‘Artists often fail when you give up too much responsibility to others.’
Trailblazers is an MBW interview series that turns the spotlight on music entrepreneurs with the potential to become the global business power players of tomorrow. This time, we meet Alternate Side Management founders Evange Livanos and Zack Zarrillo. Trailblazers is supported by TuneCore.
Alternate Side Management, which represents a string of acts in the alternative/rock space, is enjoying a purple patch as it closes in on a decade in business.
Michigan emo band Hot Mulligan have a busy summer playing many of this year’s major festivals, including Coachella, Governors Ball, and Bonnaroo; rock act Citizen are about to announce their biggest capacity show yet; and Cavetown recently co-headlined the 9,500-plus-capacity Red Rocks venue in Colorado.
The company has spent the last seven years carefully building out its clients’ careers by putting the grueling groundwork into touring, encouraging catalog ownership, and empowering acts to be the CEO of their businesses, according to founders Evange Livanos and Zack Zarrillo.
During that time, the Alternate Side team has grown to 12 team members in New York and Los Angeles (and in-between), who preside over in-house distribution, publishing, touring, marketing and vinyl production. Today, there are more than 30 clients on the roster, who have multiple platinum and gold singles between them.
The inspiration for Alternate Side originally came from Livanos, who left a job at a bigger management company to have more autonomy over the acts she worked with. “I wanted to represent artists that I believed in and loved, versus stuff that I was just handed,” she says. “This is a stressful job, so if I’m going to be stressed about it, I’d like it to be for stuff that gets me out of bed in the morning.”
After working for a few bands in the metal world at a time when post-hardcore was making a comeback, Livanos met Zarrillo, and the two started a working relationship that eventually led to launching the business.
Zarrillo, who says he never wanted to be a manager, fell into the music business via Chicago rock act Knuckle Puck. The band needed guidance, so a then 20-year-old Zarrillo, who had been running a punk blog and was looking for something to distract him from college, took on the task.
He remembers: “I had no idea what I was doing, but I did know Evange and she needed some help. I needed my band not to be poached from me, especially because they started doing well right away, and it seemed like a good opportunity to learn.”
Other highlights coming up this year and beyond for the Alternate Side roster include the continued development of Californian post-hardcore band Dayseeker; the sixth LP from Citizen; up-and-coming alt-pop duo Daisy Grenade; and the growth of British singer and songwriter Cavetown.
Here, we chat to Livanos and Zarrillo about dos and don’ts of artist management, the evolution of streaming, label deals in 2026, lessons learned across their careers, and much more besides.
WHAT’S YOUR APPROACH TO MANAGEMENT, AND HOW HAS THAT BEEN SHAPED?
Evange Livanos: What makes a good manager is your ability to be flexible, nimble, and bend to what each artist needs, because every artist is completely different. Some want to be signed, some don’t want to be signed. You have to know how to navigate the business.
Also, allowing an artist to be an artist, standing in front of them and taking the shots so they can go be creative and don’t have to know all of the ugly stuff around it. At the same time, we have the mantra of artists being business owners, understanding their business, and educating them.
We don’t believe in the dumb artist vibe where the manager just tells them what to do. We want to educate them to understand that owning their catalog and being a self-sufficient business is the most important thing. Being cheap on the road until you don’t need to be is very important, and we’ve made an entire company and living off of being scrappy from touring, to the point now where our bands are touring in buses, but they’re still very frugal and careful because we instill that in them very early on in their careers.
“We don’t believe in the dumb artist vibe where the manager just tells them what to do. We want to educate them to understand that owning their catalog and being a self-sufficient business is the most important thing.”
Evange Livanos
Zack Zarrillo: We’re a fiercely independent company. When Evange and I started doing this, the type of artists we were managing were never going to be on a major label. So we had to build up our core competencies as managers and as a company.
Our artists at the time could only make money if they were touring. Knuckle Puck, the first band I truly managed, got paid $150 a night for their first 30-day tour. They slept on floors, in Walmart parking lots, and made a ton of money. So I actually made money for the first-ever tour a client did, which is unheard of, because we were very resourceful and our clients are very resourceful.
We tend to struggle when we start managing an artist who is not willing to also roll up their sleeves to do the work. We want to find artists who want managers not to just make their life easier, which is partially what we should be doing, but who want to go that much further. That’s how we find success. We always tell artists that, at the end of the day, no one can care more than you. We also have to bring that same mentality to the job we do every day.
ACROSS THE EVOLUTION OF YOUR COMPANY, STREAMING HAS HUGELY INCREASED IN IMPORTANCE. IS THAT A BLESSING OR A CURSE FOR YOUR ROSTER, THE MAJORITY OF WHICH EXISTS IN THE ALTERNATIVE ROCK SPACE?
ZZ: It has completely reshaped our company, and we’re really proud of it. Our artists combined make seven figures a year from owning their own catalog or from owning chunks of their own catalog. We really believe that artists should own as much of their catalog as possible, but that’s not where the job ends; that’s where the job starts. We have to then make sure we are working for that catalog to be valuable for them, too.
I have a separate company called Many Hats that started to make sure we were getting the best distribution rates for our artists possible, so we could make vinyl for them and put it into retail stores, doing the bare minimum a label could do.
There were times when we had artists signed to a 50:50 deal with a label that spent $10,000 one time and then made 50% of the profit forever, which is egregious. We have bands like Hot Mulligan, who got their catalog back from a label that was delinquent in paying royalties.
The catalog for that band had been severely under-managed at retail in terms of vinyl, and now, the band’s catalog has sold nearly 100,000 pieces of vinyl.
THE OLD IDEA WAS THAT YOU WOULD SIGN AWAY YOUR CATALOG IN EXCHANGE FOR A MAJOR LABEL DEAL AND ALL THE BELLS AND WHISTLES THAT MIGHT COME AS PART OF THAT. WHAT IS THE ROLE OF A LABEL IN 2026? WHERE’S THE VALUE THERE?
EL: Financially, first and foremost. If you’re a developing act that doesn’t have the money to make the record they want to make, the label is going to be helpful with that. We’re pro-independent and pro-label, depending on the label’s effectiveness.
