to the city’s housing crisis—but emphasized that such conversions must be done safely.

Forget that there are anywhere from 50-100K apartments being held vacant in NYC due to the passing of a law in 2019 which capped how much owners of rent stabilized apartments could raise rent for capital improvements. An insignificant detail of course, she says sarcastically. Landlords cannot afford to bring these apartments up to code, so they have chosen to let them sit vacant. Let’s for sure power forward on a ridiculously expensive and complex development project which makes little architectural sense instead of actually trying to utilize the existing stock and solve our housing problems that way. Makes perfect sense when you understand it’s not about solving problems but feeding the debt markets and satiating Wall Street’s never-ending appetite for fat fees.

As first responders raced to the scene, a developer, Michael Pestronk of Post Brothers, “had just finished pitching investors on a slate of new real-estate conversion projects on Tuesday, when he noticed five missed calls,” leading him to worry that lender interest would cool on conversion projects. Multiple locations on the block were evacuated, including a Hampton Inn, leaving tourists stranded. Temporary beams have now been placed on floors 18-23 at 235 East 42nd St. to shore up support and prevent a collapse. MetroLoft, the developers on this project, dove into this particular virtue-signal fantasy with both feet.

The past half-decade has been a boom time for office-to-residential conversions. At the start of this year, about 90,300 units from office-to-apartment conversions were in the pipeline across the U.S., up 28% from a year earlier, according to the apartment search website RentCafe.

New York City leads the way with 16,358 office-to-apartments in various stages of development, nearly double compared with the year before.

Private developers see conversions as a potential way to cut down on the ballooning costs of building from scratch. Public officials like the win-win: It addresses both their housing shortages and the overhang of empty office space plaguing downtowns (my emphasis).

While many of these office buildings sit empty, developers continue to build new office buildings, adding to the already over-built office stock. In New York City in particular those empty apartments which could be a solution to the so called “housing” shortage are staring them straight in the face. The only reason the solutions aren’t obvious is because the incentives are not there and the maze of red tape is Soviet-style absurd. Instead, we are left living in some dystopian reality where logic has exited stage left.

When I wrote my article for HousingWire in January of 2023 I mentioned the office-to-apartment phenomenon as a potential driver of increased inventory, albeit delayed. What I did not realize back then is just how long these themes take to play out.

Let’s do a quick pulse check as to where we are with each of these themes. With respect to the Airbnb bust that has been ongoing since late 2022, lending has only increased in this area despite owners falling on hard times. Just as the industry should have been pulling back from this space and non-qualified mortgage lending which includes debt service coverage ratio loans, they are falling all over themselves trying to capture the volume.

Why? The securitization machine is a Ponzi scheme, so they need an endless supply of product to keep it going and “mask” other declines. Soon, the expense side is going to raise its hand due to increasing defaults and mandatory repurchases. You see, in this game, when the stuff hits the fan, the entity left holding the bag, turns to the entity behind them and says no way, Jose. You have to buy this back for x, y and z reason. There are always reasons because the technology, process and people in this space would make Bartleby, the Scrivener look productive. Due to the way the system is constructed, there is usually someone behind you. The smaller lenders who then deliver their loans to correspondents who sell those loans to the agencies will get smoked. I’ve already seen it happen.

For a real-world example of Airbnb motivated selling, take San Diego. I was told over and over and over on social media that sales prices would never come down there due to the large military presence. Then I made a little visit and begged to differ. From the time period of my visit, a snapshot of the Airbnb infestation in San Diego from Inside Airbnb:

At the time, Inside Airbnb showed on their map 12,346 short-term listings. Per Redfin, median sales prices were down in May -2.98% YoY. Many short-term operators who could not sell properties listed them for long-term rental instead. Since June of 2024, listings for rent in San Diego have increased by 20% and listings for sale have increased by 46.86%. According to AirDNA occupancy sits at 57.4%, down from 63.7% in June of 2024. Remember, those loans were underwritten to the “optimistic” view of occupancy that you can find in the AirDNA platform. Just wait until we say goodbye to the World Cup on July 19th.

For theme #2, look no further than Vinebrook to see fire-selling on the institutional investor side.

Vinebrook, who owns 20K+ single-family rentals, is by no means alone. I had the opportunity to be in a closed-door conference session with one of the largest institutional investors last September. At the time, I was told they were rehabbing as soon as leases were up and selling as fast as possible in most markets.

For theme #3 regarding robust, new construction with motivated selling, please see last week’s post. Builder motivated selling will increase into the fall and beyond.

With respect to boomer second homes, I believe they comprise a good portion of the rage delisting we have seen across the country. As you are aware based on recent shared stats, delistings in May as a % share of listings hit almost 10% on average for the cities I track…in the selling season which ended 9 days ago. There’s no way to tell at the moment, but I’m ever in search of new data. Those who have delisted are not in a relative hurry to sell as the stock market hovers around record highs. Almost every week I meet a retiree who is fully invested in the stock market. Sigh. The AI narrative recently took another hit when OpenAI delayed its IPO and Alex Karp went on CNBC slamming the frontier models. Watch out, San Fran. The mania that has taken hold of the housing market there is about to punch some folks in the mouth.

Of course, the fifth theme regarding office-to-apartment conversions is mentioned above. Our sixth and final theme is our challenged demographics.

Not only is household growth slowing due to affordability challenges and slowing wage gains, the largest group of homeowners is also growing older with aging-related household dissolutions “poised to increase dramatically. The cohort of householders age 65 and over in 2025 is projected to shrink by 1.4 million annually between 2025 and 2035” compared to 1.2 million between 2014 and 2024, an increase of 16.67%. One of the reasons this trend takes time to understand is just how long these properties can be tied up in the probate process. I recently went to an auction with a friend for a property where the owner had been deceased for three years. Immigration also worked to slow down wider recognition of our demographic problems, leading many to believe those population gains were due to relocations versus immigration. The Harvard study notes that “the share of households that have relocated in the past 12 months fell to 11.2 percent in 2024, according to the Census’ American Community Survey (ACS), lower than any point in the 20-year history of the survey.” People may want to move but many simply cannot afford it.

Speaking of immigration, I’ve seen the recent headlines claiming that immigration specifically led to large increases in home prices. I think the issue is nuanced and should be studied regionally. The Dallas Fed paper behind the headlines is more subtle. Until I can access reliable data, I will not be commenting.

This is where we were before we received existing home sale results today. With the publication of June existing home sales, the U.S. selling season has come to an unceremonious close. Wow, what a dud this season has been (again).

With rates averaging much lower than this time last year, 6.27% through June this year versus 6.81% through June last year, we should be seeing higher sales. The small gains we have seen YoY have been muted even with the stock market hovering around all-time highs. Existing home sales for June of 2026 came in the lowest since 1999 behind 2008, 2024 and 2025. Below I will share details as well as my thoughts to what’s next for both sales and prices. Additionally, we will put a pin in May with the top 5 city summaries for sales, price, inventory, days on market and delistings as well as lists of cities where we are seeing motivated, distressed and depressed selling. With each passing month new and interesting names are making it to these lists, including cities in regions which are supposed to be just fine. 23 cities showed signs of motivated selling (sales up YoY, but prices down) compared to 8 cities last year. You may recall that overall, 33 of the cities I track had YoY price declines in May versus 26 markets last year, including 13 of the 29 markets I track with populations over 500K. Just so you know it’s not just the cities I track. According to the Harvard study cited above, 41 of the 100 largest markets showed YoY declines in February 2026 compared to 9 in 2025. The JCHS noted that even in the markets that are seeing appreciation that appreciation has dropped below the rate of inflation in most of them. No matter how loud the chorus, home price appreciation is transitioning to home price depreciation with no end in sight considering the above themes. Finally, I will share two of my commercial real estate posts this week: my most recent on Scott Everett’s $400M wipeout of its first multifamily fund as well as a post written earlier this year regarding a new office tower in New York City with, funnily enough, Pfizer as its anchor tenant. The Spiral, a 66-story, 2.84 million-square-foot office building located in Hudson Yards is Pfizer’s new home after selling the location featured above. This property is the sole asset in a rather large securitization. Nothing to see here, folks. As we near the end of the cycle more and more of these stories will be crossovers from previous stories. As discussed here often, commercial and residential real estate are inextricably linked.

Without further ado…

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Last fall, we started to see several cracks in that narrative. Zillow announced that over 50% of homes on their platform had price cuts which averaged over 9%. Various industry participants started to change forecasts and rate outlooks. After Realtor restated list prices so June stayed positive in 2025, we saw the median list price go negative YoY in November, and it’s stayed there.

Then there’s the spikes in delinquency. Based on all the celebrating around increased tax refunds I was not expecting to see unseasonal behavior there. We had also been told that a core goal of the administration was to keep gas prices down. With the midterms looming it looked as if we might crawl on what are now very bruised hands and knees through yet another year of depressed sales and frozen prices. You all know what happened in late February which accelerated distress, resulting in early-stage mortgage delinquency.

Source: ICE/Black Knight

That we are seeing 30-day delinquency increase is the signal, especially in the spring. Americans do whatever it takes to save that credit score until there is nothing left to do. Early delinquency is the kind of delinquency that makes the industry very, very nervous. It means that distress is increasing across the system. The first time we saw that significant stress was in the FHA book in June of 2023 which prompted the Biden administration to create those very aggressive loss mitigation options that staved off trouble through the election. The problem now is that you risk stability to the whole securitization system if you try to do anything further. It’s a Ponzi scheme, and you cannot gamble on the gamblers getting spooked about disappearing liquidity. I’ve come to believe as well that there is awareness that the FHA program in particular was widely used by investors fraudulently.

Additionally, the material increases in serious delinquency and I have been warning about for over a year have arrived on the scene. Turner announced limitations on the FHA Covid relief options in April of 2025, and as John and I both said at the time, those changes would take time to roll through the pipeline. Through John’s work and my review of industry data, we are observing an almost 50% failure rate on trial plans due to the new requirements. This is why in the above chart we are finally starting to see properties in the 90-day delinquency bucket increase. Previously, folks would just go back to the till to get another Partial Claim. While there may be additional intervention when things get bad enough it will likely take the form of state hardship funds backed by federal dollars. There will be a regulatory response as well that will slow things down, but we have reached the point where it’s no longer just the most vulnerable in distress. Distress in the prime books is the death knell, and the industry knows it.

As I’ve said ad nauseum, the housing market moves at a snail’s pace (until it doesn’t). I think as humans we often believe things should happen much faster than they do. We forget that actually a year is not a very long time at all. As I get older, I feel that absolutely. The past few years have flown by; the speed accelerating with each passing year. Would you believe there is a body of well-researched work out there that posits that the land (speculation) cycle takes 18 years to complete? Researchers from different centuries converged on this theory - often independently - when studying various countries and their booms and busts. This most recent paper is written by the brilliant Catherine Cashmore from Australia and covers over 250 years of historical evidence. Catherine sought me out after watching some of my interviews, and I’ve had the opportunity to speak to her multiple times. The basic premise:

Long-time readers will remember me mentioning the great book Bubble in the Sun which argues that the Florida land speculation bubble is what caused the Great Depression. Researchers who subscribe to the land cycle theory were able to call real estate busts such as 2008 with a great level of accuracy far in advance. I have much more research to do into the theory as well, but the evidence is compelling. Importantly, the paper provides an interesting framework through which to view our current predicament. One thing that has puzzled me greatly since seeing very, very obvious signs of the bubble in 2022 was just how long the narrative around rising home prices has sustained. Although we have touched on it often here, I don’t think I realized just how much the AI/data center story is a land/real estate story.

The years immediately following the mid-point recession often show some of the strongest increases in land values, building activity, credit creation and speculative behaviour. The mid-cycle downturn is therefore not a failure of the cycle, but an essential feature of it – a brief interruption that strengthens the conditions for the final boom to come.

Recessionary Phase (Years 15–18): The recessionary phase is the point at which the speculative bubble finally breaks. After years of accelerating land-price growth, increasingly fragile credit structures, and the widespread belief that property prices ‘can only go up’, a trigger event arrives that the system cannot absorb (my emphasis).

It’s hard to remember the mid-point recession of this cycle as the response was immediate and overwhelming, setting up for the final push. I remember working at a tech company in 2019 after leaving mortgage proper to help them create a data center directory.

