May 06, 2025 / Residential

Foxhole Newsletter - May 2025

Housing: A Tale of 2 Countries

Builders’ lack of activity in the Northeast and Midwest have kept inventory low. Conversely, in the South -particularly in Texas and Florida-’ home prices are either flat or declining due to increased activity and rising inventory supply. The areas in the US that have the most supply (the South) also have markets where more than 50% of homeowners have a rate above 4.00%. This shows that homebuyers are willing to buy a house in this environment in the right scenarios. Get our thoughts here

The New Economy: Millennials Redefine Success

New economy outraces old ways to the top 5%. A profound transformation is happening as millennials ascend to top-earning positions predominantly in tech and finance, signaling a distinct shift from traditional professions. The old economy, once dominated by sectors like law and medicine, is giving way to industries that offer rapid financial growth and higher earning potential.

Why does this matter? The jobs a high earner would do are now not necessarily about working in the same community you may live or play. A new generation of top earners is not interesting. What is interesting is how they are earning their money and where they are moving to. Remote work and tech work has created opportunities for markets outside the major metros (i.e. NY, Chicago, LA, SF) and these high earners working in secondary markets will need a place to live. Get our insights here.

Census: “Cities Not Dead”

Census says South & West lead US growth: From ‘23 to ‘24, cities of all sizes across the U.S. saw population increases, with the Southern and Western cities experiencing the most significant growth. What does this mean for the South & West, as well as large cities in the Northeast?

The housing “puck” is moving to warm locations run by pro-business leadership. In addition, the Northeast saw a reversal with cities over 50,000 residents growing by 1%, a fivefold increase from the previous year. Cities are getting a shot in the arm post Covid, particularly with big companies doing away with remote work. Better news is other areas of the nation are prospering even with changes back to more traditional employment arrangements. Get our thoughts and see which areas are seeing the largest growth here.

Spring Sales Slump Amid High Rates

WSJ says spring sales season has been disappointing, with rising inventory and subdued demand. Why does it matter? High mortgage rates, now around 7.00%, and economic uncertainties are discouraging the Fed from cutting rates and keeping potential buyers on the sidelines despite price reductions in select areas and increased inventory.

What does this mean for new buyers? While rates aren't ideal, life can't wait. Here's our look at what these new buyers are facing and what home builders are doing to put people in their homes. 

Missio Capital Launches with $100M Boost

New Texas venture: by John Rausch (and Foxhole reader) Fayetteville-based Rausch Companies and Texas-based Crowe Capital have launched Missio Capital with a $100 million equity commitment from John Rausch. Why it matters: The fund combines real estate expertise to target strategic multifamily and income-producing investments in Texas and the Southeast. Read why this excites us at the Foxhole here.

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