They can be a really useful partner and provide extra brains and ideas in the room when needed, but we don’t put all our weight on the label. We almost pretend that they don’t exist at certain times, go to them with our ideas, and do it collaboratively. The label could be helpful if you want to go to the radio and take those bigger swings, but you have to be at a certain level to do that. I don’t think a label is extremely necessary for certain developing acts at this time, when it’s really just based on touring.
WHAT DOES A FAIR LABEL DEAL LOOK LIKE TO YOU?
EL: You get your masters back like a licensing deal, a decent amount up-front to make the record that you want, some marketing budget to do all the things you need to do to market that album. No 360 and allow the artist to be creative. We will refuse to do deals if we have to do the catalog, and we’ve actually just done that with an artist. We will never do master ownership deals ever again.
HOW OPEN ARE LABELS TO DOING DEALS LIKE THAT THESE DAYS?
ZZ: The funny thing is, the major labels are much more open to it than indie labels. Obviously, the major labels are never going to give up their Bruce Springsteen or Bob Dylan catalogs, so they always have money to hit. As someone who owns a label, I’m quite sympathetic to the desire to own masters, but I believe that it’s just not in the service of a good partnership.
We very much push for [licensing deals], but sometimes we have to recognize that we have to meet artists where they are and what’s important to them. If it is the most critical thing in the world for them to sign to indie label X and the deal is worse than major label Y or indie label Z, that’s okay. We don’t get to make every decision. But like Evange said, once we sign to a label, my desire is that our team works harder.
It isn’t that we let the label do everything. Artists often fail when you give up too much responsibility to others. We have to ultimately own every decision that gets made. Even if someone else messed up, we’re still managing the ship.
CAN YOU recall A FAILURE OR A SETBACK THAT BECAME A TURNING POINT IN HOW YOU OPERATE TODAY?
ZZ: We’ve had a lot of artists who have suffered from really hard mental health problems. There is nothing that will humble you quicker than some of those problems. The bullshit of the job often just stops mattering at that moment.
But it’s always the hardest, to me anyway, when an artist is doing really well, and something pops up that is not their fault, and it derails things. It’s tough because you don’t know when the train is going to get back on the tracks and you have tours, timelines, labels and investments.
HOW DO YOU NAVIGATE THAT AS A MANAGER? HOW DO YOU BEST SUPPORT YOUR ARTISTS THROUGH THAT WHILE KEEPING AN EYE ON THE BUSINESS?
ZZ: You have to stand in front of them in those moments. If there’s pressure from labels, booking agents, publishers, they never know about it. You take the shots, you deal with it, you help. Many artists find therapists, counseling, support, and rehab.
“HOPEFULLY, ALL MANAGERS REALLY CARE ABOUT THE PEOPLE, NOT JUST THE ARTIST AND THE BUSINESS.”
Hopefully, all managers really care about the people, not just the artist and the business. Our job does start and stop somewhere but, for better and maybe sometimes for worse, we are very invested in the people behind these bands and careers as well and are doing whatever we can to help get them right.
THERE ARE A LOT OF STRUCTURAL CHANGES HAPPENING ACROSS THE MUSIC BUSINESS AT THE MOMENT. WHAT IMPACT DO YOU SEE THAT HAVING, IF ANY, ON THE WIDER BUSINESS?
ZZ: There’s a lot of consolidation right now. If BMG does buy Concord [BMG and Concord have since confirmed their merger on April 28, 2026], they would essentially be a fourth major label, and I would like that. I would like there to be more competition against Warner, Sony, and Universal. To me, that’s exciting. It’s an interesting time right now. I’m not that pessimistic about it. There are a lot of smaller distributors that are offering really great deals for artists. Depending on the type of artist you are, there are more options than you’ve ever had before. I also think deals for majors have never been better.
HOW DO YOU SEE THE ROLE OF A MANAGER CONTINUING TO CHANGE OVER THE NEXT FIVE TO 10 YEARS?
EL: We’re going to become more and more needed. We do the job of a lot of facets of the business. We have to think like a label, a publisher, a booking agent, and we have to make sure all of those people are doing what they need to be doing. That’s just going to continue, especially if labels are consolidating and there’s no more street team or touring department, and you have to outsource everything. We have databases of videographers, photographers, and crew; we no longer rely on anyone for anything. More of the infrastructure is going to be reliant on the manager and a management company than the labels, as things start to change around.
EVANGE, YOU’VE SPOKEN BEFORE ABOUT THE IMPORTANCE OF TELLING ARTISTS NO. HOW DO YOU BALANCE THAT WITH RESPECTING THEIR AUTONOMY AND CREATIVE VISION?
EL: You have to explain the reasons why something is a no. It’s never, ‘You can’t do this’, it’s, ‘I don’t think this is a good move, and this is why, this is what can happen, let’s try something else instead’. When I was younger, I never went against what the artist wanted to do; the artist knew best because I was terrified of getting fired. But I’ve been fired plenty of times so I’m now at the point where I’m going to tell an artist exactly what they should and shouldn’t be doing for their business. It’s up to them if they want to listen.
WHAT ARE THE MOST COMMON MISTAKES THAT YOU SEE YOUNG MANAGERS MAKING?
ZZ: Good managers do research, try to solve a problem, and if they get stuck or want advice, they ask for help. Bad managers are arrogant, they don’t ask for help, and they can burn a lot of bridges quickly. It’s tough to have bad relationships in this business because people tend to stick around for a long time. It is shocking sometimes how someone will come back around that you haven’t spoken to for seven years and is now doing really well. Keeping good relationships is critical because having bad relationships affects your artists. If you’re compromised as a manager, they’re compromised as an artist.
WHAT ARE THE MOST IMPORTANT ELEMENTS OF SUCCESSFUL ARTIST DEVELOPMENT IN 2026?
EL: An artist really needs to know their identity, audience, and brand. They have to know how to speak to their fans. Part of artist development is knowing how to work social media to their advantage, to show off their songs, their personalities, and they have to be willing to grind, which didn’t change. You still have to get in the van, play the shows for low guarantees and not necessarily make a profit. It’s also important for artists to be determined, be smart about their business, and educate themselves about the industry.
YOU’VE SPOKEN A LOT ABOUT THE IMPORTANCE OF TOURING. IS THAT HOW YOU’RE SEEING YOUR NEW ARTISTS CONNECT WITH AUDIENCES IN A CROWDED MARKET?