Every company in corporate America is required to have a Business Continuity Plan which necessitates back-up locations for data and operations. For some time, building these colocations were all the rage, but then more and more institutions started using cloud services and work-from-home technology for operations. Instead of having to work at a colo site, after Covid, you could simply boot up from home. Although in banking it took time to convince many to use AWS or Azure, once they adopted it, they did so quickly. No longer were those old server farms necessary. AI enters the scene and puts data centers back into play. However, that growth has started slowing as well. I’ve discussed in my post about New Albany and in various other past deep dives just how much the speculation in housing centered around the speculation over tech. Many of our boom cities were birthed on the back of tech, claiming they were the new Silicon Valley. Austin, anyone? And the list goes on and on from Denver to Charlotte to Syracuse to mention a few. These two narratives worked to reinforce one another on the way up, increasing “wealth effects”…it is looking they will do the same on the way down.

The Bank for International Settlements (BIS) published a warning recently in a paper entitled “Progress and Peril.” The BIS argues that over the past twelve months conditions have worsened. While the economy absorbed the tariff shock, the conflict in Iran has “cast shadows over the global outlook.”

The BIS noted that previous episodes in which very large sums were quickly invested in new technologies-such as canal construction in the 1830s, British railways in the 1840s, electrification in the late 1920s and the dot-com boom of the late 1990s-all led to busts with severe consequences.

While the early stages of AI development were largely funded internally, the increased scale of investment plans has led to a greater reliance on borrowing. That means that a bust could destabilize the financial system, particularly since it could spread to firms that build data centers and supply hardware.

The hyperscalers were funding with their own cash, but their wallets are getting light. Those above-referenced historical, speculative booms such as the railroad buildout are also discussed in the Land Cycle Paper. In the months to come I will be studying the land cycle in more detail to understand exactly where we are. Prices did not bottom until 2012 during the last cycle, but YoY corrections started in March 2007. The prior land cycle correction started in November of 1990 and bottomed in December 1991. Due to all of the intervention post the GFC those prices took longer to bottom so I want to spend a good deal of time studying prior cycles. My gut tells me we may be in late year 17 or even early 18 as the cycle is actually 18.6 years. Watching all the signals converge that we discussed above tells me that we are further along than year 15, but I will know more after studying this in depth. At a minimum the land cycle theory is just another lens, another perspective which informs, deepening our understanding.

Last week was action-packed so you may have missed new home sales. Those results reinforced what we saw on the existing home sale side: the 2026 selling season has been a real dud. Combined sales (existing + new) are running -0.76% behind 2025 year-to-date (YTD). You know, 2025, the lowest year for existing home sales going back to 1995? Today Case Shiller for April came in negative MoM seasonally adjusted, and the FHFA price index also showed a MoM decrease...during the season. As I said in a post on xTwitter, seasonality has taken a backseat for both delinquency and home prices. In addition to receiving new home sales data last week, we had much drama around the signing of a rare bipartisan bill on housing. Below I will share my thoughts on the drama and that bill as well as other proposed legislation which all worked to keep from tanking after new home sales results. Lennar learned last time that cozying up to Washington was the play. Based on these new home sales results analyzed in depth below, the builders have dark winter(s) ahead. After today, the selling season and Q2 will be in the rearview. New York, Philadelphia and Pittsburgh joined Boston and hit their highest listings for sale in my tracking last week. I started my weekly tracking in January 2023. I of course review those inventory levels in historical context, but this signal tells me that homes are not clearing. Instead, inventory is building which has meant elsewhere lower prices are on the horizon. With the season behind us, watching inventory levels will be my summer pastime. Finally, I will provide an update on private credit which is again in the news as well as discuss an interesting Fed paper on the leveraged bets in the Treasury market.

Let’s begin…

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Up, down, up, down we go. Perhaps you chose to focus on the future of space exploration instead since my last post, ignoring politics and the economy as the rollercoaster is just too jarring. The build-up to the SpaceX IPO was a sight to behold. Newspaper articles talking about the 4,000 newly minted millionaires or Musk’s net worth at a trillion abounded. Meanwhile, tales of grocery store baggers and Uber drivers trading tips and dreams of making it rich through the IPO circulated in the airwaves as retail excitement grew. The juxtaposition of the ebullient exuberance with the hard realities of the lived experience of many Americans near the bottom of our K-shaped economy is surreal to see. Even those at the top of the K feel that the political and economic systems are stacked against them:

While middle- and working-class Americans signaled the most economic strain, the pessimism felt by the upper classes stood out for having worsened, despite the ways the economy has favored them (my emphasis). Nearly two-thirds of people who consider themselves upper class or upper-middle class have $150,000 or more in annual household income, including 25% with incomes above $250,000.

The media has done its level best to ensure we are fighting with one another, but what this survey shows is that even those who have been on the receiving end of the benefits do not feel good about the future. The degradation in the faith of an achievable American dream for our youth should scare the pants off politicians and bureaucratic leaders. While those 4,000 lucky SpaceX employees may have struck gold, most Americans will not benefit in the booty generated in this Gilded Age. Let’s be honest, though. Likely those 4,000 have already leveraged their future. I’ve seen it so many times before. The money guys find them early and ensure the soon-to-be millionaires have all the access they need for their new house with multiple garages, their boat, their cars. By the time payday strikes, there is nothing left but debt service. For those that live in reality, I offer Exhibit A and a good thread that provides a more cautionary perspective on prospects for “generational wealth” through SpaceX stock ownership.

And then there are those of us who have become completely numb to world skirmishes and schizophrenic markets, choosing instead to follow the World Cup and/or Freddy from Germany who is traveling the United States, experiencing and tweeting about all of our wonderful weirdness. I have said many times - and I believe this absolutely - to love our country the way it should be loved, you have to take a road trip across it. I can admit to enjoying these posts as well as some of the games. It’s interesting to think of our world history and watch these matches at the same time. Watching the Norwegians gave me an appreciation for those who had to see the Vikings come to shore. S c a r y.

Since my last post, the Nasdaq is up 3.14% but has not yet reached its former peak. With three weeks behind us it seems likely that June will get its act together and summer will take on its normal hue of fairly green trading as traders and the like escape to the Hamptons or some such place. What does that mean for housing? The housing season unfortunately does not look like it will break-out from the doldrums despite some headlines claiming otherwise. For perspective, May existing home sales non-seasonally adjusted came in flat YoY and were up 9.6% MoM. This is the selling season, and sales should be surging from April to May - on average since 1999 by 10.36%. This “surge” was less than the average and was the 4th worst May behind 2009, 2011 and 2020. Standalone existing home sales YTD are now 0.71% ahead of 2025 but -2.07% behind 2024. The National Association of Realtors (NAR) followed up existing home sales with a positive Pending Home Sales report containing overly-positive commentary. I’ve mentioned here several times how I watched my former leadership read similar headlines from 2007-2011, believing each month in the industry “insider” hot, delusional take. Pending Sales should be up both YoY and MoM. Last year we were in the middle of the fallout from the Tarriff Terror and rates were indeed higher. 30-Year Mortgage rates averaged 6.81% through May of last year compared to 6.23% YTD through May 2026. Sales of course should increase MoM from May to June as the season historically reaches peak sales in June. I promise when the housing market shows signs of sustainable thawing on a national level you will be the first to know.

As always, the particulars under those statistics tell the true tale. Below I will discuss all the gory details found in the NAR data including the regions that are looking shakier and shakier. Slow and steady she goes but the path remains clear until our affordability issues are addressed. Speaking of affordability, many have conjectured just how much immigration contributed to sky-rocketing home prices. A recent study from the Dallas Fed makes some interesting observations which we will review. In addition to May M3 regional sales, price, inventory and delisting (new metric) results I’m also providing a detailed analysis into market strength for the 29 markets I track across the country with populations over 500K. Clear themes are emerging, and we are reaching the point where more tangible assessments can be made about the near-term prospects in these markets based on fundamentals such as number of underwater properties, for-sale and rent inventory, tax liens, auctions and pre-probate notices (a link to the data will be provided). And, finally, for those interested in Commercial Real Estate, I will share my recent findings from a review of the state of things in student housing; an asset class once seen as untouchable.

Let’s begin…

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As humans we often think in seasons - the ones we experience from a climate and holiday perspective and the ones we experience as periods in our lives like middle age. If you love literature as I do, you may be familiar with the saying “the winter of discontent” or the novel written by John Steinbeck of a similar name. In the quote from Richard III, Richard, the young Duke of Gloucester, is professing his dissatisfaction with peace, preferring instead the chaos of war.

And all the clouds that lour’d upon our house
In the deep bosom of the ocean buried.
Now are our brows bound with victorious wreaths;
Our bruised arms hung up for monuments;
Our stern alarums changed to merry meetings,
Our dreadful marches to delightful measures.
Grim-visaged war hath smooth’d his wrinkled front;

Now that war has passed, he finds himself bored and vows to stir up chaos and “prove a villain.” Richard seems well-suited for our current season.

Tis not the season for declines in the stock market. For those that missed Friday’s action, the Nasdaq Composite declined by 1,121.53 points or -4.18%, led by losses in the below, pictured stocks.

If you recall, Nvidia was on a relentless march last year - its stock price rising from $135.13 on May 30th to $157.99 by the end of June. At the time, it’s rise seemed to exemplify a seasonal frenzy in the markets which were “healing” from the Tariff Terror in April. For perspective, since 1971, the Nasdaq has only seen a negative YoY variance in June 11 times since 1971, one of which was June of 2022.

Source: FRED

Now, of course it is still very early in the month and the rollercoaster we have all been on is likely not going to end soon. However, the historical perspective and context is useful. Guess what hit an all-time high in June of 2022? Average gas prices. Per FRED, the highest average gas price we have seen since 1976 hit $5.058 in June of 2022.

Source: FRED

Interesting, right? Just another data point, another view to consider.

The narrative machine on the other hand must be wicked tired from its recent, relentless efforts to provide an alternative perspective on AI; a perspective which many of us, including my pal Nobody Special, have been talking about for some time.

From Starbucks ditching its AI inventory system to Fortune’s article discussing how using AI is more expensive than humans, the narrative-busting articles are coming fast and furious. You may remember that I have discussed here several times that most of us in Fintech knew that the tech was more expensive than humans back in 2022. So why was that lesson forgotten even as the costs grew? There was just entirely too much money to be made.

Bonds joined the party with yields rising across the curve, forcing the 30-year mortgage rate to hit an ominous 6.66% at close on Friday. Bitcoin also sold off and has now lost all of its gains since Trump was elected. All in all, Friday was one heck of a session. The ironic thing? We received a “favorable” jobs report on Friday. For those who are avid market watchers this wouldn’t be that surprising due to how backwards things have been for years and years (better report=increased chances for rate hike, so lower stocks). For those who constantly tell me “the stock market is the economy, and we should all feel great” - well, it might(?) have been a bit of a shock. That jobs report on closer inspection of course was not all it was cracked up to be with the lion share of gains attributed to low-paying leisure and hospitality jobs likely related to cities hiring in anticipation of the FIFA World Cup starting next week.

So much of what has been holding up the housing market in terms of sales price has been narrative and risk asset hopium. If that confidence starts to crumble, then things could deteriorate much faster than anticipated. In looking at the city details for the 86 markets I track, the signs are clear that price drops are continuing to spread throughout the country. And, if you are not seeing outright price drops you are seeing lower sales and inventory increases signaling price drops are around the corner. Below I will share cities where we saw motivated, distressed and depressed selling in April as well as top five city summaries for sales, price, inventory and days on market. In those summaries I list the top and bottom five cities for each category. Preparing these summaries for both “all” of my cities and a subset which includes only the cities with populations over 500K, gives me a sense of shifts in trends. Which city blew the doors off the barn for sales and price increases? I will discuss and elaborate as to why that is not the great hope many see. Remember how I mentioned Boston in my last post? Things are getting spicy there, portending trouble for the Northeast. Additionally, Realtor.com just posted one of the funniest headlines of the cycle which I will review. And, finally, I include a recent piece on the madness in multifamily and the 2026 commercial real estate debt maturity wall. What I lay out in “Multifamily Madness” is yet another reason why the fall and winter seasons could be uglier than last year.

