The west may be the best, but not for office space vacancies. National office vacancy rates were 20.5% as of Q4 2025, according to Cushman and Wakefield.
Newsom country (California) leads the nation in terms of office vacancy with San Francisco leading the pack at 33.1, Seattle at 32.3% and LA CBD at 31.7%
Q4 2025 Office Vacancy Rates – Cushman and Wakefield
The Federal Reserve prints a lot of money (M2). Unfortunately, it largely benefits elites (the top 1%). The bottom 50% get some benefits, but the gains in net worth largely benefits the elite class.
This sounds like a legal Somali daycare scheme. Perhaps The Fed should be renamed “The Federal Quality Learing Center.”
Yes, Somalis have daycare centers in Columbus Ohio. Thanks Governor Dewine for doing absolutely nothing to reign in their fraud. /sarc
President Trump ordered Fannie Mae and Freddie Mac to operate like The Federal Reserve. Buying assets to manipulate interest rates. In this case, F&F have been ordered to buy $200 billion of agency MBS.
Thursday’s Truth Social post triggered an immediate snap tighter in mortgages, led by the belly and lower coupons. By pulling MBS spreads tighter and crowding out real-money buyers, Fannie and Freddie’s purchases would push incremental demand into Treasuries as the next-best duration substitute, putting a modest bid under the belly of the curve.
However, execution and the ultimate size of purchases is still unclear, as my colleague Alyce Andres noted. If the government-sponsored enterprises GSEs stagger purchases, and signal an ultimate increase above the announces $200 billion, further tightening should occur. They can fund a lot of the buys from existing liquidity portfolios, though there’s a path where they could issue short-term debt to preserve operating buffers and could nudge repo wider at the margin.
The bigger transmission channel is hedging, as highlighted by colleagues Ira Jersey and Will Hoffman. Unlike the Fed, the GSEs actively hedge MBS holdings, shedding duration by paying fixed rates in swaps and using swaptions to manage the negative convexity and vega risks embedded in mortgages. That matters for swap spreads and for volatility, especially in the belly.
That’s why GSE MBS purchases don’t have to be huge to change the feel in rate markets. The post-Global Financial Crisis regime dulled the classic convexity feedback loop because the Fed held such a large amount of agency MBS and didn’t hedge it, while the GSEs shrank their portfolios. Trump’s directive risks bringing more of that regime back.
A recent note out of Goldman Sachs frames it cleanly: A $200 billion build could lift the active convexity-hedger footprint by about 25%. The street then starts front-running the mechanical flows — paying in selloffs, receiving in rallies — which makes breakouts more likely even if day-to-day ranges look calm, Goldman added.
Positioning makes the setup more precarious. JPMorgan already saw mortgage valuations as a “bit snug” before the announcement, while BofA flagged that rates market had recently added fresh belly shorts sitting against a backdrop of benchmark funds still overweight MBS versus IG.
That mix can keep the initial tightening sticky, but it also raises the odds of sharp reversals if the market decides the purchasing flows are slower, smaller, or more heavily hedged than hoped.
Fannie and Freddie’s retained portfolio are soaring along with the duration gap.
The effect on mortgage rates has so far has been negligible. The 30-year conforming mortgage just fell below 6% at 5.99%.
The littany of horror stories about government attempts to make housing more “affordabl;e” at enmdless.
New York mayor Zoran Mandami appointed Cea Weaver as New York City’s housing Tsar allegedly to make housing more affordable. Her proposal? People should pay 30% of their income for housing. if you have no income, you pay zero. Then she decreed that you must offer your multifamilty property to the city first before you sell it in the open market. Allegedly for the “greater good.” Which means a small number of elites will make a fortune (Mandami donors?).
But harken back to the Clinton Administration where they issue a proclamation to make housing more affordable, the national homeownership strategy. This strategy helped usher in an era of lowering credit standards and higher LTV lending. Leading to the mortgage crisis of 2008. Thanks a lot Bill and Hill!
And then we have The Federal Reserve, the master manipulators of interest rates. While mortgage rates have fallen recently to around 6%, they are up 134% from Biden’s Maladministration. So while The Fed contributed to the housing bubble that blew up and nearly destroyed the banking industry.
Government and especially Cea Weaver. A child of privelege.
Pending sales of existing homes in the US surged 3.3% MoM (more than the expected 0.9% MoM move) in November as a modest improvement in prices and mortgage rates encouraged buyers.
The gain was broad-based across regions and exceeded all but one estimate in a Bloomberg survey of economists, but left the YoY change in sales somewhat stagnant on an NSA basis.
Signings have now increased for four straight months, matching a streak seen during the frenzied housing market of the pandemic.
The trade association’s report on Monday showed contract signings rose in each US region last month to their highest levels of the year. The West posted the largest increase, followed by the South, the nation’s largest home-selling region.
November’s surge dragged the Pending Home Sales Index to its highest since Feb 2023…
Bloomberg reports that the recent data point to the gradual improvement many economists see for the housing market into 2026.
Mortgage rates that were close to 7% in May have since settled in the 6.3% to 6.4% range, and home prices are growing at a much slower rate compared to last year.
That’s helped fuel small gains in contract closings in recent months. However, economists and industry experts have widely different expectations for next year.
In a recent survey of nine market analysts, estimates for the home resale market ranged from 1.7% to 14% sales growth, with the rosiest projection coming from NAR’s Yun.
Pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.
Politicians love to scream about housing being simply unaffordable. Like mayor-elected Mandami in New York City. But the reality is that housing prices vary by city and there are more affordable cities than New York City to choose from. Federal policies should not be focused on letting people staying a particular city.
When we look at housing prices compared to average hourly earnings, we see housing prices rising with average hourly earnings … as expected.
If we look at year-over-year changes, we see the Covid bump in housing prices corresponding with the surge in Federal spending. But things have simmered down since the bump in 2020-2023.
My suggestion is for the Federal government to stop interfering in the housing market.
Nobody wastes money like government, particularly around events like Covid where Federal spending led to housing prices spiking after Covid outbreak in 2020. This made housing unaffordable for most households. This in turn helped kill the mortgage market.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was 13 percent higher than the same week one year ago.
The Refinance Index decreased 4 percent from the previous week and was 86 percent higher than the same week one year ago.
Once again, the government response to the Wuhan Covid virus of 2020 helped drive up housing prices killing off mortgage demand.
Confounded Interest - Anthony B. Sanders 
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