ZZ: Touring becomes sustainable when artists can forge a direct connection with their audience. We’ve worked with artists who have had bright streaming/viral moments, but ultimately aren’t able to connect to an audience. If that can’t happen, you lose momentum.
We did quite well coming out of Covid because we were saying, ‘We’re only going to manage you if you’re going to go on the road and put the work in there. If you aren’t, we’re probably not the right person for you’.
A lot of younger managers who are new at this and working with someone whose song is going viral on TikTok often don’t know how to, or don’t want to, push their artists to get on the road. It almost always falls apart because there isn’t an actual connection. Fans are not wearing your merch; they’re not seeing other people feel and go through the same experience as them in a live environment. Touring is where our foundation lies, and that’s where the magic happens.
HAVING BUILT THAT INITIAL FOUNDATION, WHAT ARE THE FACTORS THAT THEN GO INTO BUILDING A SUSTAINABLE, LONG-TERM CAREER FOR AN ARTIST TODAY?
Evange: It starts and ends with the music, first and foremost. Touring and connecting with the fans, not just playing the show and leaving. When an artist is small, when they stay behind and meet every single fan that comes to a show, like in a 250 capacity room, those kids remember, and they come back.
I have an artist who has such a rabid fan base. It’s not large but he makes a great living because when he was starting out, he would meet every single fan at the end of the night. The venues hated us because we would constantly hit the curfew. Because of that, they stuck with him through all the different types of genre changes.
At the end of the day, how many one-hit wonders or fluffy songs do you hear? When I go to the gym, I’ll hear a song that’s super catchy, but who is this person, and who are they in five years? An important question we tend to ask ourselves is, ‘Does this artist we’re talking to or interested in have a future? Does it have staying power? Are we chasing it because everybody else is and it’s viral or does it really have stickiness?’ Songs that have meaning, that express anguish or a situation they’ve gone through, connect to an audience a lot more than a fluffy, fun dancing song, and are going to keep kids sticking around. It’s really important for artists to have substance to [their work].
“It starts and ends with the music.”
Evange Livanos
ZZ: A very boring answer on the other side is that we put a lot of work into making sure our artists, when possible, are in a good financial place. We have worked with artists who have done big deals and, unfortunately, have been irresponsible with their money. That makes it hard when times are maybe less good to get through to the other side. There are cycles in music. There’s a band in our world called Pierce The Veil that has been around for 20 years.
They got popular, the genre they are in got less popular, and they were in a lower place in their career for years. Now they’re playing arenas. Especially in our world, there’s a lot of ups and downs.
Can you ride it out for the up again? I’ve worked with artists since they were 15 or 16, and you’re kind of asking them to live in some version of arrested development forever. So it’s important that you’re educating and have good business managers or financial people around these artists who can help make them stable at home. That all affects the mental health aspect of this too.
HOW DO YOU FEEL ABOUT THE IMPACT OF AI ON THE MUSIC BUSINESS?
ZZ: I don’t have a lot of concern. There are aspects of AI that can help make our tasks better, and there’s definitely going to be bullshit that we have to deal with because of scams of our artists. I’m sure in the next year or two, there will be some very popular viral song that is totally made with AI. But I don’t think that’s ultimately going to take away the connection that a Cavetown, a Hot Mulligan, or a Citizen has to the thousands of people whose lives they’ve affected.
EL: I’m really against AI music taking up any playlisting spaces from a real, live, bleeding heart, creative individual, who is writing in their room at night. You’ve got these AI bots that are creating songs, putting them up online, and they get streams and make money. I hate that, it really makes me angry because it’s a scam. I love AI tools to help simplify our jobs. If an artist can get help with creating through AI, cool, but I’m so anti the AI-formed music that gets released.
IF YOU COULD CHANGE ONE THING ABOUT THE MUSIC INDUSTRY TODAY, WHAT WOULD IT BE AND WHY?
EL: I would have more women presidents running the industry. It’s still, like it or not, very male-dominated. That is just the way this business was built. It’s gotten a lot better, but I would like to see more women in power to change up the regime. We already know what it feels like and acts like when men are in charge. I’m not anti-man; my business partner is a guy, but I do think women see things differently, and the business could be softer.
“A lot of our artists would struggle less and be able to make better art and have a better life if, here in America, they had better support, healthcare, and systems.”
Zack Zarrillo
ZZ: I wish there were some better structure around the music industry, like there is in Hollywood, for example. The great thing about this industry is that you can start as an artist in your bedroom and have an amazing career, but the tough side is there are so many people, and we know many of them and have worked with many of them, who sleep on floors, cross the country or the world to get paid $200 to $400 a night with two to five people in the van or more. It’s quite grueling, and there’s no backstop.
A lot of our artists would struggle less and be able to make better art and have a better life if, here in America, they had better support, healthcare, and systems. It’s always funny to me when the Hollywood strikes are happening, which happen for good reasons that I’m totally sympathetic to, but at the same time, man, anything is better than what’s happening here, where there’s nothing.
Trailblazers is supported by TuneCore. TuneCore provides self-releasing artists with technology and services across distribution, publishing administration, and a range of promotional services. TuneCore is part of Believe.Music Business Worldwide
Attention Bias in AI-Driven Investing
Other recent work documents systematic biases in LLM-based financial analysis, including foreign bias in cross-border predictions (Cao, Wang, and Xiang, 2025) and sector and size biases in investment recommendations (Choi, Lopez-Lira, and Lee, 2025). Building on this emerging literature, four potential channels are especially relevant for investment practitioners:
1. Size bias: Large firms receive more analyst coverage and media attention, therefore LLMs have more textual information about them, which can translate into more confident and often more optimistic forecasts. Smaller firms, by contrast, may be treated conservatively simply because less information exists in the training data.
2. Sector bias: Technology and financial stocks dominate business news and online discussions. If AI models internalize this optimism, they may systematically assign higher expected returns or more favorable recommendations to these sectors, regardless of valuation or cycle risk.
3. Volume bias: Highly liquid stocks generate more trading commentary, news flow, and price discussion. AI models may implicitly prefer these names because they appear more frequently in training data.
4. Attention bias: Stocks with strong social media presence or high search activity tend to attract disproportionate investor attention. AI models trained on internet content may inherit this hype effect, reinforcing popularity rather than fundamentals.
These biases matter because they can distort both idea generation and risk allocation. If AI tools overweight familiar names, investors may unknowingly reduce diversification and overlook under-researched opportunities.