3, 2, 1…

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So what bee is in my bonnet today? As I mentioned last week, Redfin did some massive changes to the free data they provide. I had to go back to the drawing board on an automated process I built some time ago. Redfin now provides a lot less granularity and has made things incredibly difficult to pull. Why would they make something so hard that previously worked seamlessly? Stupidity? Their new parent not down with being that transparent? Once I figured out how to pull and calculate most of the data I previously pulled, I was feeling pretty proud of myself for cracking the nut. Then, I turned to my national tables and noticed something very, very odd. The median sales prices and number of homes sold going back to 2012 were way lower than what was published previously. Some of you may recall that I had made a prior attempt to understand why their sales numbers were always higher than what the National Association of Realtors (NAR) and the Census combined reported? If they were pulling those additional sales from public record that would help me prove my private note theory. If you are new here, I believe NAR is missing some transactions due to the rise of private listings, social media and the private note market. The statement on Redfin’s methodology had changed on their website and was more vague than what had been stated in the past, so I couldn’t be sure. I received no response.

This time around I decided to take the social media route. Yesterday, I posted a reply to their original post about the changes to the data center. I assumed that I was missing something. I always first assume I’m missing something. My second assumption was that maybe they didn’t realize they were pointing to the wrong table in their backend database. I had a feeling they would respond by saying “send an email to the help center,” but I got no response. I finally did some posts about it that got quite a few views but still no response from Redfin even though the bot or offshore agent responded to other folks who posted questions.

If I compare the old, seasonally adjusted single-family residential median sales prices to the new ones, the average difference is $44,307. In other words, on average the sales prices are $44,307 lower than previously reported going back to 2012.

If I compare the old single-family residential non-seasonally adjusted to the new dataset the average difference is $44,178.

In the old data series, Redfin provided the breakouts for single-family, condos, townhomes, multi-family (2-4), etc. In the new data series, there is no breakout. So, I also compared the old “all residential” to be sure I wasn’t mixing apples and oranges. That average difference was only $33K.

My next thought was that perhaps they removed any new home sales? That was why I had accepted that Redfin prices were always much higher than what NAR reported for existing home sales. When looking at an average though of new and existing median sales price numbers Redfin came in around $12K below that average. If you can’t tell by now, I have studied these numbers extensively doing side-by-side comparisons and calculations to try and understand trends and patterns. I have discovered things in the Redfin numbers I haven’t shared that pointed to some modeling off other series like Case Shiller, NAR and Census. Because I could not prove it absolutely, I filed it away.

What I would love is a discussion with their team to understand these new numbers. My best guess is that they did some sort of normalizing exercise where these prices are modeled using new and existing home median sales prices or Case Shiller. The problem is I have no idea, and now 14 years of history have changed which is so reminiscent of when NAR had to restate its numbers in 2011 after getting called out by CoreLogic. It’s also eerily similar to when the Census radically revised five years of history wiping off $36,800 from the previous new home median sales price peak recorded in October 2022. Some of you may remember when I found Realtor quietly restating the median list price they provide to FRED with no note or explanation. Had they not, median list price would have gone YoY negative last June. Anyhoo, for Redfin median sales prices to now be below what NAR is reporting - well that is indeed a change.

Old Data

Could I still be missing something? Absolutely! I just want an answer. I’m sure their clients got some sort of explanation but not so for us data nerds in the wild. Also, I wonder how many people actually noticed because many analysts only look at % changes versus whole numbers? Who knows, but here we are. The end result is that the single-family median sales price Redfin provided in their March data set was $457,756. That median sales price is now $390,000 per the new data set. By the by, that new Redfin March number is very close to the new home median sales price for March which got slightly revised up to $391,100. Loud sigh. If I do hear from Redfin, you will be the first to know.

Moving on as one has to these days from yet another unpleasant realization, new home sales went right back into the dumpster after showing some strength in March, down -10.77% YoY and -7.94% MoM. In fact, April sales were -10.52% below the April average going back to 1999. Why pray tell? Based on their April median sales price of $422,500, they did not do enough price cuts to move the needle. This seems to be the builder pattern: a strong month using incentives and price cuts and then an abysmal month where prices go higher. The pattern is now very clear in all the data that lower sales mean higher prices.

Below, I will discuss those new home sales in detail as well as provide an update on delinquency. ICE begrudgingly confirmed what I saw in client books for April, and it ain’t good. As promised, we will also make a stop in Columbus, OH for a market deep dive. Many people miss the AI-adjacent speculation which has occurred in the Midwest that worked to continue to fuel sales price appreciation. By looking at regional results for M3 cities (detail provided below), sales in the Midwest have been the lowest of all the regions for the past three months. Inventory is growing there at the highest YoY rate (+7.33%) of the four regions, outpacing the Northeast (+5.92%) which is also approaching its housing market turn (watch out Boston!). New Albany and Columbus combined illustrate the marriage of real-estate speculation with datacenter mania. At the end of the day, the datacenter story is really about real estate as discussed last week. In my review of Columbus’ history I also discovered that a famous family has roots in Columbus which provides interesting context to the datacenter discussion. In addition to the regional results, I will share combined sales results for April. With the revisions, we are running -0.78% behind 2025 YTD for combined sales. Finally, you will also find one of my recent articles written for on the Freddie Mac multifamily securitization performance results which led to yet another very interesting data discrepancy discovery.

Let’s get going…

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How bizarre is it that what purportedly “saved” the economy is also forecasted to largely replace the worker? When almost 70% of GDP in the United States relies on consumption, how exactly is that going to work? While I disagree with the tech talking heads on timeline and scale for AI to create the efficiencies imagined, they’ve convinced quite a few that this is the case. Yes, yes, our technocracy dreams of universal basic income (UBI) and days spent painting or doing origami, but how realistic is that really? And, have you met humans? What happens to them when they don’t work?

The labor force participation rate peaked in 2000. Since then, it has fallen significantly. At the same time deaths of despair have increased to the highest level since 1900.

Deaths of despair are defined as “deaths by suicide, drug and alcohol poisoning, and alcoholic liver disease and cirrhosis.” What pray tell could cause such despair? When I visited San Diego’s homeless encampment, O-Lot, and talked to Anthony, he told me how grateful he was that he had a tent. However, he really wished the O-Lot operators could help him find a job. That wasn’t on the agenda. You get paid by unit in the public/private social welfare schemes here in the U S of A which means Anthony staying in that tent matters more than finding him a job so that he could actually forge a pathway out of homelessness. The perverse incentives that permeate our day-to-day existence mean that we are spinning our wheels in what feels like hell. The rich get richer, the poor get poorer and reality resembles a horror movie.

While the technocracy celebrates the move to this dystopian future, our students have something else to say. At a recent commencement speech, Eric Schmidt, the former CEO from Google, got mercilessly booed when he mentioned AI. It cheers me to know that our younger generations will not sit quietly while the top 1% continues to rape and pillage the system. The more research I do into this datacenter boom the more I realize how crazy it really all is. Some newcomers may be wondering why I’m talking about AI in these pages. The datacenter story is truly a real estate story despite how it’s being peddled. A good deal of our speculation in the housing market as well is due to carpetbaggers drooling over boomtown profit possibilities. Every city surrounding these projects has seen increased speculation and building. The Midwest in particular became seriously infested between 2023-2025 as investors saw it as the last frontier for fix and flipping due to lower home prices.

Today’s post will feature a look-see into New Albany where it all started for Ohio in particular. When on my last trip enroute to Nashville I happened to stop there by accident, forgetting that New Albany was the location of the Intel project I had been tracking since 2022. When I’m on these trips, I don’t plan ahead as I never know exactly where the road will lead. I’m often punching locations into my Bonvoy app while driving 70+ mph to find the nearest spot when I’m ready to stop. I prefer Courtyards because they (should) have a food option, and I’m often too tired to leave the hotel. I arrived in New Albany at dusk, following one of those dazzling orange-red Ohio sunsets, and was surprised at how many folks were hanging in the Bistro. In the spots where I stopped previously on this trip, I had been the lone customer in what felt like empty hotels. I asked the hotel manager why it was booming, and she replied, “datacenters.” She proceeded to tell me that it had been like that for three years. She pointed to a gentleman in a large cowboy hat who I had previously heard telling a fellow traveler that he was from Texas, “he’s been here every week for three years.” Seemingly, I had stopped in one of the few places in the country which was still booming. Many of us have seen the charts and figures that show the only thing holding up the economy is AI which was perfectly illustrated by the scene I encountered.

Before we get to the meat and potatoes of today’s post, let’s review April existing home sales which were nothing to write home about. Side note: for those paid subscribers who filled out the form to receive breaking news alerts for existing and new-home sales, expect your first email when new home sales are published on May 28th. Existing home sales of 354,000 in April non-seasonally adjusted were up 1.43% Year-Over-Year (YoY) and 7.60% Month-over-Month (MoM); #4 for the worst April since 1999 behind 2009, 2023 and 2025. Seasonally adjusted, sales were up 0.00% YoY and 0.2% MoM. We were deep in the tariff tantrum last year and stocks were taking a beating unlike this month where we saw an all-time high in the S&P, so minor improvements are to be expected. Nonetheless, existing home sales YTD are only running 0.78% ahead of 2025 (worst sales since 1995), but -1.68% behind 2024. The 27-year average for April existing homes sales is 444,500; sales are -20.36% below the average. The average increase in existing home sales from March to April is 8.83%, so this MoM increase is below average. Looking through the prism of our last housing crisis, existing home sales of 458,000 in 2007 increased 5.05% from March to April. April 2026 sales are -22.71% lower than April 2007. In 2008, existing home sales of 364,000 increased 15.19% from March to April. April 2026 sales are -2.75% lower than April 2008; YTD sales are running -0.59% behind 2008. The median sales price for existing homes in April was $417, 700; March was revised up slightly to $409,100 from $408,000.

The median sales price was up 0.89% YOY (compared to last month at 1.41% YoY) and up 2.10% MoM; on average since 1999, existing median sales price increase by 2.36% between March and April. According to NAR, existing home supply ended March at 4.4 months of supply, versus 4.2 months in March (revised up from 4.1).

Below, I will discuss the regional differences in sales as well as the signals from the distribution of sales by price. These details provide clues as to what’s next for the areas of the country that have not seen widespread YoY price declines. As mentioned, I will share my research into New Albany, OH, its numerous datacenters as well as what this could mean for housing and the economy. Want to guess which famous mogul is behind the industrial park there? It’s spicy. And, finally, I’m excited to share that I will now be posting the commercial real estate articles I’ve been publishing at here. The crew at Unicus has generously given me permission to do so. For those interested in their detailed analysis on markets, I recommend their Confidential Insights reports. My readers will receive a 20% discount. I encourage you to check it out and if you wish to subscribe, please fill out this short form. In addition to my New Albany analysis, you will also find below my recent article on private credit and its tentacles, which are tightly wrapped around this datacenter boom.

Without further ado…

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3,195 miles driven, thirteen states and eight hotels…that’s my last two weeks summed. Having several commitments in the East and few options to make it logically work from my regional airport, I decided it was time to see what I could see from the road (again). Those I’ve related this to look at me as if I’ve grown an extra head. Worth it, it was, due to the critical intel I gathered while on this last trip.

I took my very first cross-country road trip from Mississippi to California for Christmas when I was five years old. I would be 19-years old the first time I was behind the wheel - adding in points northwest such as Wyoming, Glacier and Seattle. You might say it’s in my blood. My grandmother was known to drive from California to Mississippi by herself with only coffee and cigarettes to fuel her. I don’t partake in either, but I do make sure I travel with plenty of Earl Grey.

