👋👋 Good morning real estate watchers! Today, we are going to talk about...

1. The average APR on a credit card is now over 28%. That’s not an interest rate—it’s a mafia offer. 'Nice balance you got there... would be a shame if we compounded it.'

2. Brookfield swoops into the market like a vulture in a suit, feasting on distressed properties while whispering sweet nothings to investors about “opportunistic upside.”

3. Housing inventory climbs faster than your blood pressure reading after seeing mortgage calculators, with sellers slashing prices like Black Friday at a bankrupt Pottery Barn.

Let’s go!

TOP STORY

SWIPE NOW, CRY LATER

In Monroe County, Florida, where sunset selfies and seafood platters fuel the local economy, more than 1 in 10 credit card holders are now 60+ days behind on their bills, according to a new study. That’s not just a personal finance story, it’s a flashing red light for the broader economy.

What does falling behind on a bag of groceries have to do with real estate? Everything.

America is quietly maxing out its credit cards, trying to buy chicken thighs and Honey Nut Cheerios. Grocery prices have surged 24% since 2020 and are expected to rise another 3% in 2025. In response, households do what many do in a financial pinch: turn to plastic. According to the Urban Institute, 1 in 4 U.S. adults used a credit card to buy groceries last year and couldn't pay it off, triggering new waves of delinquency.

The result? A 39.8% spike in credit card delinquencies, with over 8.4 million Americans at least two months behind on payments as of August 2024. That's one out of every twenty cardholders, inching ever closer to financial quicksand.

And if you think that’s just a consumer debt problem, think again. It’s a housing one too.

The Feedback Loop of Financial Fragility

“Housing is the last domino,” says Christopher Herbert, managing director at Harvard’s Joint Center for Housing Studies. “When people get financially squeezed, they cut discretionary spending first, then groceries, and finally, they fall behind on rent or mortgage.”

This domino effect is particularly dangerous because it’s fueled by cumulative, compounding pressure: rising food costs, maxed-out credit, and near-usurious interest rates. Credit card APRs have surged past 28%, turning that $150 grocery bill into a long-term liability.

According to the New York Fed, the total value of seriously delinquent credit card balances hit $1.21 trillion by Q4 2024. A portion of that is tied to households juggling rent and rising living costs, especially in regions with food insecurity and housing unaffordability.

The Urban Institute’s report highlights that rural, Southern, and Western counties were hit hardest. 15 of the 20 U.S. counties with the highest credit card delinquency rates are rural areas that already face limited housing supply, stagnant wages, and, in some cases, real estate speculation driving up home prices.

No Credit, No Keys

Credit scores, like roofs, protect you (until they don’t). If you miss a payment by over 30 days, your score can drop by up to 100 points. That’s the difference between qualifying for a mortgage or being shown the door for housing.

Low scores not only lock families out of homeownership but also often lock them into more expensive rental arrangements. Landlords, increasingly reliant on automated tenant screening tools, treat subprime scores like scarlet letters. Some will not rent to anyone with a score below 620, effectively redlining the financially strained into even more precarious housing.

“Credit invisibility or poor credit is one of the silent housing barriers,” says Urban Institute senior fellow Laurie Goodman. “It doesn’t show up in eviction data or homelessness stats—but it absolutely affects where and how people live.”

The irony? The cost of not being able to own is itself rising. The national median rent now sits just under $2,000/month. For many, it’s not just a matter of affording a home—it’s affording any place to live.

Boiling the Frog, One Meal at a Time

Let’s not forget what got us here: inflation, plain and painful. Since 2020, total living costs have jumped 21%, with food rising even faster. For lower-income Americans—who spend up to one-third of their income on food—this is more than inconvenient. It’s devastating.

The ripple effect hits housing markets like a shockwave when groceries get more expensive. People delay moves. Skip mortgage payments. Rack up credit debt just to feed their kids. In housing terms, these aren’t just defaults waiting to happen—they’re demand shifts already in motion.

And don’t expect this to resolve itself. According to Feeding America’s food cost index, counties with the biggest spike in grocery costs also saw the largest growth in credit card delinquencies, suggesting a grim overlap between hunger and housing insecurity.