How these top producers crushed it in a tough market
Maintaining a back-to-basics philosophy in turbulent times is what helped set these leading mortgage originators ahead of the crowd during 2025.
Processing Content
The No. 1 producer, Shant Banosian, added to his responsibilities in 2025,
Still, he stuck to the basics, working with his Realtor referral partners, helping them navigate what proved to be a challenging market, with inventory remaining low and mortgage rates staying elevated.
THE FULL LIST OF TOP PRODUCERS OF 2026
Banosian’s office is located in the Boston suburb of Waltham, Massachusetts.
“In a low inventory market, it’s extremely difficult to get your offer accepted,” Banosian said. “We helped our agent partners and our clients figure out ways for their offer to stand out [while] offering certainty and speed.”
He and his team also spent time coaching clients to help them understand their best financing solutions to get the most out of their budgets.
Being prepared for the opportunities
But this is not the end of it. The fourth quarter last year provided a brief refinance window. “Whenever rates do come down, it’s really, really important that you stay in communication with your database and show them what the opportunities in the market,” Banosian said.
Being both president of a large originator like Rate as well as maintaining his own production required him to stay disciplined and committed to both and understanding where his highest and best use was.
He noted his “world-class team” which has contributed to his success as an originator over the years, and Banosian relied on them more than ever. On the corporate side, he used the term “world-class” again for the people and technology he works with.
“Being able to teach, coach and mentor the loan officers here in terms of what I built, and work alongside them to help them came naturally, because I was speaking from something that I lived and breathed for the last 15 years,” Banosian said.
Sticking with the tried and true
Mark Cohen, CEO and founder at Cohen Financial of Beverly Hills, California,
“Just the consistency, following through, knowledge, being available, being straightforward, and delivering the best execution and products for my clients,” Cohen said.
It’s been a turbulent economy, but the market has heavy demand for housing, and many of those borrowers are in the non-qualified mortgage part of the business. Those loans have well received by Wall Street, and as a result, rates have come down, Cohen noted. His primary market is Southern California, which has some of the highest home prices in the nation.
“The market is very attractive, and there’s lots of opportunities out there,” Cohen said. To take advantage, he has become more aggressive in his business development efforts.
Also adopting the back to basics philosophy is Amanda Sessa, vice president and senior loan officer in the Boulder, Colorado office of SWBC Mortgage.
“That’s what a lot of us old school lenders, loan officers, are having to do, is in the last few years, is really go back to reforming relationships,” Sessa said. For example, she has done continuing education courses or mortgage updates.
Those efforts have been well received and helped brand her as an expert in the field, said Sessa, whose husband John is the branch manager and senior loan officer in the office.
The competition level is also rising, Sessa noted. “There’s a lot of loan officers that have picked up their game that have had us stay on our toes too,” she said, contending for real estate agent business.
“That was a little bit of a wake-up call to me,” she said. “I was like, we’ve got to keep marketing our current Realtors and keep in touch and taking care of them, and not fall asleep at the wheel.”
Sessa did
Marketing plans for 2026
For 2026 the Sessas will continue to market themselves as consultants to their consumers, much in the same way as a certified public accountant or financial planner. “We’re there to help with the market changes,” she said.
All producers need to deal with the unexpected, but the key to success is how originators handle those events.
“You’re going to have your forecasts every single year, and the forecasts are always almost going to be wrong every single time,” Banosian said. “I don’t know that we’ve ever gone into a year and all the predictions and forecasts have come true.”
Right now, it is the middle of the spring home purchase season, and he pointed out mortgage rates are much better today than they were at this time in 2025.
Rates are going to rise and fall. Those remain out of originators’ control.
“What we can control is the strategy that we’re going to implement, the basic fundamentals, the actions, the activities that we do every single day to help us take advantage of whatever the market presents us and do it better for our clients and partners than anybody else is doing it,” Banosian said.
In fact, given
“The cool part is, there’s never been a better time to be a loan officer ever in the history of the mortgage business,” Banosian said. “We’ve got more tools and technology at our disposal than ever, we can do things faster and communicate faster and we’ve got less competition” as the number of mortgage loan officers is dropping. This opportunity to build market share is one of the things that keeps him excited for the business.
Finding a niche to focus on
Find a market niche and focus on it, Cohen said. For him this is offering the various non-qualified mortgage products, including debt service coverage ratio loans.
Originators “have to adapt to the market, and be able to do everything effectively,” he said.
Sessa has been very good with keeping up with her database, and doing things like client appreciation parties. It’s not forgetting about the group of people who already believe in you.
“That’s our raving fans, and that’s grown to be a quite sizable and pretty amazing group,” she said. “One of the goals I have for 26 is really to up my game on that and keep in front of them, whether it’s through a BombBomb (a video engagement platform) or a note, or some sort of anniversary reach out, or another client appreciation extravaganza.”
Sessa said she does not need to be everything to everybody, but looks to be the one who borrowers think of in the Boulder marketplace.
Here’s How Much Exposure JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup Have to Private Credit
Private credit has certainly been a buzzword this year, as the multitrillion-dollar industry has shown cracks in credit quality, and investors fret that problems in the sector could lead to broader market risks.
One area that has come under some scrutiny is the traditional banking system. The industry has ceded market share to private credit due to burdensome regulations stemming from the Great Recession, yet it still lends to various players in private credit. Investors wonder what will happen if private credit lenders encounter problems. Will that spill over into the banking sector?
After first-quarter earnings, the largest banks in the country provided some disclosures about private credit. Here’s how much exposure JPMorgan Chase (JPM +1.29%), Bank of America (BAC +1.23%), Wells Fargo (WFC +0.88%), and Citigroup (C +0.29%) have.
Image source: JPMorgan Chase.
Understanding what private credit is and where the problems are
Private credit is a broad term, but at its core, it’s non-bank lending from a variety of players, including asset managers, insurers, private equity firms, and business development corporations (BDCs).
It’s grown popular as banks have slowed lending to a wide array of businesses since the Great Recession and as these lenders have offered more customized products. The returns private credit has generated have also been very attractive to investors.
But the key here is to understand that the term private credit is incredibly broad. For instance, there’s warehouse lending, in which a company loans capital to another company that is originating various types of consumer loans, such as mortgages, student loans, and auto loans.
