New: 🧠 Market Minds Issue #085

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The Buy Box Is Back (But It’s Smaller)

Higher-for-Longer: A New Normal Sets In

Let’s start with the obvious: 57% of single-family rental (SFR) investors now believe mortgage rates will stay above 6.5% for the next year. That’s nearly double what it was just six months ago. The dream of a “return to 4%” is fading. Investors are adjusting—tightening underwrites, raising capital costs, or sitting longer on the sidelines—but importantly, they’re not fleeing the market. What they’re doing is preparing for the second wave of buying.

Rent Is Still Rising (Just Don’t Call It a Boom)

Despite rising costs, 83% of landlords plan to raise rents over the next year. Notably, only 10% expect increases over 7%. And that cost surge is real—59% say rising insurance premiums have dented their cash flow, and 30% cite property taxes as their biggest expense jump last year. In short: revenue’s up modestly, costs are up sharply. We’re in margin compression territory.

Sellers Are Holding, Buyers Are Backing Themselves

Only 32% of respondents plan to sell a property in the next 12 months, a signal that the would-be exiters are pausing unless forced. Meanwhile, 79% are looking to buy at least one property, up from 61% a year ago. More time on market = leverage for buyers. Especially when sellers are fatigued. The “buy box” is still tight, but investors smell opportunity as stale listings pile up.

The Soft Reset Is Underway

This isn’t 2008. It’s not even 2020. What we’re seeing is a market soft reset: prices haven’t crashed, but the cost of capital has, and it’s forcing operators to level up. You’re not buying just to ride a wave, you’re buying to execute, operationally and tactically. Investors who scale cash flow optimization, insurance management, and strategic acquisitions will win this phase.

Why the Fed’s Future May Be the Best News Housing Has Had in Years

A New Fed Before It’s Official

There’s a new chess piece on the board: the “shadow Fed president.” Trump is reportedly lining up potential successors to Jerome Powell, and the shortlist reads like a CNBC guest list—Warsh, Hassett, Waller, Malpass, Bessent. The kicker? They’re not waiting until 2026. The play here is to shift market expectations now by speaking softly and carrying a dovish stick. The strategy isn’t to pull strings after Powell’s out, it’s to spook the bond market into submission now.

Labor Market Weakness Could Be a Rate Cut Catalyst

Bond traders aren’t just watching inflation prints anymore—they’re stalking the labor data. If job markets show more cracks, the shadow Fed won’t play it safe. Unlike Powell’s “wait until pain is obvious” stance, the new team would likely signal rate cuts on weakness alone. That’s how you get the 10-year yield to slide from 4.3% to 3.5%, without a single official cut. You talk, markets listen.

Morgan Stanley's Big Bet: Seven Cuts in 2026

Morgan Stanley just forecasted seven rate cuts in 2026, with a terminal rate landing somewhere between 2.5% and 2.75%. That sounded wild… until you realize it’s a bet on the shadow Fed’s influence. These cuts aren’t coming because of collapse, they’re coming because policy’s about to change course. Forward guidance is the real lever now, and the shadow Fed has its hand on it.

Housing, Finally on the Radar

Permits and starts have been scraping the floor, and the policy response has been crickets. But the shadow Fed might actually throw housing a bone, not out of kindness, but politics. Stimulating the housing market isn’t just economic, it’s emotional. It changes sentiment. And no one understands the politics of vibes like Trump.

What Today’s Seller Risk Really Tells You About Price Power and Market Patience

Nearly 1 in 16 Sellers Are Underwater—But Look Closer

Nationwide, 6% of home sellers are at risk of taking a loss. That number has crept up from 4.4% a year ago, but zoom out and it’s still a far cry from the post-GFC years when nearly half of listings were bleeding equity. Most sellers still have enough cushion to negotiate. But if you're looking to identify stress points, the real story sits below the national average.

Some Metros Are Showing Serious Stress

San Francisco is waving a red flag. Nearly 1 in 5 sellers there are at risk of selling below their purchase price. Austin isn’t far behind, especially among post-pandemic buyers—almost 48% of them are exposed to potential losses. Meanwhile, markets like Providence, RI, are basically bulletproof. Geography is splitting the real estate map into gainers and grinders, and understanding which side your market falls on could define your pricing leverage.

Condos Are Quietly the Canary in the Coal Mine

Almost 10% of condos are at risk of selling at a loss. Among those bought after the pandemic, that risk balloons to nearly 30%. Condos have become the lagging asset class in a market that’s punishing recent timing and poor liquidity. If you're in a condo-heavy market, you’re already seeing this play out in days on market and price cuts.

Timing Is Everything (and Pandemic Buyers Are on the Clock)

Sellers who bought after mid-2022 are facing elevated exposure: 16.4% risk selling at a loss. That’s nearly double the risk of those who bought during the pandemic and nine times the risk of pre-pandemic buyers. Time in the home has become the new moat. And those without it? They’re either adjusting price fast—or pulling listings altogether.

Horrendous? Or Not?

Do you think this Ashland City, TN, Tudor, listed for $479,900, was ruined by the remodel?

Check it out 👇

TL;DR (Too Long; Didn’t Read)

The SFR market is recalibrating for a “higher-for-longer” rate environment, with investors tightening buy boxes and preparing for a second wave of acquisitions despite compressed margins. Seller distress is rising unevenly—condos and post-pandemic buyers in markets like Austin and San Francisco are showing cracks, while most owners still have equity buffers. Meanwhile, the emergence of a “shadow Fed” suggests rate cuts could arrive via market psychology before official policy shifts, with housing finally gaining political relevance. This isn’t a collapse—it’s a controlled reset, rewarding those who can operate, not just speculate.

Have a great weekend - we’ll see you next Saturday.

Cheers 🍻

-Market Minds Team