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Single Family Market Update: Warsh nomination lifts rates, lenders compete, builders prioritize pace (2026.01.30)
About This Episode
- Kevin Warsh named next Fed Chair, triggering a bond market selloff and pushing mortgage rates back above 6%
- Markets view Warsh as more hawkish than Powell, increasing uncertainty around the pace and depth of future rate cuts
- Mortgage rates that briefly touched 5.99% have reversed, making floating riskier for DSCR, bridge, and flip borrowers
- PennyMac earnings show origination volumes rising while servicing profits fall, highlighting intense lender competition
- Excess lender capacity is keeping pricing tight, giving borrowers negotiating leverage when shopping rate quotes
- Existing-home sales jumped 5.1% in December to the strongest pace in nearly three years, driven by late-year rate relief
- Inventory tightened sharply to 3.3 months of supply, creating near-term acquisition pressure before spring listings arrive
- M/I Homes doubling down on spec inventory, prioritizing sales pace over margins through aggressive incentives
- Builder impairments and price declines in Austin and San Antonio signal elevated risk in spec-heavy, entry-level markets
- Builder rate buydowns and incentives continue to compress resale comps in construction-heavy metros