U.S. Industrial Market Finds Its Footing After Years of Adjustment

• Supply sigh: After a bruising three-year slide, the industrial real estate market is finally finding its footing.

• Exit fee: Bill Ackman wants to cut mortgage rates by making it harder for homeowners to refinance or pay off their loans early.

• Build bigly: Trump aims to cut housing costs by pushing cities to build more, faster, with federal money tied to zoning and permitting reform.

Industrial

U.S. Industrial Market Finds Its Footing After Years of Adjustment

After three years of turbulence, the U.S. industrial market is finally showing signs that it has stopped drifting. Savills’ latest Q4 2025 data points to a subtle but important shift: vacancy is no longer climbing, and the supply-demand equation is starting to feel more balanced than bloated.

That does not mean a boom is coming back. Rents are barely moving, tenants are cautious, and a huge amount of space is still working its way through the system. But beneath the surface, key indicators like absorption and sublease space are beginning to stabilize in ways that typically mark the end of a downshift.

The question now is not how bad things will get, but what this next, calmer phase looks like. With construction pulling back, landlords prioritizing occupancy, and occupiers finishing their right-sizing, the industrial sector may be entering a slower, steadier cycle that favors discipline over exuberance.

Overheard

Bill Ackman Wants to Rewrite the 30 Year Mortgage

Billionaire investor Bill Ackman has pitched an unusual idea to lower U.S. mortgage rates: require prepayment penalties on new home loans, making it more costly to pay off or refinance early. He argues that if borrowers give up the right to prepay without penalty, lenders and buyers of mortgage-backed securities would accept lower yields, potentially shaving about 0.65 percentage points off current 30-year rates around 6.16 percent. In essence, cutting early exit rights could trade flexibility for a lower long-term cost of borrowing.

Prepayment penalties were once common and remain standard in some mortgage markets overseas, but they largely disappeared from conventional U.S. 30-year fixed mortgages because free prepayment rights are a key feature of the market, especially for government-backed loans. Mortgage buyers and agency investors typically charge higher spreads when loans can be refinanced or paid off early, because prepayment risk makes cash flows less predictable. By making early payoff harder, Ackman believes the risk premium built into rates could shrink, lowering ongoing borrowing costs for many buyers.

If adopted, the idea would ripple across real estate finance. Lower headline mortgage rates could lift homebuying in an affordability-strained market, while limits on prepayment would reshape refinancing, MBS liquidity, and risk across lenders, investors, and borrowers. With refinance activity dampened, mobility and turnover would slow, forcing institutions to reprice risk. At its core, the proposal exposes a deeper tension between stabilizing mortgage markets and preserving flexibility for homeowners.

Trump’s Housing Agenda Puts Federal Muscle Behind Affordability Goals

In a policy pivot on housing affordability, President Trump rolled out a broad suite of proposals meant to ease the cost of homes and rentals. The agenda covers everything from zoning and permitting reform to tax incentives, regulatory pruning and financing adjustments designed to accelerate housing supply and make ownership and renting more attainable. These proposals shine a federal spotlight on housing supply constraints and cost drivers that have ballooned over the past decade.

Among the proposals likely to have the most direct impact on real estate is a push to overhaul zoning and land-use rules, particularly at the local level. Trump’s plan calls for tying certain federal infrastructure dollars to municipal permitting performance, effectively incentivizing cities and counties to loosen restrictive zoning, reduce needless process delays and approve more housing developments. This could unlock new single-family and multifamily supply in markets still reeling from underproduction, potentially moderating price escalation and lowering rent growth over time. Regions where local regulation has been most restrictive may see increased development activity as capital and homebuilders respond to policy encouragement.

Other elements of the plan include expanding tax incentives for the development of affordable housing and providing more tax-efficient mechanisms for private investment in workforce housing. The proposals also emphasize trust in streamlined environmental reviews and quicker approval paths for projects that meet certain affordability benchmarks. If implemented, these could improve project pro formas in historically constrained markets where long lead times and costly entitlements erode returns and deter builders.

These federal signals might finally begin to influence local behavior on zoning, permitting, and infrastructure prioritization. Developers could accelerate entitlement and construction planning in anticipation of a more hospitable national policy backdrop, and lenders might adjust risk models if permitting risk begins to abate. While the details and timelines of any legislation remain uncertain, the emphasis on supply, permitting incentives, and affordability-linked federal funding could reshape housing development economics in the years ahead.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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