Consumer loans are pooled and typically serve as collateral for a warehouse loan. Other forms of private credit include financial companies borrowing from one another and private equity firms borrowing short term while waiting for funding from their limited partners.
But the area of private credit that is under the most scrutiny right now is direct lending. This is where an asset manager, private equity firm, or BDC makes a direct loan to a company. Many, although certainly not all, of these loans will have a senior position in the capital structure and floating interest rates. Banks may provide a warehouse credit line to firms making these direct loans, known as corporate debt financing or private credit warehouse financing.
Private credit has come under scrutiny because it operates outside the banking system, making it difficult for regulators to get a complete picture of what is happening. Private credit has faced even more intense scrutiny this year because many of these direct loans were made to software companies.
Software stocks have been crushed during the past year amid concerns about artificial intelligence. This has investors worried that these loans will go bad, potentially damaging private credit and, in theory, anyone else lending to or investing in private credit firms. That’s why many private credit funds have received high redemption requests from investors.
Exposure at the big banks
Given all the focus on private credit, the large banks each provided some insight into their exposure to private credit, including overall exposure to non-bank financial loans (NBFI), lending in the corporate debt financing (CDF) sector, and some disclosure on loans to BDCs, which are under heightened scrutiny right now.
Today’s Change
(1.29%) $3.98
Current Price
$313.23
Key Data Points
Market Cap
$845B
Day’s Range
$306.57 – $314.10
52wk Range
$248.83 – $337.25
Volume
3.1K
Avg Vol
10M
Dividend Yield
1.88%
According to a JPMorgan Chase research note from February, a fifth of BDC portfolios are exposed to software, which is more exposure than in the syndicated loan and junk bond markets.
Here’s a breakdown of where each bank stands on the metrics listed above (numbers are in millions):
| Bank | NBFI Loans | NBFI % Total Loans | CDF Loans | CDF % Total Loans | BDC Loans | BDC % Total Loans |
|---|---|---|---|---|---|---|
| JPMorgan Chase | 160,000 | 10.6% | 50,000 | 3.3% | ? | ? |
| Bank of America | 180,000 | 14.9% | 55,000 | 4.6% | <2,000 | 0.2% |
| Wells Fargo | 193,000 | 19% | 36,200 | 3.6% | 8,326 | 0.8% |
| Citigroup | 118,000 | 16.8% | 22,000 | 3.1% | <1,180 | 0.2% |
Source: Bank earnings reports, earnings presentations, and earnings transcripts.
As you can see from the data above, although banks have meaningful lending exposure to non-banks that extend credit, their exposure to corporate private credit extending direct loans to private companies is less 5% across all banks. The amount to BDCs is less than 1%. Although JPMorgan didn’t disclose exact BDC exposure, it’s hard to imagine it being significantly higher than peers’, based on its other disclosures.
Most bank management teams expressed confidence in their underwriting. As I mentioned above, many direct private credit loans hold a senior position in the company’s capital stack. That’s why some investors have previously described private credit as having equity-like returns with bond-like protection.
The loans are high-yielding, often more than 10%, while their senior position means lenders are higher in line to be repaid if a company defaults on its debt. Banks making loans in this niche are also likely to have their own protections in place, adding another layer of safety.
Today’s Change
(1.23%) $0.65
Current Price
$53.53
Key Data Points
Market Cap
$384B
Day’s Range
$52.15 – $53.66
52wk Range
$40.55 – $57.55
Volume
4
Avg Vol
40M
Dividend Yield
2.06%
“Bank of America’s exposure has structural insulation from those first loss positions,” the bank’s chief financial officer, Alastair Borthwick, said on the company’s first-quarter earnings call, when discussing private credit. “For losses to reach us, we believe operating company equity and a substantial portion of fund investor capital would need to be impaired before we would experience losses.”
Private credit concerns are real, but likely not systemic
Banks do have some exposure to the sector, and therefore could face issues down the line. Earlier this year, JPMorgan Chase reportedly marked down some of its private credit loans. Of its $36 billion corporate debt portfolio, Wells Fargo disclosed that 17% of its collateral has software exposure.
However, the large banks seem more conservative, lending to higher-quality investment-grade entities. Citigroup said its $22 billion in corporate private credit loans have incurred no losses over the life of the portfolio. Wells Fargo also said its NBFI portfolio has had virtually no losses for a long time.
Private credit has already seen some cracks, and conditions could continue to deteriorate. But even if they do, as JPMorgan Chase Chief Executive Officer Jamie Dimon said in his letter to shareholders earlier this year, “private credit probably does not present a systemic risk.”
Ultimately, I do think investors should keep their guard up when it comes to private credit. But they don’t need to have flashbacks to the financial crisis. Furthermore, the large banks appear to have prudently underwritten their exposure and should be able to deal with any problems that arise.
Money talks, broadly speaking – Bank Underground
Aaron Clements-Partridge and Ryland Thomas
Broad money aggregates failed policymakers when used as an intermediate target in the 1980s, but they appeared to predict the post-pandemic inflation. Where does that leave their role in setting monetary policy today? That was the topic of a recent workshop hosted by the Bank on ‘Analysing the Information Content of Money’ which brought together academic experts and central bank staff to review the evidence. In this blog we offer our key takeaways from the workshop. We argue that there is value in understanding developments in the broad money data. While it shouldn’t assume special status, money provides an alternative lens through which to assess and communicate medium-term risks to the inflation outlook.
There are strong theoretical reasons to believe that changes in money balances can contain information about the outlook for nominal spending or price level. Intuitively, broad money is a measure of potential spending power, capturing the stock of liquid assets – mostly deposits – held by households and companies. This is described more formally in economic theory – most simply by the Quantity Theory of Money, in which nominal spending is required to be equal to the stock of money multiplied by the speed at which it circulates around the economy (ie its velocity).
A key challenge has always been whether velocity is stable and predictable enough for these relationships to be useful. A stylised fact over the long sweep of history, is that the correlation between money and nominal spending is clearer at longer horizons but noisier at the business cycle frequency, with all frequencies exhibiting phase shifts in the apparent lag-lead relationship Chart 1 shows the relationship at different frequencies in the UK going back to the late C18th (Thomas).