You can see a lot on the road. Things you cannot see if you fly in, grab an Uber and go straight to your destination. If you are super-observant and decide to look up from your phone as your Uber transports you to your destination instead of catching up on email and texts you missed because the internet was spotty on the flight, you will notice all the cranes and traffic. However, much of what has happened in this country post-Covid is hard to spot based on those quick trips. Let’s say you are flying to Phoenix to check out a development site there. Due to the walls along the highways constructed to reduce noise, you have no idea what’s going on behind those walls. Unlike, say, driving from Austin to San Antonio where you can see almost everything from the highway. You cannot of course though see the sheer madness of Round Rock, TX where there is a new-build subdivision on every block unless you exit the highway. If you are “prospecting” either to invest in real estate or even write about the market, your guide will take you to their choice spot, likely even oblivious themselves to what’s happening in the rest of the city. In the three years I’ve been posting on social media following my very first road trip, I’ve had to search every data nook and cranny to understand why others could not see what I was seeing. After all that searching, I can say more confidently, they are just not looking. I will leave it to others to ponder why that is.

So, although the road is long and the food is really bad, I do these trips to see firsthand what is happening out there. And, in so doing, I am privileged to also see what is best about our country. The sheer beauty and regional variability in the United States is hard to fathom unless you have traversed it yourself. You also get to talk to real people versus those that pontificate ceaselessly on social media. If more people just did that these days, our shared struggle would be so obvious empathy would be involuntary. On the road, you encounter those that are plugged into the corporate cortisol machine forced to believe that a life constantly moving and shaking is “a life”. Never mind that although their high-stress job ensures they can pay their mortgage on that fancy house, they never stop to enjoy it for more than a couple of days a week. You also see those that are working twice as hard as their colleagues in low-paid service jobs, desperate to retain their job and feed their kids or pay for school. On the other end of that spectrum, you come into contact with those from the younger generations working in service jobs who struggle to properly function. They have trouble completing the simplest tasks. Any variation to the three things they’ve mastered causes a complete crashout. They can’t look at you or engage in small talk. What you see above all is that if we don’t change our ways soon, something beautiful will be lost. And, by the by, you get to see wonderfully weird and unexpected things such as a dozen General Lees and Rosco’s cop car traveling west on I-40 for the Cooter’s Hazzard Run from Pigeon Ford to Nashville.

What a welcome flashback to fond, childhood memories of the Dukes of Hazzard, especially Uncle Jesse. As the war drags on, I’m reminded more and more of the 70s. No matter the latest barbs being traded on cable news, this situation with Iran is serious. I recommend this episode with Christine Guerrero on if you want to understand the impacts we will feel even if the war ends today. Christine is a straight shooter and a petroleum engineer. Engineers have a very specific way of thinking that I believe is helpful in times like this. If you want to travel back in time and watch a clip which could inform our potential future, check out this Johnny Carson monologue from 1973.

Just because I decided to do my own mini, modified canonball run, breaking news in housing and credit did not downshift into neutral. After looking at March Redfin and NAR results, I thought we might be setting up for a completely frozen spring again. The price weakness was showing but the lower sales in many areas was continuing to cause price contortions. The trend was completely obvious in March results as cities with the highest median home sales price increase were the ones with lower sales. Then, we got some very interesting data from multiple sources that makes me think things are indeed speeding up despite the seasonal price firming we saw in results reported from NAR and Redfin.

Before we begin, let’s quickly review some of the important, recent developments in banking and credit. When the world runs on debt, the credit corner is one where the floodlight should be fixed. While I was on the road, we had our next installment in the series entitled Bank Failure Friday. Community Bank and Trust, a small Georgia lender, was closed on May 1st by the Georgia Department of Banking and Finance. For a deep dive into what happened there, I highly recommend Nobody Special’s recent video. There are two very important takeaways from this bank failure which will cost the FDIC insurance fund $97M. Firstly, unlike with SVB, the FDIC is not defacto covering deposits over $250K. Additionally, likely what caused Community Bank and Trust, who participated in government-guaranteed USDA and SBA lending, to get in over its skis, was a misguided faith in financial “innovation” and automated underwriting. I have been warning about this since 2022. We cannot completely Henry Ford credit. Those automated systems can be easily gamed. The lack of real oversight also means that no one is catching the issue until the loans stop performing. One reason that we have yet to see the real warts and fraud in FHA (gubn’t subprime) is because of that overly aggressive partial claim program where you were able to go back to the till over and over again…and our investors did just that. Those fraud bombs are incoming. As stress begins to mount in the agency prime books this will become more and more obvious, and all that credit quality gospel singing will be revealed for the performance it truly was.

Speaking of performance - at an event in NYC, I got to hear the private credit party line from a famous Wall Street personality. When you know the “what” is not accurate based on your own research, it’s actually fascinating to watch “how” they deliver the message. There is a specific cadence to it that I’ve now programmed into my BS detection meter. The problem with the current demand that you believe private credit is not a systemic issue is that most of the analysis is focused on the software sector only. Firstly, many of these analysts discussing the topic would not be able to code their way out of a paper bag so they don’t understand any of these investments. And secondly, private credit played everywhere, especially in real estate. Commercial real estate in particular caught their eye. So, when you get news like the below, you have to pay attention.

Our financial system is a highly connected organism. Just like the root system that supports the trees in your front yard, an entire universe is hidden from view. Private credit may not end up causing a systemic failure, but anyone who acts certain that it won’t should be considered highly suspect. Certainty in times like this is foolhardy.

The entire system hinges on us being able to buy stuff. As prices and input costs stay elevated, many consumers will no longer be able to buy stuff. Those companies that are not able to largely pivot to luxury consumers or absorb higher costs know this too well.

McDonald’s miss in sales expectations today also illustrate just how stretched the consumer at the lower end of the K is.

Source: University of Michigan

At the moment, the bottom third who does not benefit from all-time highs in the stock market are much worse off than a year ago. Remember, though, this is the picture as of now when most are in no way pricing in the true risk from the war in Iran. Fertilizer shortages and forthcoming increases in input costs mean higher food prices in the future. Additionally, as more and more consumers tap out due to layoffs, increased property tax and insurance and failed investments, the conditions will deteriorate even further. It’s not just large companies closing. It’s small(ish), family-owned businesses as well.

Want to guess where one of the stores Lammes has closed is located? Hint - I mentioned it earlier. Okay, okay. I won’t make you work: Round Rock, TX.

It’s all connected. Looking at one or two data points in isolation will never show the true picture. Nonetheless, THE data point many in the housing industry hang their hats on just printed its lowest YoY increase since 2023.

Source: FRED

As a reminder, the Case Shiller index is significantly delayed, uses repeat-sales, excludes condos and new homes and is a 3-month rolling average. No matter which way you shake it, the trend here is clear. For those banking on rate cuts to save the housing market, rising prices will have something to say about that. What we really need is lower home prices and good jobs. Bankruptcies large and small will not help with the employment picture. We might see a moderation in this decline during the season as we did last year but based on other data received which I will discuss below, this series is likely set to go negative by Q4 2026, or sooner.

In a recent interview with , I could not contain my nerd excitement about changes or anomalies I’m seeing in two different data sets. My excitement of course is not about the trouble ahead, but more about a breakout in pattern. Believe it or not, I taped that interview prior to us receiving new home sales (finally) for February and March. Boy howdy did those jolt me out of my seat. For some time, I’ve been making the argument that higher sales will bring lower prices. We’ve often seen evidence of this, but these results were loud and clear. Below, we will delve into those new home sales results as well into the Freddie Mac home price index which also surprised. Additionally, legacy media weirdly and finally picked up the default thread. Why now and what’s to come? What many fail to comprehend is that our economy is fueled on growth. Just meeting last year’s metrics does not suffice. In housing, home prices have to climb to keep the shell game going.

Low volume will not adequately feed the machine such that higher prices are sustainably achieved. When housing is no longer affordable for most of the market, including investors, there is no path to continual price gains. When demand looks like the below, hope is not a strategy:

Yes, those invested in rentals might find the above encouraging. However, your declining rents, increased costs, rising vacancy and inability to cashflow should temper that excitement. Finally, I will share the M3 Price Tracker as well as lists of cities where we are seeing motivated, distressed and depressed selling with cities in the Northeast making the lists. Inventory in both the Midwest and Northeast continues to grow at an accelerated pace. In cities like Stamford, CT and Portsmouth, NH low inventory isn’t even stopping the price declines.

Let’s not tarry…

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— Henry Mintzberg

With each mile I clock across this great country, I realize just how destructive economic models and purported aggregate data can be. Sitting in a room full of folks who have taken two, maybe three data points and created an entire worldview is at first confounding but then enlightening. My background meant that I always had to find where I fit in these constructed realities. I learned to listen very, very carefully. I read and spent hours trying to understand experts and their theories but also sought to perceive how those ideas and theories played in the real world.

My very early childhood was filled with books and adventures in creeks and on the backs of four wheelers traversing my grandfather’s farm. Things changed drastically for us when he lost his farm. He most certainly made grave errors, but he also followed the government piper down a path of destruction based on assurances that he should plant, plant, plant. Like most he got duped into believing a temporary boom was going to be a long-term boon. My family went from landowners to trailer trash in the flash of an instant. Thus, I’ve always walked a line between both worlds, and I can talk to just about anybody.

When I go on these trips, I’ve learned to listen to those who are not trying to sell me something. You want to know about an area? Don’t ask a realtor. Ask the barista at the coffee shop (but make sure they aren’t also a realtor). Ask the dry cleaner. Ask the hotel manager. You want to know about an important person? Watch the way the staff acts around them. Talk to their aides, their assistants. Observe them when the crowds have left. Who is performing? Who is authentic? It can be very difficult to tell, and just when I think I’m getting good at it, I realize that our innate ability to deceive ourselves means that it is often very difficult to assess if someone is outright lying to you. Typically, the liar believes their own lies. They are lying to themselves. That’s the danger.

How can we know we are not one such person, that we are not deceiving ourselves? Stay curious, stay flexible and constantly seek to understand that which you don’t understand. And, no, you cannot just ask the folks who look like you to confirm your understanding. You have to ask the ones that don’t look like you. I will forever be amazed that anyone thinks they can understand something just by modeling it. We don’t live in a lab. We live in a dynamic, constantly changing environment. If the data does not match what you are seeing in front of your eyes, then the next logical step is to understand the data and its limitations.

At the recent housing policy conference I attended, Jon Brooks and I presented our alternative data debunking the inventory shortage myth. To say that we were the minority among the presenters is putting it mildly. Just to remind everyone - we absolutely have a shortage of affordable homes, just not housing units. To understand why there was one dominant, unyielding perspective though you have to understand the pay-to-play system. The summit has been reached, the few who were early in the know or properly trained have arrived. The others are looking up but don’t have the juice to make it to the top. Fresh sherpas arrive with promises of government subsidies for their failed efforts. Or, in some cases, those who were casually observing the activities from below realize that they could hitch a ride with those new sherpas on their rescue mission and make some bank. You want to get in on the government grift? Find yourself an “expert” with an appropriate stat to support your position. Then you can convince policymakers that your solution is necessary while donating to their campaigns and supporting their support of your scheme. It’s just one big party!

What did I learn on my last trip? Despite unbelievably sluggish sales, the hammers keep swinging to build homes that no one can afford all across Florida. Based on a “secret shopper” trip to a national developer’s site in Lakewood Ranch I learned that the sales reps continue to lie through their teeth. They don’t bother to source data. They repeat a script. If you provide an alternative data or perspective, they just tell you that the data you are describing is wrong, while flashing their pearly Veneers. The guy at the sales center is just like the guy presenting at the podium - they are selling you something. If we fall for their act, we will be the worst for it.

The most important thing I learned this week did not come from listening to “experts” but came in a conversation I had with an individual who currently lives in Florida and is trying to convince his aging father with dementia to reduce the price of his listed home. His father resides in a retirement home but continues to hold on to his listed price despite the quickly changing facts on the ground. Although I often talk about the rage delisting we saw in 2025 this conversation provided much-need nuance. As this individual described his father’s behavior even after seeing two other nearby homes go for less, I realized this was about far more than just simple ego and pride. A patriot and Vietnam veteran, the house represents his legacy, what he will leave behind to his children. His stubbornness is not borne of the vitriol oft lamented on social media, fueled by the algos. Losing your reality, your free will, your agency just a little more each day is a special kind of hell. I see this brutal theft of agency each day watching my mother who suffers from dementia as well. She also represents the other side of the algo-driven divide. After working her adult life as a nurse, she is virtually penniless. Having never accumulated enough wealth to protect her in her final days, she relies on my sister and me to ensure her basic needs for food and shelter are met. When you start out from behind, it is almost impossible these days to win the race. And, when we are obsessed with naming, classifying, othering - our shared humanity is lost.

