If it’s not a buyer’s market, and it’s not a seller’s market, then what is it?

On Thursday, the National Realtors Association released new data that showed its Pending Home Sale Index — a proxy for home sales — fell to an all-time low in January. That’s just a day after the US Commerce Department said new home sales dropped over 10% from December to January, missing expectations. All while new supply is at its highest level since 2007. So will prospective buyers ever get an edge? Tough to say — though experts seem to agree that a fresh batch of tariffs, also confirmed by the White House on Thursday, aren’t likely to help.

Market Conditions

Simply put: Too many prospective buyers remain priced out of the market. Per the Commerce Department, the median home price increased almost 4% year-over-year last month to $446,300, the highest mark since October 2022. And despite a 100 basis-point cut to federal interest rates since September, mortgage rates remain stubbornly high (though down slightly, from around 7% to 6.85% from December to January, according to Freddie Mac data). Mix in economic uncertainty, and it’s easy to see why buyers are skittish.

The law of supply and demand should help: Just check out Austin, Texas, where a building boom has contributed to a 22% decline in rents in January from their August 2023 peak, according to a recent Bloomberg analysis. And the good news is that, nationally, construction on 115,000 houses was completed in January, a high since August 2009, while an all-time record 106,000 projects are waiting to begin. But the good news, well, it comes with some bad news:

• High inventory tends to mean builders grow reluctant to start new projects. And the National Association of Homebuilders (NAHB) in its latest report last week said that builder confidence has fallen to a five-month low.
• That’s partially due to tariffs, and Trump 2.0 said yesterday its planned 25% tariffs on goods from Mexico and Canada plus additional 10% tariffs on goods from China will begin on Tuesday. According to the NAHB, 7% of all goods used in new home construction are imported, while 32% of home appliances are imported.

Price Go Up: In other words, home prices are likely to keep going up. By how much exactly? According to real estate data firm CoreLogic, tariffs on building materials could hike new home construction costs by as much as $22,000. Meanwhile, Morgan Stanley economists think tariffs could increase inflation, estimating the Personal Consumption Expenditures index could soon rise by as much as 0.6%. Which is likely going to deter the Federal Reserve from lowering rates at its next meeting. Which means mortgage rates are likely to stay elevated. Which means prospective home buyers… well. They already know how they’re feeling.

As DJ Khaled once said, “Anotha one!”

Tencent added its own AI announcement to the growing list yesterday: The Chinese company best known for mobile games like “Honor of Kings” released an AI assistant it said can answer users’ questions faster than home-country rival DeepSeek. The “Hunyuan Turbo S” model is designed to beat DeepSeek’s eponymous assistant to the buzzer, answering queries within seconds while DeepSeek mulls ’em over. Tencent says its model’s fast thinking also makes it more cost-efficient.

Alibaba recently dropped an updated AI model that it said surpasses DeepSeek, and the China-based company’s stock popped last week after it said it’ll make “aggressive” investments into its AI offerings.

And further up the supply chain, the race to build the best-selling AI-powering semiconductor chips is getting sweaty as companies cut costs.

Chipper by the Dozen

Industry leader Nvidia reported 78% sales growth in the most recent quarter. But that’s down from tripling during the same period last year, and its stock fell as enthusiasm for expensive chips cooled and macroeconomic concerns (aka tariffs) heated up.

One point Chinese AI companies including Tencent and DeepSeek emphasize about their new models: efficiency. They say their models require less processing power to tackle questions of the same complexity as peers like OpenAI’s ChatGPT, making them more energy-efficient and cost-effective. OpenAI, for its part, released its latest AI model yesterday, and said it is more expensive than its previous model (though won’t replace it entirely).

Still, less demanding models from Tencent and DeepSeek could dent demand for the most advanced chips:

• Nvidia warned yesterday that Chinese chipmaker Huawei is hot on its heels, as the company known for its smartphones churns out advanced, cheaper chips despite a barrage of US sanctions blocking Beijing’s access to top chip tech. 
• As Chinese companies cut AI costs, US AI companies like OpenAI could feel pressure to follow suit and demand for Nvidia’s top-of-the-line chips could slip.

At the same time, the AI industry’s bracing for the impact of Trump’s promised tariffs, which are expected to raise the price of key chip-making components.

Pressure’s on: AI companies are burning through billions to beat rivals’ AI models. But as AI assistants struggle to correctly answer user queries like, “How many ‘r’s are in the word ‘strawberry’?” while telling other users it’s safe to eat rocks, AI companies could soon be forced to justify whether the juice is worth the uber-expensive squeeze.

The Trump administration’s feather-light regulatory touch was on full display again Thursday.

The Consumer Financial Protection Bureau said it was dropping four cases against companies accused of illegally cheating millions of customers, including banking giant Capital One and a subsidiary of Warren Buffett’s Berkshire Hathaway. It could go down as the day that defined the next four years of corporate oversight, or lack thereof.

Ecstatic vs. Apoplectic

The cases that the CFPB dropped didn’t exactly involve harmless jaywalking claims. Last month, the agency accused Capital One of illegally misleading millions of consumers by claiming its flagship savings account had one of the “highest” interest rates available, only to freeze the rate when interest rate levels rose across the US. In the process, the CFPB alleged, the bank cheated millions of customers out of roughly $2 billion in interest payments.

Less than two weeks earlier, the CFPB had accused Vanderbilt, a home loan unit of Berkshire, of funneling borrowers into mortgages they couldn’t afford to buy houses from another Berkshire unit, Clayton Homes. Some borrowers, it said, were driven into bankruptcy. The other actions dropped Thursday included a lawsuit against a student loan provider accused of illegally collecting on loans that were discharged in bankruptcy and a suit against mortgage lender Rocket for allegedly giving illegal kickbacks to real estate brokerages in exchange for sending business to one of its affiliates.

Companies formerly in the CFPB’s crosshairs could hardly contain their glee, of course, but watchdog groups were apoplectic:

• In a statement, Rocket said it was “proud to put this matter behind us” and Capital One said: “We welcome the CFPB’s decision to dismiss this action, which we strongly disputed.” Shares of Berkshire, Capital One, and Rocket Companies all rose following the dismissals.
• “The common thread in these cases are allegations that the companies routinely lie, cheat, and steal their way into their customers’ pocketbooks,” said Brady Williams, legal counsel for the non-profit regulatory advocacy group Better Markets. “The CFPB has been the only cop on the beat protecting consumers’ interests.”

What’s Next? The Trump administration has already fired dozens of CFPB staff, closed its D.C. offices and placed other agency workers on temporary leave. In court filings, the administration said it plans to run a streamlined CFPB. Trump’s nominee to run the agency, Jonathan McKernan, told the Senate Banking Committee on Thursday that the bureau had “pushed beyond the limits of statutory authority” under the Biden administration and “offended our basic notions of fairness and due process when it has regulated by enforcement.” So expect regulation without enforcement?