Chart 1: UK broad money and nominal GDP (NGDP) correlations at different frequencies
Notes: This uses Multiresolution Analysis (MRA) based on the wavelets filter to isolate movements in money and nominal spending at different frequencies (Percival and Walden (2000)). rxy is the correlation coefficient between money and nominal spending at each of the frequencies shown.
Presenters at the workshop offered a range of evidence that the money data can contain useful information for assessing the inflation outlook. For the economies covered, including money in empirical models helped to identify the underlying shocks driving inflationary pressure and clarified the transmission of conventional and unconventional monetary policies (eg Mandler, Bhadury and Binner).
Additionally, there was competing evidence on the exact role for money relative to other factors in explaining short-run movements in inflation and output. For example, the post-pandemic rebound in money velocity – reflected in stronger nominal spending growth following a large build up of money holdings – suggests that the unwinding of monetary imbalances was a potentially important part of the narrative underpinning the emergence of inflationary pressures from late 2021 onwards. The relative importance given to this versus other factors varied across presentations (eg Reynard, Duca and Mandler), however, owing in part to varying experience across countries. For the UK, we believe it was right to assess the risks to the outlook for nominal spending from the build-up of primarily household deposits across 2020–21. But supply-chain disruptions were the main reason that inflation picked up in late 2021 and higher energy prices likely triggered a faster rebound of velocity than otherwise would have been the case from 2022. Above all, the UK experience suggests understanding the interaction between the state of liquidity and the impact of supply and commodity price shocks is important for monetary policy (Thomas).
For us, the workshop also highlighted four important considerations when working with the money data.
First, it reinforced our view that that indicators that try to identify any persistent disequilibria in money holdings are likely to be more useful than focusing on volatile high-frequency movements in money. The workshop presentations by Reynard and Duca emphasised the potential significance of money ‘overhangs’ which can help explain inflation in Switzerland and the US. The underlying logic is that when increases in the money supply cannot be accounted for by underlying changes in money demand (M*), that signals nominal spending is likely to be stronger going forward to reconcile the two in the medium term. These approaches rely crucially on sufficiently good estimates of underlying money demand. This can be highly challenging given it’s unobserved, but we agree with Huw Pill that economists face similar challenges when estimating other unobserved ‘star’ variables such as the natural rate of interest (R*) and potential supply (Y*), to construct other indicators of inflationary pressure such as the interest rate- or output-gap. So money is no different in this regard. Both Reynard and Duca demonstrated that improving estimates of money demand is possible if underlying drivers can be identified and structural changes in the financial system relevant for the economy concerned are understood.
Second, it seems clear that the relationship between money and inflation is highly state-contingent and that understanding the nature of the underlying shocks and wider economic conditions is key to interpreting developments in the money data. As an example of this, Boucinha (ECB) noted that precautionary behaviour at the height of the Covid-19 pandemic pushed up on money demand, so higher money holdings were less of a risk to inflation at that point in time.
Third, we recognise strong arguments for analysing both simple-sum aggregates and Divisia measures of money and don’t see a need to choose between them. The key advantage of simple-sum money aggregates is that they facilitate analysis of money within a wider framework of banks’ and private sector balance sheets. For example, the proximate drivers of money creation can be identified via its counterparts on banks’ balance sheets, such as lending to the private sector and QE. The US evidence suggests that Divisia money has more information content in relation to nominal spending decisions, however, given it puts greater weight on the types of deposits most likely to be used for transactional rather than savings purposes. This is likely to be especially important if different types of monetary asset are poor substitutes for each other (Binner for the UK).
Fourth, analysing money at a sectoral level seems especially helpful for identifying the mechanisms of adjustment following disequilibria. In the UK, the relationships between money and spending have often appeared clearer at a sectoral level (Cloyne et al (2015)). Changes in sectoral money holdings can also be related to the flow of funds arising from changes in the portfolio of financial assets by different sectors, such as households substituting between deposits and equities. So, the extent to which money over- or under-hangs are concentrated in specific sectors is likely to affect the channels through which they unwind. The presentation by Castaneda demonstrated the relationship between financial sector money holdings and share prices in the UK and US. The link between household money and house prices also emerged as a result worth exploring further, given the supporting evidence in Congdon (2026). Given all of this, a key question was how central banks should assess and communicate risks from money growth looking ahead. In his keynote address, Michael Bordo argued forcefully that, despite the dominance of the New Keynesian approach to setting monetary policy in many central banks, monetary aggregates still played a role in assessing and communicating inflation risks. That role he argued should take the form of a crosscheck using an explicit nominal trends framework for risk assessment to go alongside a traditional New Keynesian analysis of the relevant channels of transmission (see an interpretation of this in Figure A from the presentation by Thomas). This was reinforced in the panel session by Huw Pill, who suggested that central banks’ focus on money had waned too far since the money targeting failures in the 1980s. That had undermined the value of presenting money as a risk‑assessment tool which, retrospectively, would have been useful in the pandemic. Charles Goodhart agreed and argued that when large money gaps emerge, central banks should understand and explain the source of the overhang and communicate the potential risks, even if the assessment ends up being that they pose little risk to inflation. Larry Goodman concurred and pointed to a number of episodes in the last 25 years when strong US Divisia money growth might have provided useful early warnings that, had there been more focus on these, might have prompted helpful discussions with respect to monetary policy and financial stability.
Figure A: A conventional New Keynesian (NK) approach and an alternative nominal trends framework for assessing the risks from money
Conclusion
We think the current evidence supports using money data as a crosscheck on other indicators as a prompt to ensure any key risks apparent in this data have been understood and communicated by monetary policy makers. We dub this the ‘canary in the coalmine’ approach. Although there are communication challenges around complex monetary concepts, we think that clear and regularly repeated external narratives are part of the answer and these should be done in an explicit nominal trends framework to avoid the message being lost in translation. To some extent this has already been a feature of MPC communications in past Monetary Policy Reports, where the gap between money and simple estimates of trend have been discussed (Chart 2). In future we intend to improve our toolkit to project money gaps over the forecast horizon which will facilitate scenario-style analysis. That way, when money talks (or the canary tweets) the MPC can communicate the risks in the right language.
Chart 2: Broad money (M4ex) to nominal GDP ratio (inverse velocity) relative to pre-pandemic trend
Aaron Clements-Partridge works in the Bank’s Monetary and Financial Conditions Division and Ryland Thomas works in the Bank’s Monetary Policy Strategy Division.