Each of you read this newsletter for a personal or professional reason. Some want to own their first home, some want to find and manage investments and some are just curious about how housing impacts the economy. No matter the reason, if we all step back and realize that denial is not the same thing as eventuality, perhaps we can take a collective sigh of relief. Despite all these salesmen telling us things that are not true or devising spurious estimates based on lab-grown assumptions to enthrall us, there are simple truths that we cannot deny. The majority of our homes are owned by individuals born between 1946-1964, putting them between 62 to 80 years old. This cohort was also the largest buyer cohort in 2024 at 42%, according to the National Association of Realtors (NAR). Never forget that many in this cohort also own the long-term rentals out there. In the United States, average life expectancy is 79 years. According to the Census there are 61M people over 65 in the United States.

I’m working on a very detailed demographic study based on state-level vital statistics so we can understand the timing and impact of these eventualities, but for now let’s do some napkin math. If we assume that only 65% of the boomers own homes using the nat’l stat for owner occupancy and that they only own one home which we know is not true, then we can approximate there are roughly 40M individuals who own their home. In 2018, the National Association of Realtors estimated that 1 in 5 homeowners over 65 own a second home, but we will ignore that for now. The average household size is 2.53 according to the American Community Survey which means that based on this very rough math over 15.7M homes will come to market over the next several decades. While there are definitely some in our technocracy that believe they can cheat death, it is just not so. If you’ve never read Simon Sinek’s The Infinite Game, I highly recommend it. The gist of the book is that once we realize we all will lose the ultimate game, we will get busy living the infinite game to forge a much more meaningful life and a better life for those we leave behind.

On the other side of the equation, we are no longer growing the way we once did. In 1960, our fertility rate was on average 3.65 births per woman in the United States. As of 2022 we averaged 1.67 births per woman.

Immigration has also slowed significantly. Make a note to yourself when looking at the below graph that these numbers cutoff in July of 2025, meaning that they do not represent the full deportation picture.

Inevitably by this point, someone will start talking about the age of housing stock or how we don’t have the right housing stock. Precisely. That’s why there is no national solution. People have to go into the field and assess each area individually: the inventory that currently exists, the current demographics, true growth potential and then what if anything besides a bulldozer is needed to meet the area’s needs. So far what I’ve seen in the tens of thousands of miles across the country I’ve driven is a lot of building in some areas and a lot of vacancy all over the place. The aggregate vacancy figures and permit data are just not adequate to assess the situation. I can’t tell you why exactly. I can think of issues with data gathering that might cause it like certain areas not requiring permits or not being included in the permit gathering process, but there are no easy answers. The work has to be done. As I offered at the housing policy conference, I’d happily take someone on a tour so they can use what they learn to validate/invalidate their assumptions. By the by, this farmhouse was built in 1900 and is sturdier than anything I’ve ever lived in previously.

In other news, this week we received an interesting headline from the industry.

While I might quibble with Realtor’s assessment that the market is thawing because we would need an actual material increase in sales for that, I did find it interesting they were highlighting a 14-Week slide in prices. To be clear they just want to get people to crack open their listing site at least. They are doing anything they can to generate interest in home sales as FOMO has run its course in most areas. Just know though you don’t have to fall for their marketing tricks. I often say this but ask any kid who grew up in a modest abode who had happy parents - not ones stressed out by the bills - they will tell you how wonderful their childhood was. The noise may be unbearable, but the demographics are clear. If that changes, I will be the first to let you know.

For today’s post we will make a stop in Kansas City, MO to see the current state of affairs post the big layoff announcement from Oracle. Often viewed as a mini boomtown, what do those increases in YoY sales and listings in Kansas City portend? Will KC hold up the Midwest, or will they join Indy in leading the descent down the rollercoaster? Additionally, my deep dive detail on cities where prices are increasing and decreasing is included below with the Top 5 city summaries for March for sales, price, listings, price cuts and days on market. These are starting to get even more interesting as early trends can be identified. For instance, which Airbnb hotbed in TN is #2 for decrease in YoY sales, #4 for decrease in MoM sales, #4 for decrease in MoM sales price and #4 for highest days on markets for the 85 cities I track? These summaries also show a clear trend that where sales are slowing or lower, median sales prices are up despite price pressures under the surface. A pricey city in the West highlights this perfectly coming in #1 for increase in YoY sales price and #1 for decrease in YoY and MoM sales. In looking at the NE, one metropolitan mentioned previously continues to add inventory at an accelerated pace signaling trouble ahead. We of course can’t leave out the Midwest. You may be curious to know which city in the Midwest was the only city in my 29 cities with populations over 500K with negative MoM sales in March? That city also showed a similar trend with lower sales and increasing prices. And finally, the snowbird season in Florida is coming to an end and inventory growth has started to slow (see story above) as many delist in hopes of…something. Throughout the season (Oct-Apr) prices held somewhat but sales, although higher, did not materially clear the inventory. Now that seasonal enthusiasm is waning, price direction from here should be interesting. In that vein, two large cities in Florida took the top 2 spots in the decreases in MoM prices.

On your mark, get set, go…

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-Confucius

I have a trick I use when the going gets tough. Some may find it hokey, but as soon as I can have rational thought about a problem, I say, “thank you God for X problem.” Even in the worst situations I can always find one ray of sunshine. Last weekend the Newsweek article “misquote” from last November reared its ugly head yet again, making it the gift that keeps on giving. I try never to dwell on slights, so I found this most recent episode highly irritating. Nonetheless, my experience is a valuable lesson for us all.

For those that are new, or forgot, just prior to Thanksgiving last fall, Newsweek published an article which they wrote from merely watching a video I did with Adam Taggart of . Instead of calling me for a quote or even contacting Adam to ensure their understanding of the interview was solid, they just ran with the story. A random person sent me a text that said something about Newsweek. I had no idea what they were talking about. I googled my name and Newsweek and was horrified to see that the writer claimed I said home prices would fall by 50% in 2026. As soon as I saw the article (7 hours later), I emailed the writer to explain in more detail. Newsweek waited two days to correct the article. The correction happened post the Thanksgiving holiday, after folks had plenty of time to argue about home prices over Turkey and stuffing. By that time the correction was made, millions had seen and commented on the article. In fact, Unusual Whales on xTwitter tweeted out the misquote after Newsweek made the correction and that tweet got almost 8M views. At the time, it felt like a painful hit to my credibility, but I was confident that inquiring minds would figure it out. Turn the other cheek is indeed my mantra.

Fast-forward to March and an invitation to go on the (in)famous Bigger Pockets, On the Market podcast. Prior to sitting down to tape that interview, I had already been warned, not unexpectantly, that the host and I saw things differently. I had no idea however that the host still believed I said that home prices would correct by 50% in 2026. In fact, he apparently re-posted something on Instagram I never saw disparaging the take. The kicker? No one on his team watched the actual interview. That of course was true of other housing bulls who went after me even after they knew I had not said it. Some of them continued to do videos on it after being called out hundreds of times by my followers. C’est la vie, I always say. I’d be lying though if I said I did not enjoy a little the moment on air when the host of On the Market realized I had NOT said it.

I turned my cheek and left that March episode in the past, thinking it was surely a one-off. Alas, no. In my last post where I discussed the changes we are seeing within the industry when it comes to MLS dominance, I needed to renew my subscription to Inman, which is self-described as an industry magazine that provides “accurate, innovative and timely information about the business of real estate.” I had found valuable information in Inman, but I also had realized that they largely represented the tech faction in real estate. Recall how I said to be wary of any industry expose as it is typically just a takedown piece from vested interests wanting more fingers in the pie? You can make a lot of money in the real estate game, and everybody wants in. Big Tech realized this probably around 2012-2014 and have been waging war against NAR ever since. At first I cheered it on because I thought we would get better transparency. But then I realized, no, Big Tech was just looking for its nut. Since my subscription was newly renewed, I decided to check out the below article:

I wondered who they would mention as I had no indication Inman knew of my existence. I do know that most people call me a doomer. But guess which claim was featured in the article? Though the article did not mention me by name, it mentioned the claim that home prices would drop by 50% in 2026, linking to the Newsweek article that mentions me and my Bigger Pockets podcast. The podcast link took you to a thumbnail which contained a big ol’ picture of my smiling face. I was absolutely horrified, but this time I was also angry. Didn’t Inman claim it provided accurate information? So, how can you link to multiple sources you never even reviewed or verified? During the Bigger Podcast episode, the host had said something along the lines that if something is in Newsweek, you can usually trust it. Similarly, when I first contacted the journalist at Inman, he did not believe me as he stated his source for the article told him and that there were several articles that said it. After sending the email from Newsweek where they acknowledge the issue, he finally believed me.

Can you see how this works now? In our world today you don’t have to get your facts straight. As long as someone big enough says it then that is good enough for the internet. It then gets repeated over and over and over until people agree that it is true. The journalist at Inman has since apologized and has even offered to interview me - after getting approval from his editors of course - so I can share alternative data. The one sentence in the article that really bothered me referenced doomer claims “as examples of narratives that have gained traction despite contradicting current market data (my emphasis).” That one really got me because I feel like there is plenty of market data that the industry conveniently ignores. Below are some tables and charts I sent him:

FHA Delinquency in January at 13.77% (13.65% of the current mortgage market):

It will be fascinating to see if the editors at Inman are interested. What I’ve found is that they usually are not which is why I started this Substack. The industry will be interested for a hot minute when things turn, but they will quickly go back to selling when the dust settles.

Lest you think I am relating this tale to garner sympathy for mortal wounds I’ve suffered, please know that is not at all the case or the point. Dedicated to constant and lifelong learning I am, and this is just another lesson for all of us. Our reality depends on what algo has our number. This is especially true when you get to trickier topics like politics and war. For those who are unaware that we are living in one of the most intense propaganda battles in history, please check out ’s latest. Matt discusses and details our very human need for a coherent narrative in the face of crisis and how that need is manipulated for control.

Do you remember taking Statistics in school and realizing that you could come up with a statistic to justify anything? Context matters. One of the reasons I believe the industry needs to discredit me is that I work nonstop to provide context so you yourself can discern the truth. That I don’t seek the industry’s approval or recognition and that I don’t take sponsors means I get to write what I want to write about and not what my editors decide is appropriate.

In that vein, what is the signal we should take from existing home sales in March? The headline seasonally adjusted numbers came in -1.00% lower YoY and -3.6% MoM. Non-seasonally adjusted sales were up 3.8% YoY and 26.3% MoM. There was one more business day compared to last year and three more compared to last month. When you look at “sales per day,” sales were definitely lower than March of last year. YTD existing home sales through March are up by 2K, or 0.25% from last year and down -1.93% from 2024. Since 1999, existing home sales on average increase by 31.83% from February to March, so sales this month increased less than the average. The problem with using only the seasonally adjusted numbers is that the analysis always focuses on what is wrong with the modeled outcome versus what happened in reality.

And, what of home sales prices? Each month I try to ascertain whether we have sped up or slowed down on our journey to our national house price correction. This month we received some real clues on that front which I will detail below. I will also share the regional detail for the cities I track to see which regions outperformed/underperformed aggregate sales, price and inventory metrics. You may also be wondering about this headline which made the social media rounds late last week:

Recall that early spring is when we should be seeing seasonal improvement in the delinquency data due to tax refunds and bonus payouts. I will discuss the very interesting delinquency trends I saw in March data and what it means for the rest of the year. If the new smoke I see there turns to fire in the summer, we may have yet another funky fall. In other news, did you hear that the Fed sent out a request for information to the banks regarding their private credit exposure? Despite my previous post on why what’s happening in private credit matters, you may still be wondering why I focus on it so much. One thing I’ve probably not discussed enough is how our Forgotten Americans are also exposed through life insurance companies and the pension system. This topic deserves a novella, but I will touch on it here today so that you can warn those you know who might be impacted.

Once more unto the breach, dear friends…

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Sales in 2023 ended up being higher than what we would see in both 2024 and 2025 by a hair. Mortgage rates peaked in October 2023 at 7.79% with rates averaging 6.80% in 2023, 6.73% in 2024 and 6.50% in 2025.

