Quiet Cracking 🧪

In today’s edition:

• Interest rate cut expected
• Inventory continues trending up
• More lawsuits for Zillow

Avid readers of The Beaker know we love a catchy phrase to summarize an economic trend. In our journey together we have survived the Great Resignation, the Big Stay, Quiet Quitting, and more along the way. Now? Quiet Cracking is upon us. While the linked report is specifically studying a burned out workforce, it doesn’t feel like a stretch to say that Quiet Cracking could be a great way to describe the economy right now.

Stock markets continue to set records, earnings remain solid (Oracle is apparently doing just fine), and optimism from Small Businesses has remained stable (see nearby chart). But what about the consumer? Sentiment has fallen dramatically this year, consumers are ‘getting thrifty’, and the only headlines about the job market right now include the phrase “Downward revisions”. To me these look like cracks… but can they be filled before we start to hear them?

📊 PlanOlabs Insights

Proprietary insights into the SFR industry from our research and consulting team

Insight #1: Existing Home inventory sees a significant year-over-year increase compared to New Home inventory

Insight #2: Optimism for small businesses remains stable, while consumer sentiment has fallen dramatically

🎯 What’s Stirring

• The Fed is expected to cut rates by 25 basis points in its September meeting, with the chance of cuts at the next three meetings sitting at 75%. This would mark the first interest rate cut since December 2024. Chair Powell has hinted that cooling inflation and a weaker-than-expected jobs report (just 22,000 new jobs in August) “may warrant” easing, though he stressed the Fed will proceed “carefully”. For housing, lower rates could offer a shot of adrenaline to sluggish sales and refinancing, though affordability won’t be magically fixed. Still, this decision could help set the tone for housing demand heading into 2026.
• Existing home inventory climbed to its highest level since May 2020, according to the National Association of Realtors. Realtor.com reported price cuts on over 20% of inventory - a number not seen since Q4 2022, and before that in Q3 2018 (and if you want to get lost in fun charts, click on that Realtor.com link). This apparent shift towards a buyer’s market has been the theme of 2025 so far, and if we continue to see downward pressure on mortgage rates then maybe we will finally see home sales tick up? But that stubborn pricing story remains… homeowners have seen a 49% home price appreciation since July 2019, and the CEO of Invitation Homes still says “it is a big premium for homeowners to move right now.”
• Investor home purchases fell 17% year-over-year in Q2 marking the lowest second quarter since 2020, according to a new report by Redfin. Higher borrowing costs, thinner profit margins, and stubbornly high prices have made it harder to pencil out deals, especially in the starter-home segment where investors once dominated. Interestingly, investors’ share of existing home purchases climbed to 20% in August reaching a level only seen two other times since the beginning of 2020 (Jan ‘22, Feb ‘24). Maybe the downward pressure on prices, mortgage rates, and the upcoming interest rate decrease are opening the door for investors to jump back in.
• Rental regulations may in fact push rents almost 10% higher, according to a new study published by MetroSight economists Daniel Shoag and Issi Romem. The study found that source-of-income laws are linked to about a 5% rent bump, eviction protections add roughly 6%, and screening restrictions another 1–3%. The kicker in the study: these increases hit lower-income renters and small multifamily properties hardest, the very groups such rules are meant to protect. As Brad Hargreaves points out in his latest blog post, if policymakers keep squeezing operators with added rules while vilifying institutional buyers, they may be missing the bigger picture: the core problem is supply, and without it, even “protections” risk backfiring.
• CoStar has filed a federal lawsuit against Zillow alleging “rampant copyright infringement”, after discovering thousands of apartment listing photos lifted from its Apartments.com platform. Zillow quickly removed the disputed images, but CoStar claims the practice was systematic and designed to boost traffic for its Rentals Network. All this while Zillow also faces a lawsuit from Compass for its ongoing exclusive inventory battle. To follow these stories more closely, we always recommend subscribing to Mike DelPrete’s content.
  
  

📰 SFR In The News

Everyone knows this stuff and you should too.

• PlanOmatic launches Enhanced Virtual Staging (that’s us!)
• Zillow launches VOW to supplement IDX feed
• ARK Homes for Rent begins leasing “The Station at Kentmere” community
• Single Family build-to-rent starts down 50% in Q2 2025
• Rentvine makes the Inc 5000 list
• President Trump considers declaring a National Housing Emergency
  
  

The Beaker is a bi-weekly briefing from PlanOmatic on the economy, housing, and the forces shaping both. Have something we should cover? Reply to this email.

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