If you want to get in touch, please email us at bankunderground@bankofengland.co.uk or leave a comment below.
Comments will only appear once approved by a moderator, and are only published where a full name is supplied. Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.
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International Crackdown On Crypto “Pig Butchering” Scams Leads To 276 Arrests
The US Justice Department has recent noted that law enforcement agencies from the United States, the United Arab Emirates, Thailand, and China have dismantled multiple overseas operations tied to cryptocurrency investment scams, resulting in the arrests of at least 276 people. The coordinated action, which unfolded last week, focused on fraud centers that had defrauded American victims of millions of dollars through sophisticated deception / fraudulent tactics.
The operation was primarily driven by Dubai Police under the UAE Ministry of Interior, with strong support from the FBI and China’s Ministry of Public Security.
Dubai authorities took 275 suspects into custody, including three individuals now facing federal charges in San Diego. Thai police separately arrested one more key figure.
The raids targeted at least nine scam compounds used to run large-scale cryptocurrency fraud schemes.
Among those charged in the Southern District of California are Thet Min Nyi, a 27-year-old Burmese national also known as Ko Thet or Pixy; Wiliang Awang, a 23-year-old Indonesian; Andreas Chandra, 29, from Indonesia; and Lisa Mariam, 29, also Indonesian.
Two additional co-conspirators remain at large.
The defendants are accused of conspiracy to commit wire fraud and money laundering.
Court records show they allegedly oversaw and recruited staff for three separate scam outfits known as Ko Thet Company, Sanduo Group, and Giant Company.
The frauds relied on a method commonly called “pig butchering.” Perpetrators first built fake personal connections with victims—often posing as friends or romantic interests—to gain their trust.
Once the relationship was established, the scammers pushed fake cryptocurrency investment opportunities.
They helped victims open accounts on counterfeit platforms, encouraged larger deposits by boasting about high returns, and even urged them to borrow money from family or take out loans.
In reality, the funds were immediately diverted to the operators’ control and laundered through other cryptocurrency wallets.
FBI agents in San Diego launched the investigation in 2025 after spotting patterns linked to these overseas compounds.
Working through the Internet Crime Complaint Center, they interviewed victims and traced financial and digital currency transactions, confirming widespread losses across the United States.
Senior officials hailed the operation as a clear message that criminals can no longer hide behind borders.
Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division stressed that scam centers are now viewed as unacceptable anywhere and will be pursued globally.
US Attorney Adam Gordon for the Southern District of California noted that the world of crime has become global, and so has the reach of justice.
FBI leaders, including Assistant Director Heith Janke and Special Agent in Charge Mark Remily, underlined the importance of international partnerships in protecting Americans from further harm.
Dubai Police and Thailand’s Royal Thai Police played pivotal roles in the arrests and ongoing disruption efforts. Meta Platforms provided valuable assistance by sharing critical data.
The cases are being handled by federal prosecutors in San Diego and the Justice Department’s Computer Crime section.
This takedown builds on earlier FBI initiatives, such as Operation Level Up, which has already warned nearly 9,000 potential victims and prevented roughly $562 million in losses.
Authorities continue to investigate similar networks, including those operating in Southeast Asia. Anyone who believes they have fallen victim to these schemes is encouraged to file a report with the FBI’s Internet Crime Complaint Center at ic3.gov.
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Deals Are Getting Better (Will It Last?)
Dave:
The first data for the spring housing market and how the war in Iran is impacting the market is here. And today we’re diving into it. We’re going to look at the actual results so far and see how prices, inventory, affordability and more are shaping up. And we’ll also talk about what it tells us about the months to come, what you can expect and how you should behave. Plus, we also have a big update on the Federal Reserve drama and whether or not a new Fed share is going to be kinder to the housing market than Jerome Powell. That and much more on today’s episode of On the Market.
Hey everyone. It’s Dave. Welcome to On the Market. I think I say this every week, but man, a lot is going on. Is that just me? Maybe it’s just me. But really it does kind of seem like the already accelerated news cycle is playing at like 2X speed right now. It could be hard to keep up. And today I was going to take a break from more of the news and economics headlines and just focus on housing market data because we have some housing market data from this spring that I want to go into. And we are going to do that, but there have been some big developments even since last week’s deep dive into the Fed drama. So we’re going to provide a quick update on that first, since it seems to be on everyone’s mind right now. They want to know, will Kevin Warsch, the perspective probably new head of the Federal Reserve, help the housing market?
We’ll cover that quickly at the top, but then we are going to get into the weekly and the monthly data we have so far to try and suss out. If the spring market is actually going to take shape, I think you’re actually going to be surprised. I was surprised. Lots of good stuff to go over there, so let’s get started. First up, Fed update. If you didn’t listen last week, I did a deep dive into this ongoing drama that had been emerging as the Federal Reserve around Kevin Warsch’s nomination. You can go back and listen to the history of that. It’s one week ago the episode came out, but I’ll just give you a brief summary. So basically a Republican Senator, Tom Tillis, was threatening to hold up Kevin Warsch’s nomination unless the Department of Justice dropped their probe into Jerome Powell. He believed this is important to maintain the perception and truth of Fed independence.
And as of just a week ago, it was really unclear how this was going to play out if Warsch was actually going to be confirmed if Jerome Powell was going to stay on. Well, now, just a couple of days later, we do actually have some information. We learned on Friday, just a day after that episode came out, that the Department of Justice is intending to drop the probe into Jerome Powell. Now, this paves the way for Kevin Warsch to be confirmed as the next chairman of the Federal Reserve. That hasn’t happened yet, but it is pretty likely it’s almost certainly going to happen. And I will just say, I’m surprised. When I was researching the episode we put out last week, I thought this was going to drag out, but it looks like we will have a new Fed chair in the next couple of weeks.
Now, personally, think what you will about Kevin Warsch. People have different opinions about that, but I count this as a win for Fed independence. I’ve said on the show many times, I’m a believer in Fed independence, even if you don’t like the Federal to Reserve and the decisions that they’ve been making. Fed independence is important to our economy. It is important to borrowing costs for everyone from you, to me, to the US government. So I think Fed independence needs to be maintained. I was concerned about how this could play out. So I’m glad to see the Department of Justice dropping this probe. It did seem a little frivolous, and I think the fact that they’re dropping it supports the perception of Fed independence. Now, everyone wants to know what Kevin Warsch is going to do. I’ve been making numerous news appearances over the last couple of days talking about this.