Source: FRED, Census and National Association of Realtors (NAR)

Remember, since 1971 the 30-year mortgage rate has averaged 7.69%. As you can see above, modest improvements in mortgage rates did nothing to stimulate sales. The industry could not stomach that perhaps home prices had reached a level that did not make sense. Realtors and mortgage originators make a lot more money when prices are appreciating. Instead, the industry focused on Fed actions and purported inventory “shortages” for three years while sales remained frozen. The industry called for lower rates so you could get a lower payment. The problem is that even with that lower payment for mortgage principal and interest your property taxes and insurance are calculated based on your assessed value, crushing affordability. This is why I spent my first year on social media focused on the increases in property tax and insurance that had not yet hit homeowners’ mailboxes. Fed actions were a much sexier topic than taxes and insurance. While industry analysts watched the Fed, I went to where the puck was headed. I could see that Hurricane Ian was going to change the Florida (and national) market drastically and wrote about it here in late 2022.

U.S. homeowners insurance rates rose 40.4% over the past six years, with the biggest increases hitting in the last two years, a new report shows.

LendingTree’s 2025 State of Home Insurance Report shows rates from 2019 through 2021 remained stable, with increases of 2% in 2019, 2.1% in 2020, and 3% in 2021. Then rates started rising in 2022 with increases of 5.4%, 11% in 2023, and 11.4% in 2024.

When visiting the third largest mortgage servicer in the United States they confirmed they had seen insurance increase over 50% since 2020 across their servicing book. Property taxes also skyrocketed, rising “almost 27 percent faster than inflation since 2020” according to the Tax Foundation. At the same time, labor and replacement parts were becoming more expensive which really hurt those who bought sight unseen, waiving property inspections and appraisals, between 2020-2022. Then insult after insult was added to injury with rising electricity costs.

But, but, but rates and inventory!

Mean ol’ Jay Pow must cut rates and the builders must build! Hopefully I don’t have to remind you that Jay Pow does not control mortgage rates as he has said from the podium several times and as evidenced by mortgage rates moving up after the Fed cut rates in multiple instances. As to the clamoring for more building from the elites who circulate at think tanks and focus on dubious household estimates to argue building is the cure to what ails us…funny story. The listings for sale you see above do not include a large portion of the new build inventory. Many of the builders pivoted to building whole neighborhoods of spec homes versus building for any specific buyer. Typically, they will only list one of these spec homes on the listing sites (if that). After visiting hundreds of new-build sites I can tell you definitely there is more inventory out there than is on the listing sites and in the permit data. To illustrate - below you will see listings for new construction for Dallas, TX from Realtor.com who is connected to more multiple listing services (MLS) than any other listing site including Zillow.

Realtor lists 826 new homes for sale while New Home Source shows 16,178.

Now this of course has a lot to do with how each site is defining “Dallas”, but in case you are wondering, the above number for New Home Source does NOT include Fort Worth:

If Fort Worth was included, there would be almost 21K new homes in the DFW metroplex.

With respect to permits I spent a lot of time trying to reconcile those with what I was seeing on the road. I never could and found out that in many unincorporated areas across the country you do not have to obtain permits. Although permits are helpful for macro-strategists, they do not tell the whole story. And, honestly, that is the case for most of the data we receive these days. Is our inventory mispriced? Is it misallocated? Yes and yes. The argument that we need a ton more building out there is not based on field analysis, though. It’s based on models which have dubious inputs.

Despite it being obvious that listings for sale were increasing but sales were not, the industry hid behind seasonal adjustments and the Fed. They still refuse to fully acknowledge the price-to-income disparities, increasing costs and the overbuilding that is occurring. Even if rates come down, property tax and insurance will not decrease unless prices do as well, and even then, there is no guarantee those costs will come down for some time. Cities desperately need that revenue and have resorted to outright fraud in some cases to ensure values remain high. Take Montclair, NJ for instance:

Battles over property taxes are playing out across the country as cities addicted to federal money go into withdrawal, needing to address budget shortfalls.

Now that home prices are not rising at an accelerated pace your aspiring homeowner is not the only one impacted.

Source: Cotality via FRED

Landlords are getting hit hard. During Covid, landlording - as it was in the runup to the Great Depression - was all the rage, but it has since lost its luster. If landlords abide by the law, they don’t get homestead exemptions meaning property taxes are even higher than yours. Insurance and replacement costs are crushing them as well, and this is before they had to worry about additional increases to costs due to the war and supply chain disruptions.

I can vouch for Jon who I met in Jacksonville. I have also been invited to speak to a group of these high-net-worth individuals at Jon’s request which should happen here in the near future.

While the housing market has been frozen for three years much has occurred under the surface bringing us to this moment. These cycles take an incredibly long time to play out. When I first did a forecast in late 2023 so Logan Mohtashami would debate me, I used dozens of current data points as well as historical data to try and arrive at a forecast. In late 2023, I projected a -5% decline in 2024 and a -12% decline in 2025. Although I talked nonstop about the impact of government intervention often and how it would slow the process, I underestimated the impact of election year politicking. I also underestimated the amount of nontraditional liquidity that would flood the real estate market. By the time I did my second forecast, I used approximately 100 data points to arrive at a -9.0% decline in 2025. Wrong again, Ms. Wrong. In fairness, new home median sales prices have declined -12.99% since their peak in 2022. The surprising thing is that those prices do not even include the incentives that have been thrown at new home buyers. If they did, using Lennar’s estimate for incentives, those median sales prices would be down something like -24% since the peak. Existing home prices nonetheless have stayed stubborn, bucking their long-term trend of being less expensive than new homes, despite this headline from Zillow:

The average loss? -9.7%. You need sales to actually have price discovery, and on the existing home side we just have not seen enough sales to matter. As I say repeatedly, we are seeing similar sales to those seen during the depths of the housing crisis while having increased population. For today’s post, we will probe further on a theory I’ve discussed previously as to why sales could be so low while population has increased over 20% since 1999. I believe there may be a significant blind spot in macro land which may have repercussions for what’s to come. I will also do a quick pulse check on our private credit saga and Dimon’s latest warnings as well as share the M3 Price Tracker, delinquency data for February (interesting), the Top-5 summaries for sales, prices, inventory and days on market. In addition to the lists of cities with motivated, distressed and depressed selling, I will also provide trending data for the cities in my series with populations over 500K which took the top spots for largest increase and largest decrease for February sales, respectively. The Northeast has definitively offered its first significant tribute in the house price correction hunger games.

Let’s get to it…

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Alas, it just wasn’t meant to be. In addition to war headlines, the debacle that is private credit captured the attention of mainstream media. Suddenly talking about this suspect asset class is all the rage. Since we last spoke, we’ve had a rating agency downgrade (rare) and an additional fund gate redemptions, while we are learning more gory details about MFS and its blowup.

Once Chase did those writedowns, it was inevitable that the rating agencies would show up. Dimon’s public comments were the rating agencies’ permission slip. There will be more downgrades. In every financial services firm that lends to this space, they are doing audits to review collateral and ensure that the collateral pledged to those lending facilities are money good. Remember the Australian bank that found $1B in fraudulent loans because they decided to look after a peer bank found fraud in their portfolio? Had they not looked, that surprise might have taken much longer to uncover. CFOs and risk managers now know that there is hidden risk in their balance sheets.

This week I’ve had several conversations with analysts and researchers about how opaque the securitization markets are. Inquiring minds want to understand if these blowups can cause something systemic. Where are the losses for these commercial real estate distressed sales for instance? Who is on the hook? Following the money is almost impossible due to the shady nature of the shadow banking derivatives market. We all want answers but at this point I think we have to accept we don’t know where and when contagion might emerge…there are just so many options. What we do know is that companies like Cliffwater did some really stupid stuff, “creating something akin to a fund-of-private-credit-funds.” Cliffwater has stakes in over 50 private investment vehicles which include companies like Ares and Blue Owl. Recently, Cliffwater capped redemptions at 7% or $2.3B which was greater than their inflows in the first quarter. That is indeed now going to be the problem.

From the start, Cliffwater went after a broad audience. Through wealth consultants, formally known as registered investment advisers, people with as little as $1,000 can invest in the product, for fees of about 3% — much cheaper than the largest BDCs.

These Ponzi schemes rely on unsophisticated investors and new capital coming in. As (con)fidence erodes, the new money dries up and problems are exposed. While Cliffwater says it will not have to sell assets this year, I can all but guarantee their lenders will disagree. When in Fintech, I remember participating in meetings with some of these companies like Blue Owl. I was so shocked they would take some made-up 3-year projection for software subscription fees as justification to lend money. The SAAS founders and lenders thought they were geniuses. Think WeWork. I just received my $10 payout from one of these SAAS companies who defaulted on its debt and had to do a strategic asset sale. My payout won’t even get me lunch at Five Guys. I can’t emphasize enough just how much money was being thrown around in tech in 2021 and 2022.

Is private credit our gray rhino? If you are unfamiliar with the concept, author Michele Wucker wrote an excellent book that argued that black swan events are never really black swans. They are typically the size of a rhino, and you can see these events coming from a mile away if you are looking. Private credit could be our gray rhino based on its exposure to not only software, but commercial real estate as well. With treasury yields moving higher, borrowing costs will not be improving and refinancing will not be an attractive option if available at all. Just know that all this extending and pretending means that we have not even started the liquidation process of these toxic assets. This thing is just getting started.

Risks abound everywhere you turn. Dow announced it was doubling plastic prices.

This means that many of the goods you purchase will also increase in price. That is of course until consumers reject those prices because they simply cannot afford them. In East TN, gas is a full dollar higher now. Discretionary spending will be crushed, and the willingness to make a large purchase like a home will dissipate. The big question is how stubborn sellers will respond?

Sellers outnumbered buyers by 630,000 in February. Last week we received new home sales for January with sales down -14.29% YoY and -12.73% MoM. Revisions to December were to the downside. If these results are not revised, that print could be the real turning point of this cycle. The YoY median sales price was also down -6.77% YoY and -4.46% MoM with 9.7 months of supply, non-seasonally adjusted. That is higher than any month in 2025 with the exception of October at 10.3 months of supply. The builders cannot afford to remain stubborn. They have to move that inventory.

As mentioned in my last post the hammers are still swinging which I saw during my Spring Break trip down I-95. The signs for these new build communities are everywhere. When chatting with Jon Brooks in Jacksonville, he told me of several projects in progress that make no sense as there are empty subdivisions and multifamily in close proximity. His update mirrors what I’ve seen all across the country where there was land available to build. Inevitably someone will mention the Northeast here, but there are pockets of the over-building there as well. The Northeast’s issue, though, will primarily be their demographics. Speaking of - with the publication of updated Census numbers last week, a dent in the Northeast’s armor appeared.

Low owner occupancy means that many of those cities will be particularly impacted by the silver tsunami over the next twenty years.

Speaking of the inventory shortage myth, Michael Burry of Big Short fame published a piece last week arguing that indeed we do not have a housing shortage. He also wrote in support of the Initial Public Offering (IPO) for the GSEs. For today’s post, I will discuss my thoughts on his take as well as other news from agency land.

Crypto Mortgages? The mortgage company who is leading the charge here and partnering with Coinbase has quite a history. I was unpleasantly surprised to see who, so I will detail why below. Finally, I will share summary regional information for February for sales, price, inventory and days on market. Sales in our price-stubborn regions were down the most, and it looks like we have added another region to our housing correction. For those who are waiting for lower home prices, we got some very interesting data in the results for the February M3 series which tracks 85 cities. In fact, I almost can’t believe it myself.

Let’s begin…

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Hello everyone! I’m taking a much-needed vacation this week and am on Spring Break. Never fear, though, I will be sleuthing while here. I wanted to send a quick note about existing home sales and the Chase writedowns in private credit. Now that the National Association of Realtors has decided to publish earlier in the month, the results are quite questionable. In fact, they just used the number from last year - 257,000 - for February (non-seasonally adjusted). The average number of sales for February since 1999 is 311,815. NAR revised the median sales price down from last month but showed a modest increase in the median sales price month-over-month (MoM). If this is your first spring selling season with me, you might not know that even in the depths of the last crisis home prices rose during the season. The most important thing to watch is how much they are rising YoY. The 0.30% increase is lower than the YoY increase last month and the trajectory is down.

