THE VERTICAL – Weekly Brief

A QUICK SCAN

Copper tariffs hit hard. Starting August 1st, that 50% tariff adds $$$ to every new home before you even break ground.

Sellers refuse to budge. Sure, active listings are up 29% year over year, but here's the kicker. 47% more homes are getting yanked off the market when owners don't get their asking price.

The housing shortage keeps growing. We're now ±4.7 million homes short nationwide.

Wall Street money is flowing again. Private label CMBS sales hit $59.6B in the first half of 2025, busiest start since 2007.

AI is eating everyone's lunch. Tools like Manus and Context AI are turning week long research projects into hour long sprints.

1 | THE GREAT STANDOFF: When Nobody Blinks

Sellers watched inventory climb and decided to dig their heels in deeper. Here's what that stubbornness looks like:

The Numbers:

• Homes pulled off market: +47% YOY (Phoenix leads the retreat with 30 delistings for every 100 new listings)

• Listings with price cuts: 20.6% (Record high for June since 2016)

• Days on market: 53 days (5 more than last year, overpricing now costs you an extra week)

What's really happening: Owners are sitting pretty with big equity or no mortgage at all. They'd rather wait than settle for less than they want.

Your move: Circle anything that's been listed for 60+ days. That's when motivation finally kicks in.

2 | THE BUILDING CRUNCH: When Deficit Meets Tariffs

The deficit reality:

• 4.7M homes short nationwide (up 159k)

• We built 1.4M homes in 2023, but needed 1.8M just to break even

• California's pain point: LA has 114k vacant homes while 453k families are doubling up

The tariff hit: Starting August 1st, that 50% copper tariff bumps wiring and plumbing costs. Smart contractors are pre buying spools and coils before suppliers catch up and re price everything.

And it's not just copper. Potential 25% duties on Korean and Japanese goods could spike prices on fridges, ranges, and excavators.

3 | MONEY & CREDIT: Rates Dip, Apps Spike

Rate Snapshot July 9, 2025

*Payment assumes a $250,000 loan (principal & interest only).

Rates dipped across the board to fresh three month lows, another reminder that even a few basis points can move buyers off the sidelines.

The market response:

• Applications jumped 9.4% last week

• VA refis surged 32%

The reality check: The median family needs to earn $17.7k more than last year for the same house.

Pro tip: Anything starting with 6.6 is today's “steal”. Lock it before August tariff chaos sends bonds higher.

4 | CONSERVATORSHIP CROSSROADS: The GSE Question

The talk in D.C. and New York: "Set Fannie and Freddie free."

The reality: They still need to raise $165B in capital before FHFA signs off. The fight comes down to explicit guarantee (Congress backed) versus the old implicit guarantee model.

What multifamily players are saying: "Do no harm. Keep the liquidity engine humming."

Bottom line: Expect years, not months. Any exit that doesn't lock in rock solid guarantees risks freezing the entire mortgage market.

5 | RENT & REMOTE WORK: The New Geography

The split:

• National average rent: $1,642 (-0.5% YOY)

• Sunbelt reality: Austin and Minneapolis rents are down 5-6% with big concessions

• LA stays strong: $2,652 (+1.1%) with 96% occupancy

Remote work breakdown:

• 21.6% of the workforce works remotely

• Women: 25% vs. Men: 19%

• College grads: 38% vs. non grads: 3%

The takeaway: Premium rent demand follows remote job hubs, even as average rents cool nationwide.

6 | CAPITAL FLOWS & DEALS: Money Finds Its Way

CMBS is back: $59.6B in the first half (+35% YOY). Four fifths is single asset/single borrower debt, with eight deals over $1B each.

Builder consolidation: Top 10 builders now control 44.7% of US single family closings (up from just 8.7% in 1989).

Vertical integration: Sumitomo's new Louisiana mill locks in lumber supply for ~14k homes per year and sets the stage for mass timber construction and true vertical integration.

Refi opportunity: Spreads are sitting in the low 90 basis points. Price your big loan now because tariff drama can yank risk spreads wide again.

7 | HOT PRICE POCKETS: Cities Bucking the Slowdown

Why these markets? Cheap entry prices plus tight supply equals Midwest and Northeast sleeper markets now outrunning Sunbelt darlings.

8 | AI TOOLBOX: The New Cheat Codes

Manus AI: Multi agent web crawler that cleans and exports data. We fed it one prompt and got 63 NYC capital shops with names, emails, check sizes, and land/building focused. Saved: 2 analyst days

Context AI: Dump your research, get an auto deck with citations. We threw in zoning memos and CEQA links, got a 12 slide lender deck in 90 seconds. Saved: 6 deck building hours

The prompt we actually used for Manus:

"Build a comprehensive list of equity providers headquartered in NYC that fund residential land, entitlement, development, or GP platforms. Need firm name, website, decision maker email/LinkedIn, firm type, and investment focus."

The magic combo: Use Manus for data mining, Context for storytelling. Your Monday research becomes a Wednesday pitch before competition even finds copy paste.

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Thought for the week: "America's 4.7 million home gap isn't just a housing stat, it's a living standard crisis. Closing it means builders, lenders, policymakers, and tech all pulling the same rope."

Questions, thoughts, or a deal to kick around? Hit reply, always up to dive in.

- Jake