Housing at Noon
Friday, October 30, 2026
It's absolutely dead quiet in my office. I don't know what's going on. Fridays are always quiet, but this is eerie. NYC isn't even in the top 10 cities with the most working from home, so I can only imagine how quiet your office is today if you're based in DC, San Fran, or Austin (see map below). In today's edition: an assortment of themes today which I won't even try to capture in a pithy way here—but for policy wonks, theme two about inclusionary zoning should be an interesting one.
| You’re receiving this daily briefing because you signed up for Housing at Noon or you subscribe to Home Economics on Substack. This is the free edition: links are disabled, and 11 of today’s 16 themes are only in the premium edition. |
| 1 | Q3 GDP Hits 3.4% But Residential Investment Stays Weak |
The US economy expanded at an annualized 3.4% in Q3, up from 2.2% in Q2 and the fastest pace in a year, the Bureau of Economic Analysis reported in its advance estimate. The FT reported the figure topped the 3.2% Bloomberg consensus, fueled by heavy AI-related corporate investment and continued consumer spending; business investment surged at its fastest pace since 2020, per CoStar. The NYT's Ben Casselman noted consumer spending grew at a 3.8% rate even as the household saving rate fell to 4.1%. For housing, the NAHB's Jing Fu flagged that residential investment remained a weak spot amid elevated borrowing costs, with Mortgage News Daily putting the 30-year fixed at 7.29%. The same report showed inflation easing on a quarterly basis — the PCE price index rose 2.1% versus 5.0% in Q2, core PCE 2.5%. I wrote in 2023 that residential investment—new construction, not home sales—is what swings GDP growth, which is why the economy can accelerate even as sales stays weak (my original analysis is here). The third-quarter GDP release, charted:  The economy grew at a 3.4% annual rate in the third quarter. Real GDP grew at a 3.4% annual rate in the third quarter of 2026; real residential investment fell at a 3.3% rate, contributing −0.12 percentage points to growth. FTCoStarNYTNAHBXBlueskyPolitico |
| 2 | Yglesias Reignites the Inclusionary Zoning Fight |
On Bluesky, @mattyglesias.bsky.social posted that exclusionary zoning is bad but inclusionary zoning is "also bad," linking his Substack argument. On X, he elaborated that unfunded IZ "counts on housing scarcity as its financing mechanism," so cities pursuing it can never — by definition — eliminate structural shortages. He added that the reform is to keep density bonuses and eliminate the IZ mandate: "the IZ part of the IZ package is bad." CONTEXT Inclusionary zoning is a local rule that requires or encourages developers of new market-rate housing to set aside a share of the units at rents or prices affordable to lower-income households. Mandatory programs make the set-aside a condition of approval, and many pair it with a density bonus that lets the developer build more units than zoning would otherwise allow. In unfunded programs, the cost of the below-market units falls on the project rather than on public budgets. A national census by Grounded Solutions Network counted 1,019 programs in 734 jurisdictions across 31 states and Washington, D.C., as of 2019, about three-quarters of them in New Jersey, California and Massachusetts. |
On X, @aaron_lubeck agreed more bluntly, calling the phrase oxymoronic — "all zoning is exclusionary." On X, @ArmandDoma defended IZ's underlying goal of economic integration, citing mobility and crime-reduction research, but argued it "should be paid for by general taxes, not a tax on new housing." On X, @aarmlovi modulated for experts: funded IZ doesn't tax construction and is justifiable via the "Chetty externality" from income-mixing, and solves the Hayekian siting problem for social housing. He detailed that density-bonus rents set below post-reform breakeven would still tax net operating income. On X, @michael_wiebe argued IZ works only when paid out of surplus land value created by upzoning — tax too much and projects die. His example: San Francisco concluded the most it could tax was 0%, then set the IZ rate at 5%. XBluesky |
| 3 | Rocket Companies results |
