👋👋 Good morning real estate watchers! Today, we are going to talk about how three hundred and ninety members of Congress agreed on something. That’s not a vote, that’s a cult. If this trend continues, by next month, they’ll be singing Kumbaya and approving universal healthcare for hamsters.

But first, here’s what we’ve been paying attention to this week…

1️⃣ Eighty & Underbuilt: As the oldest Baby Boomers turn 80, senior housing demand is surging to seven-year occupancy highs while construction lags at decade lows, driving up rents and investor appetite. Lawmakers are pushing density reforms, but zoning fights and neighborhood resistance continue to choke off the very rental housing that aging Americans increasingly need. (HW)

2️⃣ Shelter Chill: Zillow expects CPI shelter inflation to keep cooling in 2026, with rents rising 2.8% and Owners’ Equivalent Rent at 3.3% annually in January, as softer market rents, more supply, and a sluggish job market take pressure off housing costs. OER, the heavyweight in the CPI basket, is projected to slow sharply through the year (potentially ending 2026 closer to 1.8% annually), signaling that housing’s inflation punch is fading fast. (Zillow)

3️⃣ Jobs Jolt: January hiring came in hot: 130,000 new jobs and unemployment dipping to 4.3%, even as 2025 payrolls were revised down sharply, signaling a steadier labor market than feared. With wages still outpacing inflation, the data gives the Fed cover to stay on pause, offering housing a dose of cautious optimism but likely delaying any immediate rate relief. (Realtor.com)

4️⃣ Refi Rebound: Fourth-quarter lending held steady at $627 billion even as overall loan counts dipped, with refinancing surging to 42.6% of originations and overtaking purchase loans for the first time in nearly four years. Lower mortgage rates fueled the refi wave, cushioning the usual seasonal slowdown in homebuying and giving total dollar volume a modest annual lift despite uneven metro-level performance. (ATTOM)

5️⃣ Office Hangover: Commercial mortgage-backed securities delinquencies climbed to 7.47% in January, up 17 basis points, driven largely by distress in the office sector. Two massive New York City towers, Worldwide Plaza and One New York Plaza, did much of the damage, highlighting how a handful of troubled assets can skew the broader market even as fundamentals show early signs of stabilizing. (CNBC)

TOP STORY

In a plot twist nobody saw coming, Maxine Waters and a Republican walked into a markup session and agreed on something.

Not just anything… housing. The third rail of American politics, where NIMBYism meets mortgage rates meets generational wealth anxiety meets "why can't anyone afford anything anymore." And on Monday, the House passed the Housing for the 21st Century Act by a vote of 390 to 9.

Three hundred and ninety to nine. In a Congress that can barely agree on lunch. So what's the catch?

Let's give credit where it's due. Financial Services Chair French Hill (R-Ark.) and Ranking Member Waters (D-Calif.) managed to assemble a coalition that includes the National Association of Realtors, Habitat for Humanity, Americans for Prosperity, and more than 50 other groups that typically can't agree on pizza toppings.

The bill takes a machete to decades of regulatory shit soup that has choked federal housing programs. It modernizes HUD's HOME Investment Partnerships Program, a relic that still operates like it's 1990 and hasn't heard of "infill development." It streamlines environmental reviews that currently add months (and millions) to projects. It expands manufactured housing options because, apparently, we forgot that factory-built homes are still homes. It gives community banks more flexibility to finance housing projects without drowning in compliance paperwork.

Speaker Mike Johnson called it "a critical step toward addressing this shortage."

Up For Growth, which tracks the national housing gap, celebrated it as progress toward closing a deficit of roughly 3.8 million homes.

The National Association of Home Builders praised the reduced barriers to building starter homes, the mythical creature that Millennials have only read about in history books. All of which sounds great. Until you notice what's conspicuously absent.

Here's the uncomfortable truth nobody at the press conference wanted to discuss: the bill doesn't touch zoning.

Not one word forcing suburban municipalities to allow duplexes. No mandates requiring cities to upzone near transit. Zero provisions compelling that wealthy enclave with three Whole Foods locations to permit (God forbid) an apartment building.

This is what policy wonks call the "lowest common denominator" approach. It's bipartisan precisely because it avoids the politically radioactive question of telling local governments what they can and cannot zone. The federal government will cut red tape, expand programs, and throw money at solutions, but it won't force Palo Alto to let someone build a fourplex.

Critics on X were quick to point this out. "Solid step forward," wrote one housing economist, "but it's treating symptoms while the underlying disease—exclusionary zoning—continues to metastasize."

The nine "no" votes came from an eclectic mix: seven Republicans who likely opposed the federal spending, one Democrat from Texas, and Thomas Massie, who seems contractually obligated to vote against anything that passes with broad support.

Of course, passage in one chamber means exactly nothing until it survives the other.

The legislation now heads to the Senate, where Senators Tim Scott (R-S.C.) and Elizabeth Warren (D-Mass.) (another odd couple) have their own housing bill, the ROAD to Housing Act, gathering dust since last year.

Theoretically, these packages should merge into a comprehensive whole. Practically, that means months of horse-trading, potential amendments that could gut investor-friendly provisions, and the ever-present risk that the whole thing will die quietly during a budget reconciliation fight.

Hill acknowledged this reality diplomatically, stating he looked forward to working with the Senate "to send a bill to the president's desk that reflects the views of both chambers." Translation: buckle up.

What didn't make it into this bill is equally telling. The Trump administration reportedly pushed for restrictions on institutional investors buying single-family homes, a populist crowd-pleaser that polls brilliantly and would've instantly torpedoed the bipartisan coalition. Free-market Republicans balked. The provision vanished.

So, assuming it survives the sausage factory, what does this actually mean for people with skin in the game?

For investors and developers, this bill creates legitimate tailwinds.

Multifamily development gets easier financing pathways through FHA reforms and community bank provisions. Manufactured housing finally gets treated as a serious housing solution rather than a punchline, potentially opening new markets for factory-built products. Build-for-rent operators could benefit from streamlined permitting and development-friendly regulatory changes. Community lenders gain the flexibility to deploy capital into housing projects without being suffocated by compliance requirements designed for institutions ten times their size.

The catch? None of this addresses labor shortages, material costs, or the fact that construction productivity has been essentially flat for decades, while every other industry has achieved efficiency gains.

The Housing for the 21st Century Act is a genuine accomplishment in an era when genuine accomplishments are rare. It's the legislative equivalent of everyone agreeing to stop arguing about the thermostat long enough to notice the house is on fire.

Will it solve the housing crisis? No. Will it meaningfully bend the affordability curve? Maybe, in five years, if the Senate cooperates, implementation goes smoothly, and local governments don't find new creative ways to block construction.

But for the first time in a long time, Washington acknowledged that housing supply actually matters; that you can't wishful-thinking your way to affordability without building something.

The Senate is up next. The bipartisan goodwill is fragile. The lobbying has only just begun.

Don't touch that dial.