As I’ve said many times in these pages, turning housing is like turning the Titanic. It takes a long time…longer than most of us can fathom.

What I’m hearing on the ground here in NE Florida is that sales are down significantly and agents are struggling. Did you know there are companies that advance funds to realtors based on anticipated commission from potential sales? More to come on this in a later post, but those requests are increasing. Deals are being cancelled due to sellers refusing to address needed repairs and/or reduce the price. And, of course, the builders still haven’t stopped building. Some projects have stalled but the hammers keep on knocking despite new build subdivisions sitting empty. Which brings me to liquidity.

So much is happening it is hard to keep track of the most important stories. What Chase did last week however is significant and just sped up the timeline. You may be asking yourself why, so let’s dive in…

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Edwin Starr, 1970

Pre-spring chaos has arrived with a roar and a’ rumble as the Ides of March near. Just when you think your ability to be shocked is waning, yet another jolt arrives to bring you off your seat. This is reality in the year of our Lord, 2026. No amount of denial and distraction can change the facts we do know. What do we know?

The Strait of Hormuz is effectively closed, and bombs are being dropped all over the place. Iran recently clarified that friends will be allowed to pass, but the risks remain. If you are unfamiliar with the fog of war concept I encourage you to familiarize yourself with it because it is a thing-thing. A poignant depiction of the fog and fervent chaos during Vietnam can be found in Michael Herr’s book, Dispatches. I believe this is where I first learned about American Psyops after having studied the Soviet propaganda machine in undergraduate studies. What does war have to do with the economy and housing? Well, lots. We won’t be able to cover all of it today but at a minimum gas prices have already jumped higher.

According to AAA, gas prices have risen on average by 27 cents across the country. In East TN that number is 40 Cents. There is much debate about whether the administration foresaw this downstream implication, but I can’t imagine that deep within the bowels of the military industrial complex they were completely oblivious to this potential outcome. Again, the outcome is more important at this moment than the rabbit hole. If you don’t remember 2022 when gas prices rose due to the Ukraine/Russia conflict, let me remind you. I personally witnessed several meltdowns at gas stations where people were downright hysterical. You could feel the desperation. The only wiggle room the bottom and middle of the K have had has been lower gas prices. With that ever-so-scarce wiggle room evaporating, get ready for our economic metrics to get worse:

The biggest loser for retail sales outside of spending at department stores (-9.8%)? Spending at Furniture and Home Furniture Stores at -3.5%. You know what isn’t decreasing when the housing market is hot? Spending at furniture stores.

War is not only a problem for gas prices. It is a big ol’ problem for mortgage rates. Just when we thought the Spring would get a boost with rates under 6.00% Big Daddy War came in and squashed the industry’s dreams. There were lots of folks calling for the 10-year to fall and with it mortgage rates, but that was not the highest probability in my view. When the U.S. decided to seize Russian assets due to its conflict with Ukraine, long-term U.S. debt buyers were forced to think twice about those purchases even if they needed some portion of those assets to play in the global monetary system. Secondly, I remember what happened in the months after that conflict started.

The conflict started on February 24, 2022. Although the 10-year moved down slightly in the first few days, the yield then marched steadily higher. By the time the Fed raised rates in March, the 10-year treasury yield was already over the 2-handle. On May 5, 2022, yields breached 3.0% for the first time since November 2018.

On April 24, 2024, President Biden signed into law H.R. 815, a consolidated $95.2 billion supplemental appropriations package providing security assistance and foreign aid to Ukraine, Israel, and the Indo-Pacific region. In addition to appropriations, this legislation includes provisions that permit the federal government to use seized Russian sovereign assets to support humanitarian causes in Ukraine.

There are lots of feelings about the Fed and the bond market. There are also lots of feelings about whether or not China is “really” selling U.S. debt or just rerouting purchases through the Cayman Islands. Again, the “what” and “why” are a bit hazy, like everything else, but the result is clear: the 10-year treasury went back over 4.00% on March 2nd and mortgage rates went from 5.98% on 2/26/26 to 6.14% as of this writing.

Something I’ve learned over the past several years is to not stay wedded to any narrative. Instead, be open to what the data we do have is telling you. The real story will take many years to fully flush out due to lagging data. Look at all sides of the arguments and be ready to pivot as soon as the triangulated data starts telling you something else. I recommend considering this approach. Being flexible in times like this will mean that you can seize opportunities versus being stuck in the mud.

In other news yesterday, employment surprised to the downside to the tune of -92K. Guess which category got hit? Healthcare. After an outsized increase in January, “health care employment declined by 28,000 in February.” The BLS is blaming this reduction in healthcare on the nurses’ strikes in New York. Regardless, other sectors don’t look so hot either.

Take a look at construction above which shed jobs in February. Here’s another view of the YoY change in construction employment courtesy of :

Lots and lots of folks look at construction employment as THE SIGN that the business cycle is turning. Although construction employment is still slightly YoY positive (+0.51%), the deceleration in growth is clear and at levels we’ve seen just prior to previous recessions.

According to Challenger, layoffs in February were not nearly as brutal as January (48,307 down from 108,435) but plans to hire YTD are down significantly: “so far this year, employers have announced plans to hire 18,061, down 56% from 40,669 new hires during the same period in 2025.”

Looking at the January-February YTD totals in the above chart shows that since 2023 we have been trending higher than every year since 2009.

So, everything is splendid, right? Before getting to today’s meat and potatoes let’s make a little stop to check in on Private Credit. Suffice it to say, I’m starting a tracker as I can’t keep up with the accelerating implosions in that sector. If anyone has time to spare, I recommend going through Blue Owl’s list of investments for kicks. I could be wrong of course, but I believe Blue Owl will be a name that will be writ large in history books…one of many, but prominently featured, nonetheless. There are many juicy private credit headlines to choose from including BlackRock’s announcement yesterday that they are gating withdrawals.

The firm’s $26 billion HPS Corporate Lending Fund, one of the industry’s largest non-traded business development companies, said in a statement Friday that shareholders requested 9.3% of their shares, but management decided to cap the repurchases at 5%.

I bet BlackRock is regretting its purchase of HPS which closed in July of 2025. In fact, it reminds me of how Cerberus felt around December 2006 about its purchase of my former company, GMAC ResCap.

Looking at mortgage specifically, last week we found that double pledging didn’t just happen in the auto sector. To remind everyone, double pledging happens when you pledge the same asset to multiple borrowing facilities. Let’s say I have a warehouse line at both Citi and Chase where I pledge assets, and they give me cash. When trouble comes to town someone will get left in the cold if one asset is pledged in two places. This is a great example of the bezzle I often reference (side note: bizarrely this paper by Michael Pettis has been removed from the Carnegie website). The recent failure of Market Financial Solutions (MFS) in the UK, a mortgage company providing short-term financing on property deals, dinged big names such as Apollo, Barclays, Jefferies and Castlelake. Remember Jefferies got beat up pretty good in the First Brands debacle as well. Western Alliance’s announcement yesterday that they charged off a $126M loan due linked to First Brands kicked their stock price to the curb. They also announced they are suing Jefferies.

Is your head spinning? The private credit headlines are coming just so fast and furious now. The Wall Street Journal published an article yesterday stating that MFS was the latest black eye for private credit:

It was the latest when the WSJ hit publish anyway. Never fear. I’m working on a tracker and tentacle pictograph.

Phew. Who’s ready for the Spring Selling Season? I will tell you who is ready: sellers. This we can surmise because as mentioned here previously listings for sale are exploding. Realtor just confirmed what I’ve been talking about for three weeks.

Most analysts look at the data monthly. I’m old school and watch my 85 markets weekly which is why I could tell you before everyone else what was happening. If you recall, I thought perhaps the crypto rout or wobbliness in the stock market was the trigger. We can’t know for sure but in San Jose specifically, which increased listings by sale by 22.98% MoM for the week ending 3/1, layoffs at eBay and Western Digital could be the culprit. By the by, San Jose also came in as #1 for decrease in YoY sales prices (-10.68%) in January for markets with over 500K in population.

And what of the storm-struck Northeast? They also have now seen listings increase, up 7.16% MoM and 2.21% WoW. For perspective, listings for sale typically bottom in February. On average since 2017, sales decrease -3.11% from January to February with a modest increase of 1.11% from February to March. Typically, by this point in the month FRED publishes Realtor.com data for listings for sale. Oddly, the next scheduled release date for this series is April 2nd. Hmmm.

We know Realtor has the data because they wrote about it. Guess what else won’t be updated until April 2nd? The median list price, which went under $400K in December for the first time since 2022 and has been YoY negative since November. The data providers can pull whatever tricks they want but you will be able to see it in your market either by looking around when driving or by checking the listing sites each week.

In today’s post I will review the Top 5/Bottom 5 market summaries for sales, price, days on market and inventory for the markets I track. Much can be gleaned by looking at who is consistently showing up in the top and bottom 5. Additionally, I will share lists of cities where we are seeing motivated, distressed and depressed selling. 43 of the 85 markets I track had negative YoY sales prices in January compared to 16 in 2025. Contagion is most certainly spreading. Finally, I will share my deep dive into Reno.

Before we hop over to the main event, a quick announcement. My pal is giving me 10 free tickets to his upcoming investment conference, scheduled for March 11th. The first 10 folks who purchase an annual subscription to my Substack will receive one complimentary ticket to what will most certainly be an exciting and informative event with actionable intel from well-known portfolio managers, traders, investors and analysts. Each of the 15 presenters will share one, compelling stock idea. For details, check out this link.

Ok - now it’s time for those meat and potatoes…

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Powell vs Trump, Dimon vs Lipschultz, Good Guys vs Bad Guys…when are we going to wake up and say enough is enough? The kayfabe serves as distraction as those in power obfuscate in hopes they can drain just a little more from the system, from us. How have you coped through the last several months? Did you spend a little more than you should, did you fly off to warmer temps in an attempt to drown out the noise, did you rail on social media in righteous indignation, or did you find yourself hiding under the covers? The deception we are subjected to on a daily basis would be enough to rattle Mother Theresa. That, my friends, is not going to change. The only thing we can change is how we deal with it. When the truth is ever-fleeting and reality unrecognizable, we have to focus and use our gifts to bring as much sanity to the world as we can. You have gifts I don’t and vice versa. For my part, when the excrement hits the fan the only thing that keeps me sane is heavy, productive pursuit of what I can know. While I may not be able to put the puzzle fully together, I can frame the edges through observation and the triangulation of the existing data. Truly that is what I try to do here…to give you clues so you are armed with more insight than you could gain on your own at the current moment so that you can make the best decisions possible for you and your family cuz those in power ain’t worried about us. In their minds, we are steppingstones to some vision of life most of us absolutely do not share.

Remember last week when I said that during the last crisis, each company’s borrowing schedules looked like the Who’s Who of High Finance? That we felt like we were part of a team, in it together to save the financial system? Most of us believed, needed to believe, that lessons had been learned despite no one ever being held accountable. Lessons were learned - just not the ones most of us thought. The architects of our last crisis just learned how to do it faster, better, stronger. But, as always, as history instructs, they got too greedy, they flew too close to the sun, and they believed their own BS. As before, the tentacles of this hyperfinancialization monster can be found on balance sheets around the system as it robs Peter to pay Paul. The names on the list of Who’s Who may be a little different, but yet again they repeat everywhere. What you are witnessing are these actors blustering about as they desperately try to deny that you and I are not just steppingstones.

Case in point? As tech titans run around pledging monopoly money to each other, desperately trying to push valuations ever higher, Forgotten Americans all over the country are rising up against data centers.

Amen to that. If you haven’t seen the video of the moments after the community learned that the data center would be cancelled, I encourage you to watch it. Of course, even in a story like this cynicism can be found. Nonetheless I encourage you to take from it the lesson that when people come together with purpose, sometimes just sometimes we win. In a post I wrote last year called Make it Happen I discussed this with respect to housing. By choice or not Americans have said no to ridiculously high home prices they cannot afford despite mainstream media working overtime to convince us that going into debt slavery is the only way. Even the feat of reading this (really long) Substack is a small act of rebellion as I often chronicle the falsehoods that get lobbed like bombs at us each day. A little bit later, I will discuss the new home sales data we just received for November and December which fits squarely in that category.