What This Means for Real Estate

For investors and market watchers, this isn’t just a macroeconomic blip. It’s a structural tremor.

• Landlords should brace for higher tenant default rates and increased demand for lower-cost, subprime-friendly rental units.

• Homebuilders may need to pivot toward smaller, more affordable starter homes—or risk building for a vanishing middle class.

• Mortgage lenders face a shrinking pool of qualified borrowers, especially among younger households with revolving debt.

• Municipalities may see rising homelessness and housing instability, especially if food inflation continues.

This isn’t just about breadlines and balances—it’s about the ongoing affordability crisis with credit cards as the canary in the housing coal mine.

SNIPPETS

1️⃣ Real Estate Bargains: Brookfield Asset Management is capitalizing on the current real estate market downturn by raising a massive $16 billion opportunistic fund, targeting distressed and undervalued properties at 20-40% below peak prices. The firm strategically focuses on apartment complexes and warehouses, taking advantage of market challenges by acquiring assets often below replacement costs. Their Q1 2025 fundraising of $5.9 billion reflects a broader recovery in real estate private equity, with global fundraising jumping from $32.5 billion to $57.1 billion year-over-year. Higher construction costs and reduced market competition create a unique investment landscape, allowing Brookfield to move aggressively in a less crowded market. (CRE Daily)

2️⃣ Fire Sale: Inventory is climbing like an overachieving rock climber, with a 30.6% year-over-year increase and the 18th consecutive month of growth. The national median list price held steady at $431,250, and 18% of listings saw price reductions—the highest April share since at least 2016. Buyers are gaining more options across all four U.S. regions, with the West (+41.7%) and South (+33.3%) seeing the most significant inventory jumps. Homes are taking slightly longer to sell, sitting at a median of 50 days on the market, 4 days longer than last year. The required income to afford a median-priced home is around $114,000 annually, representing a nearly $47,000 increase since 2019. (Realtor.com)

3️⃣ More Fire Sales? The office sector continues to struggle, with delinquency rates climbing back above 10% in April after a brief period of potential improvement, hitting 10.28% and representing a 52-basis-point increase. While office properties remain the most volatile and risky segment, other sectors show more promising trends: retail delinquency rates dropped 60 basis points to 7.12% in April, and industrial properties saw a modest 10-basis-point decline to 0.50%. These fluctuations signal ongoing challenges in the office market, suggesting caution and potential opportunities for strategic repositioning or selective investments in more stable sectors like retail and industrial. (Globe St)

4️⃣ Airbnb's Wobbly Ride: Airbnb experienced modest growth of 7.9% in nights and experiences booked, with notable regional variations: Latin America showed strong demand, while North America faced softer booking trends due to economic uncertainties. Total nights booked reached 143.1 million, generating $2.27 billion in revenue, and the company is strategically investing $200-250 million in expanding beyond traditional accommodations into new service verticals that could generate an additional $1 billion in annual revenue. Interestingly, Canadian travelers' shift from US destinations to Mexico created a 27% booking spike in Mexico, highlighting the dynamic nature of short-term rental markets. (Bloomberg)

5️⃣ There’s More: Vacation home demand in the U.S. has plummeted to its lowest level since at least 2018, with just 86,604 second-home mortgages issued in 2024—a 5% drop from the previous year and one-third of the volume seen during the pandemic boom. Redfin data shows this segment now represents just 2.6% of all mortgages, down from a peak of 5% in 2020. The steep decline is driven by high home prices, elevated mortgage and insurance costs, a cooling rental market, and the return of in-office work—factors that make second homes increasingly unaffordable and unnecessary. (Redfin)

6️⃣ Cooling Prices: U.S. home prices showed clear signs of cooling in February 2025, with the S&P CoreLogic Case-Shiller Index rising just 0.3% month-over-month, marking a sharp deceleration from previous months. Annual growth also slowed to 3.9%, down from 4.1% in January, as high mortgage rates and rising inventory tempered appreciation across major metros. Consumer confidence has eroded amid economic uncertainty, inflation pressures, and stagnant wage growth, making homes increasingly unaffordable. Despite past resilience, even affluent buyers, who rely on stock portfolios for down payments, feel the squeeze as tariffs and market volatility undermine financial cushions. (Zillow)