The pandemic party dreams are over. During the pandemic, many sought more space and different lifestyles during lockdowns, not all transitions met expectations, prompting a return to familiar settings. In addition, many tried to "time the market," learning a key lesson - life events often dictate housing decisions more than market conditions. Click here to get insight into our thoughts about this here in the Foxhole.
HUD and Dept. of Interior have announced a plan to identify federal lands suitable for affordable housing development. Why does it matter? This initiative aims to increase housing supply, reduce costs, and streamline land transfer processes to meet the growing demand for affordable housing.
A new Joint Task Force will inventory underutilized federal properties, aiding states and localities in developing these lands while ensuring affordability remains central. Look out for the following states: Arizona (38.6 federally owned), Colorado (36.2 federally owned) and Utah (63.1 federally owned). While federal efforts could provide a boost to the housing market, from a practical perspective, road access, dry utilities, and water (rights) will be a challenge in getting units to market. Get our thoughts here.
Hack real estate analyst warns housing market is showing signs of the ‘08 crisis. In Florida, inventory has increased by nearly 34% year-over-year, with declining demand due to high insurance fees and natural disaster risks. In fact, home prices in some Florida areas are dropping, and Gerli predicts a 5% decrease statewide in 2025. While builders in the South and West face a challenging market, the Northeast and Midwest continue to experience tight supply and rising prices.
What do we think? You can read more here but while there are plenty of clickbait artists who want to stoke fear, the market is rebalancing supply, creditworthy borrowers are making purchase decisions at rates above 6.0% even today, and builders are making tactical decisions to provide incentives, while keeping margins above pre pandemic levels.
Rocket Companies is making waves by acquiring Mr. Cooper for $9.4 billion and Redfin for $1.75 billion, aiming to revolutionize the homebuying process. Why does this matter?While this appears to be vertical integration play. This actually a play in the new economy of the internet using Aggregation theory. The internet is disrupting the “old” model of customer acquisition.
Rocket is creating a massive customer funnel (52M visit/mo or 1 in 6 Americans) in the resale market by acquiring Redfin for a paltry $1.75 Bn. They're betting they can “acquire” customers for a far lower cost than their competitors. It’s literally the first bullet in the press release. Get our take and what we see as the bigger picture.
NAR introduces a new MLS policy. What’s new? The "delayed listings" can be filed with the MLS for access by participants, but not displayed through an Internet Data Exchange (IDX) feed. Now, why does this matter? This policy aims to provide “flexibility” to home sellers and their agents while ensuring fair access to listings for buyers - allowing sellers to choose between "office exclusive exempt listings" and "delayed marketing exempt listings," offering tailored marketing strategies. Read our take and how this impacts consumers.
New wave of tariffs to have 50x more impact than Trump's first term, according to UM economist. These tariffs will fundamentally alter consumer and business decisions, leading to increased costs and lifestyle changes. The current rate is 15 times the 2016 level, leading to significant economic pain. What are they saying? The tariffs are outsized because they are based on bad math, according to researcher. Economist Brent Neiman expressed shock claiming the calculations were "very wrong."
What does this mean for homebuilders? The increased costs will likely push them to a Sophie’s choice - hurt buyers or hurt themselves. See what we're saying about the tarrifs and their effect on the industry here.
Zillow has thrown down the gauntlet against private listing networks, directly targeting these private listing networks and disrupting their model. Why does it matter? Zillow's aggressive stance exposes the risk of private networks, arguing they shortchange sellers on potential exposure and profits. The battle lines are clearly drawn now. Here's the Foxhole take and what we think it all means.
Texas is the wild west for data centers. Spanish construction giant ACS has announced plans to develop a large project in Fort Worth, Texas that'll occupy a 107-acre site and is set to begin its first phase by 2031. The DOE has identified 16 federal sites for data center and AI infrastructure development, aiming to enhance U.S. AI leadership and reduce energy costs. What does all this mean? Data center expansion is expected to push up property demands, with an expected spend of $1.1 trillion by 2029, boosting prices for land and home prices, particularly in areas like Dallas-Fort Worth and Abilene. Read how it will impact your area.
Market's outlook on housing stocks overly pessimistic says Morningstar. Despite fears of construction labor shortages and inflation due to tariffs, most building materials are U.S.-made or tariff-exempt. What are builder's saying? Lennar is saying it would pushback on building material increases from suppliers. With margins still higher than pre-covid there is room to accommodate increases and hold the line on customer pricing. Learn more here.
Robust convo between (YouTube link) former Treasury Secretary Larry Summers and public intellectual Niall Ferguson at University of Austin. Worth your time!
Larry Summers on Tariff Policy (1 min listen)
Larry Summers on AI impact (2 min listen)
Larry Summers on Fed Actions & recession (1 min listen)
Foxhole View: History doesn’t repeat, but it rhymes. Great insight on the moment we are in right now.
Bond traders are fire selling US treasuries, according to Fortune. At the same time, equities are falling, too. The Dow Jones is on track for its worst April performance since 1932, shedding nearly 1,000 points as investor confidence wanes. When bond yields rise, it means people are selling US treasuries bonds. The bottom line: We have three groups all pointing guns at one another, the US, investors, and foreign countries. Further uncertainty will create more capital flight from the US, driving up bond yields. Read what the Foxhole has to say here.
1 in 4 US residents stop big spending, says Redfin. The trade war developments are driving up uncertainty and pushing out purchases of homes and cars. Why does it matters? The tariffs are influencing consumer behavior significantly, with 55% of respondents indicating they're less likely to make major purchases in ‘25.
More than one-third of people lack an emergency fund to cover housing payments amid these economic uncertainties.
Only 13% of respondents feel more inclined to make major purchases due to tariffs, revealing a stark drop in consumer confidence.
60% of individuals aged 55+ are less likely to purchase, compared to 54% of those aged 18-34.
The Consumer Confidence for April is 50.8 down 1 year ago from 77.2. That’s a drop of -34.2%
Get our thoughts on the tariffs and how we see it impacting the industry here.
The best party in Texas is happening in San Antonio for the next two weeks. As a son of San Antonio, here are recommendations on things worth checking out: The Battle of Flowers Parade on 5/2 (It’s been going on for over a 100 years.), The Fiesta Flambeau Parade on 5/3 (at night its awesome), and The Texas Cavaliers River Parade on 4/28.
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