Rocket Companies posted a $709 million Q3 profit — reversing a year-ago loss — even as closed origination volume fell to $43.6 billion, per HousingWire. CEO Varun Krishna said Rocket gained purchase share to roughly 6.5% and refinance share to 15.5% while delivering its highest profitability margin in nearly five years "even as mortgage rates climbed to a three-year high." | “ | We didn't spend the last three years waiting for rates to fall. We acquired distribution, connected real estate and mortgage, and invested heavily in technology. We changed the economics of our business. Rates went up. We took share. Profits grew. That's not a coincidence. |
HousingWireLinkedIn |
| 4 | NYC Public School Enrollment Down 187,000 Since 2013 |
On X, Manhattan Borough President Mark Levine released a report finding K-12 enrollment in NYC public schools has dropped 187,000 students since 2013, with a projected further decline of 128,000 by 2034. Kindergarten enrollment alone fell from roughly 78,000 a year to just over 52,000, and the drop can't be explained by charter or homeschool growth. He flagged that the remaining students increasingly have greater needs — a rising share live in homeless shelters or temporary housing, or have disabilities. The School Construction Authority projects a loss of over 150,000 students in the next decade, the Manhattan Institute's Danyela Souza Egorov noted, arguing Chancellor Kamar Samuels is right to prioritize declining enrollment over segregation directly. More than 130 schools now have fewer than 150 students, and Black students are leaving the system fastest. Chalkbeat, via THE CITY, reported on the pressure building on the Mamdani administration to address the resulting glut of small schools. It centered on Murry Bergtraum High School — the city's smallest traditional high school at roughly 90 students — which carries a per-student budget nearly twice the city average yet offers only two math courses. XManhattanThe City ReporterSchoolsNyced |
| 5 | Rents rise for first time in 3 years as supply wave fades |
Apartment List reported median U.S. rent rose 0.1% in October — the first annual gain in more than three years — as an oversupply of new units gives way to tightening conditions, per CNBC. The national multifamily vacancy rate stood at 7% in October, elevated versus long-term norms but declining after peaking earlier this year. Apartment List chief economist Chris Salviati wrote that the market is "transitioning out of the soft conditions that have prevailed in recent years," with the concession rate still showing softness. The San Francisco Bay Area led the nation in rent growth at +13.1% y/y, followed by San Jose, while Phoenix, Las Vegas and San Antonio still posted the steepest declines. Apartment List's own November data for New York City showed median rent flat month-over-month at $2,593 but up 4.3% year-over-year, with YTD growth of 8.1% pacing above last year's 6.9%, per the firm's report.  Rent growth is steepest in the big economic centers CNBCApartment List |
More in the premium edition
September PCE Accelerates to 3.6%, Core at 3.1% Rocket posts $709M Q3 profit, warns refis could halve D.R. Horton bets on robotic framing in Phoenix Freddie Mac 30-year rate falls to 7.24%, second weekly drop Humboldt County abandons coastal road ahead of 'super' El Niño L.A. mayoral race splits on SB 79 transit upzoning Century, Meritage caught with excess inventory in Q3 2025 ACS Adds First EV, Solar, Sewer Data Josh Kushner's Thrive buys ADT in $15.3B home-security deal Thompson warns FHFA unified score grid may misprice risk Housing ballot measures across the states on Tuesday |
On the Front Pages
Paper of the Day
Nicholas B. Irwin, Mitchell R. Livy Journal of Housing Research · 2026-10-22 We examine the contagion effect of contemporaneous neighborhood house listings on a homeowner’s decision to sell their house. Using a spatially-explicit dataset of all residential parcels in the Baltimore, Maryland MSA from 2013 to 2015 and the MLS data on house listings, we estimate a series of duration models and find compelling evidence for a contagion effect with an 11–15 percent increase in listing likelihood across multiple dimensions of neighborhood size. Additional models to understand the economic mechanism driving this relationship suggest that large increases in school quality and better house quality magnify the contagion. These results indicate that a positive multiplier effect exists with nearby listings and add to an understudied literature on seller motivation.
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