Before going there, let’s chat a little about two stories from High Finance this past week. First up, when the Co-CEO of Blue Owl, Marc Lipschultz, pounded his chest and threw shade (deserved or not) at Dimon in October, the following phrase came to mind: methinks he doth protest too much.

Indeed, that was the case, and it only took a few short months for reality to surface. For an excellent write-up of exactly what transpired, I recommend ’s deep dive into the details. What I find interesting about this story is that when you understand the timeline, we can see why Blue Owl badly needed to get everyone off the private credit trail. When reading the below details from the legal complaint filed by Goldman against Blue Owl which “alleges scienter, that is, knowing or reckless disregard for the truth — based on the executives’ direct access to BDC performance data, redemption figures, and liquidity metrics, as well as their control over SEC filings and earnings call messaging,” keep in focus when Lipschultz made his comments about Chase:

Q1–Q3 2025: According to the lawsuit complaint, OBDC II investors withdrew approximately $150 million over the first nine months of 2025 — a roughly 20% increase versus the same period in 2024. Redemption requests in August–September 2025 nearly doubled year over year. Third-quarter redemptions reached approximately $60 million, equal to 6% of net asset value. Tender requests exceeded the 5% quarterly cap in multiple periods, forcing the fund to prorate redemptions. Blue Owl’s Q1 and Q2 2025 10-Qs each reiterate that there is “no meaningful pressure” on its asset base…

October 21, 2025: Blue Owl and Meta announce the Hyperion joint venture — at the time described as the largest private-credit transaction ever executed.

Lipschultz’s comments came four days before this historic deal with Meta was announced. The con(fidence) game requires confidence. Clearly at the time Blue Owl was under significant pressure. The predominant lesson from the GFC? Don’t blink. The lesson those in power learned post the crisis and throughout our Silent Depression? Say it loud enough with enough conviction and many, many will believe, even if the facts contradict. You may not exactly understand the Blue Owl story because the concepts are foreign. There is no need. The key takeaway is that they did a lot of “fronting” to hide stress to make sure the Meta deal got done. What else is this sector hiding?

In looking at Blue Owl’s list of investments, the company we will next discuss, Klarna, appears. Blue Owl owns $65M of Klarna’s subordinated floating rate notes, maturing in 2034.

Anyone who has been in the credit game through a down cycle could tell you that distress at Klarna was just a matter of time. Private Buy Now Pay Later firms can claim low delinquency without having to really prove it. I have a feeling the private BNPL firms are doing some fancy footwork around non-accruals. When you are a public company, though, you have to work harder to hide the cockroaches as the scrutiny is much more intense and the definitions clearer. Accordingly, Klarna did what public credit companies have to do - they took provision for loan loss which put them in the red. From their earnings release:

Transaction margin dollars came in at $372 million, below our $390-400 million guidance, primarily driven by the faster-than-anticipated adoption of our expanded banking offerings. As our banking service adoption accelerates at a rapid pace, we provision upfront for future expected credit losses on new cohorts while revenue is recognized over time. When growth outpaces expectations, those day-one provisions temporarily weigh on margins— even when credit quality remains strong and lifetime economics are attractive. This is value creation that is deferred.

Ummmm. Day one provision? Yes, as a public company you do have to abide by generally accepted accounting principles, but you only have to take provision if you have facts that tell you based on historical performance, industry benchmarks or market fundamentals that you will need it. We are growing faster than expected so we have to take more provision as an excuse is quite the spin.

Click that button and the world becomes your oyster. So, Klarna, you didn’t think this campaign would be a raging success with our younger cohorts who are capital constrained and addicted to consumption? But, also, have you never heard of hedging? Could you have slowed your growth to deliver on your promises, or is getting over your skis already the look you are going for? Deferred value creation? Where have I heard that one before? Cough. AI. Cough. Cough. Based on rising delinquencies across all asset classes, I think it’s safe to say Klarna has some rough waters ahead.

Blue Owl + Klarna sitting in a tree, k i s s i n g. What could go wrong? Can I throw in another tentacle - this one real estate related - for good measure? Sure thing. Will do so below as even I had a hard time believing what I found but now understand even more why we cannot rely on any industry participant to provide reliable data. Additionally, for today’s post we will review those delayed results for new home sales received on Friday as well as the high-level January summary for the cities I track. Can we believe these new home results and what does it mean for Spring? In January of last year 16 cities of the 85 I track had YoY price declines. Guess how many this year? And, based on regional results for January, there are yet again strong signals as to which region will next fall. Finally, I will share a list of links to each of the city deep dives I did last year and reveal which city we will stop in next.

The latest tentacle uncovered in one, two, three…

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The effect? At a minimum, additional uncertainty has been injected while liquidity is challenged. With respect to housing in particular, one state saw a month-over-month explosion in listings for sale (and no it was not FL or TX) that far exceeds their historical average which I will share below, portending a very interesting Spring. In the markets, an uneasy calm seems to be the order of the day as of this writing (though the market is getting a little spicy just as I am about to hit publish). The market hit snooze on a less than rosy Retail Sales report and negative benchmark revisions for employment. Did someone say Rosy?

You know what happens in December, right? Typically, a lot of spending to ensure the kiddos have plenty to do on Christmas morn. Since 1992, Retail Sales have registered a negative month-over-month print from November to December nine times, seasonally adjusted:

Source: United States Census

The average Year-over-Year (YoY) increase in Retail Sales since 1992 is 4.65%. Remember…our economy has to grow, not just maintain. This year the number came in at 2.43%, just shy of December 2007’s increase of 2.86%.

And how are those credit card balances David Rosenberg mentions faring from a credit quality perspective?

Well, that doesn’t look good. Of course, if folks are gainfully employed and the labor market is “stabilizing”, as Jerome Powell claimed last month, then delinquency should stop climbing. While yesterday’s Jobs Report aka Non-Farm Payroll (NFP) came in hotter than consensus expectations at 130,000 jobs added, following a chilly December where per revisions only 48,000 jobs were added, the report also included benchmark revisions for 2025.

For those that have been long-time subscribers, these revisions will not come as a shock to you. However, if you are new to these pages take a moment to digest this data. Preliminary data received throughout last year showed 584,000 jobs gained. The number ended up being far less at 181,000, the weakest since 2020, compared to 1.46M jobs gained in 2024.

H/T: @MauiBoyMacro

College graduates who have been pounding the pavement to no avail won’t be surprised by these numbers, but those who last year believed the economy was strong and resilient based on previously reported numbers may be. What I coach here is that you have to use both the official data and what you see in front of your very eyes to assess the true reality of the situation. If the economy is firing on all cylinders, why do we have the highest % of jobholders who are working two part-time jobs to make ends meet?

Source: BLS via FRED

Additionally, before everyone gets excited about this rebound in hiring, consider that the largest growth in hiring came from our good friend, Private Education and Health Services, with 137,000 jobs added. While jobs were shaved from Information and Financial Services, this category as per usual saved the day. Frequent readers of course will not be surprised by this. We have seen it over and over in cities across the country. The Medicaid cuts will take time to flow through the system. Additionally, municipalities are running out of money to fund the public/private partnership programs that house many of these jobs. Adding insult to injury, as my colleague @craigshapiro pointed out on xTwitter, the (in)famous Birth/Death model struck again in an outsized way in the January 2026 report with an abnormal increase specifically in Private Education and Health Services. Once you start digging, you realize that nothing is as it seems.

Take this recent headline regarding private credit’s foray into real estate lending.

H/T: @kristenshaughnessy

Traditional hard money lenders demanded 40% down payments and charged rates above 12%, reflecting intimate knowledge of local markets and borrowers. Their caution was existential because these were often principals lending their own capital in hyperlocal geographies. But as firms like KKR-backed Toorak Capital Partners standardized the business, loan-to-value ratios climbed to 90%, and rates dropped to the high single digits. Approval processes favored speed over relationship-based due diligence.

Private lenders originated over $145 billion in residential construction and rental loans in 2025 alone, while simultaneously expanding into office conversions, ground-up multifamily development, and transitional commercial properties. The playbook is identical across asset classes. Underwrite to stabilized value, charge a premium to conventional debt, and rely on equity cushions that only exist if projections materialize. In stable or appreciating markets, this works. In correction scenarios, the math unravels quickly.

Again, if you are a frequent reader of this column then you will not be surprised. I have been emphasizing this private credit space for some time. What I’ve heard from some of these private credit actors is that they relied on those inflated credit scores and now it is coming back to bite them. Importantly, these private actors will need to be more aggressive than the government-sponsored entities (GSEs) and other government agencies to offload these distressed properties which could accelerate price discovery. This is particularly true in commercial real estate where these companies provide 20-25% of recent funding.

Commercial real estate, you say? Didn’t we just hear that Trepp reported the highest delinquency for Office on record? We sure did.

Additionally, delinquency in the multifamily (think apartments) sector also increased to 6.94%. Funnily, a Bloomberg article yesterday blamed a decline in real estate services stocks on the AI trade.

The selloff delivers another jolt through a commercial real estate industry that has struggled to regain its footing since the pandemic upended office demand and higher interest rates crushed deal volumes. While the boom in AI has fueled pockets of strength — particularly in data centers and high-end office leasing — investors are weighing whether advances in AI could ultimately pressure parts of the business by automating tasks and streamlining deal processes.

Okey doke. Could it have been a contributor? Maybe? These stocks should be in the gutter. What are we going to blame “AI” for next?

Why am I talking about retail sales, employment, private credit, commercial real estate, AI mania, etc.? Don’t you just want to know when home prices are going to make a move? What I’m trying to illustrate is the stress across the whole system. The idea of a strong labor market and that private credit lending which happened due to misconceptions about credit scores and labor, buoyed home prices even as fundamentals were seriously degrading. When it comes to the data, we are regrettably handicapped, so we have to put the puzzle pieces together. Nothing seems to matter until it does. Be forewarned, though, the Ides of March near. March in Finance has a really nasty reputation: Bear Stearns, Covid meltdown, Archegos, SVB, etc.

Speaking of Bear Stearns and the Great/Global Financial Crisis (take your pick), I got a serious case of the heebie jeebies when I saw this recent headline:

Oh, for heaven’s sake. We have seen this movie before which is how my former company, GMAC, got the TARP bailout last time only to put its mortgage arm into Bankruptcy in 2012 and manifest the purple monster, Ally. I was in the courtroom in NYC to provide subject-matter support for Day 1 Motions which I helped draft…twice. I wrote a lot about that history here, but seeing this headline invoked feelings that must be similar to what a war vet experiences when watching the exact thing they lost so much to stop was happening a l l o v e r a g a i n. I’ve felt some version of that emotion since going out on the road in 2023 almost every day. This headline, however, dealt a final death blow to my forever-incredulity and my feeling that I was part of something noble. I’ve often described how my team thought we were helping to save the entire financial system. At the time, everyone I knew in Finance was an avid Battlestar Galactica watcher. High Finance was a relatively small, interconnected community. Everyone was borrowing from each other and your borrowings schedules looked like the Who’s Who of Finance. Thus, the middle managers felt like we were in it together. For those who worked outside of High Finance, you probably thought all the madness ended in 2010 or 2011. I would say we (the useful idiots, not the big bad baddies) spent almost six solid years fighting for our lives. If only we’d been building high-speed rail or doing something remotely productive to improve the lives of the Forgotten Americans. What a waste of time and talent.

For today’s post there is much to review. Firstly, that surprising jump in listings for sale in the last two weeks is critical for understanding what’s next. We will discuss the key, unexpected areas where this is occurring. Secondly, FHA delinquency is in for January, and the drumbeats are getting louder. The Fed also highlighted an alarming trend for all mortgages in its most recent Household Debt and Credit Report which we will discuss. From the Black Knight/ICE delinquency series, non-Covid forbearances are on the rise and will impact timing on foreclosures hitting the market. We also received existing home sales for January and wowzer, they were bad. Which regions experienced the worst sales? What are they telling us about what to expect for the Spring selling season? And, finally, remember Sub To and the shadow real estate markets? The mortgage market is starting to wake up to the issue, and you will want to hear the latest.

Let’s begin…

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