It seems like it’s on everyone’s mind. The exact wording people keep saying is Warsch going to support the housing market? Is he going to be better for the housing market than Jerome Powell? Well, a lot of people think that. That is the perception because a lot of people expect Kevin Warsch to pursue President Trump’s agenda. And President Trump has been very clear about what he wants. He wants a lower federal funds rate. He said he wants it as low as 1%. I don’t really think that is realistic, but people are wondering, is Warsh actually going to do what President Trump wants and lower rates, even though inflation has been going higher over the last couple of months? Well, I’ll give you my take. And it’s that, honestly, it doesn’t even matter that much because Kevin Warsch is just one of 12 voting members of the FOMC, the group of people that vote on interest rate policy.
So he cannot unilaterally lower interest rates. Remember that. He cannot do that. And even if he could, it wouldn’t correspond necessarily to lower mortgage rates. So what then should you expect? We’re getting a new Fed share. This has to mean something, right? What does it mean? Well, I think Warsch is going to try and move the Fed in that direction. He does have a lot of sway. He is responsible for a lot of the culture and a lot of the priorities at the Federal Reserve, even though he can’t unilaterally lower rates. And I think he’s going to try and get the federal funds rate lower. Now, is it going to 1%? No. The idea of dropping rates that low in an economic emergency makes sense. Dropping it to that right now, I don’t really think makes a lot of sense. That could reignite inflation, and it also takes a tool out of the Fed’s playbook in case there is a genuine economic emergency.
But I do think he’s going to push hard for two, three, maybe four or more rate cuts over the next couple of years and get it closer to a neutral rate. But I do think that is going to be hard. I do not think there are a lot of other people at the Federal Reserve who believe that the federal funds rate should go lower right now. The labor market is holding up. Inflation is going up. Those are the types of condition where you at least hold rates. In a different environment, you might say it’s actually the kind of time that you raise rates. They’re not going to do that right now, but that could be argued. If you actually go through the minutes of the last FOMC meeting, the vote was 11 to one to keep rates steady. There’s only one current voting member who believes that rates should go lower right now.
So if Powell is replaced with Warsh and things don’t change much, that’s still a 10 to two vote. You still have a significant amount of people that you need to change their mind, and that’s happening at a time that there is inflationary pressure. And as long as there is inflationary pressure, while the labor market holds up, which is exactly what’s going on, it is going to be hard for Wash to lower rates. Now, philosophically speaking, he may be more supportive of helping the housing market than Powell. I think that’s actually probably true. Jrum Powell has repeatedly almost gone out of his way to not support the housing market. Not that he’s intentionally trying to hurt it, but he’s never said that Fed and monetary policy should be used to support the housing market. Now, President Trump has said that. Scott Bessett has said that. And I do believe just by extension, because Warsch has been appointed, nominated, I should say, by President Trump, and President Trump probably was screening candidates for a philosophical alignment, I have to believe that Warsch also feels that helping housing at least should be factored into monetary policy decision making.
And so I do think in that respect, Warsch might help the housing market just a little bit. But again, there’s only so many tools that he can use. He can’t lower the federal funds rate by himself. Even if he does, it won’t lower mortgage rates. The one thing the Fed can do that would lower mortgage rates is quantitative easing, but actually Warsch has been extremely skeptical of quantitative easing in the past. He actually resigned from the Fed back in 2011 because he disagreed with quantitative easing. Now, he said he wants to shrink the balance sheets of the Fed. That’s quantitative tightening. That’s the opposite. And so unless he’s had a complete about face or he’s faces extreme political pressure from President Trump, I don’t think that’s going to happen. And so again, I’ve tried to caution people, and I know I’m talking about this two weeks in a row, but so many people are saying that this is going to be big relief for the housing market.
I do not think so. Could the housing market get better? Sure. But I don’t think it’s because Kevin Warsch is becoming the Fed chair. If inflation was down, maybe that would be different, but it’s not. We’ll see what happens in the next couple months. If it gets under control, if it starts to go down, maybe he can bring rates down, but right now, I wouldn’t expect anything in the New York Time. So that’s a big update. If you follow the housing market, if you’re an investor, what the Federal Reserve does? Super important, right? And although Warsch, again, cannot change things on his own, it’s probably going to take some time. It is, I think, a bit of a philosophical shift at the Federal Reserve, and that could have implications for housing market in the longer term, six months, a year, two, three years down the line.
It could, but we’re just going to have to wait and see what he does, if he could build consensus at the Federal Reserve. And if we get a clearer line of sight on lower inflation, it’s going to come down to all of that. And obviously we’re just going to have to wait and be patient and see how that plays out. So that’s our update on the Federal Reserve. Next, I want to turn our attention to the spring housing market. Let’s talk about it because we’re getting the first data now for what’s actually happening in the market despite the war in Iran, despite rates bouncing up a little bit. Is there going to be a spring housing market? We’re going to get into that right after this quick break. Stick with us.
Welcome back to On The Market. I’m Dave Meyer. Let’s get into the spring housing market data that we have so far. Now, I’m recording this right at the end of April, so we don’t have April monthly data. March data shows that appreciation was basically flat. If you look according to Redfin, it was 0.1%, so prices are almost exactly flat on a nominal non-inflation adjusted basis. When you look at real prices, so inflation adjusted prices, prices have been falling. This is the same situation that we’ve been in for years, and I don’t expect that to change. Inflation right now at 3.3%, housing is flat. That means that home price growth is negative. That’s one of the many reasons I’ve been saying that we were in a correction. That’s where we sat in March. But let’s talk about weekly data because things are moving so quickly. If you listen to the show, you probably know I don’t normally get into weekly data because it can be very volatile.
But during times of a lot of uncertainty, I do look at it because it can be a really interesting indicator to help us formulate our strategies. Is the spring housing market going to be here? Is it going to be a good time to buy? Is it going to be a good time to sell? Are things going to get worse, right? And so it does make sense to look at weekly data. And fortunately, there’s some actually good news here. Color me surprised. I was not expecting to see this. I have to admit that when I was looking at this weekly data, I thought we were going to see more slowness, more reasons for pessimism about a spring market materializing, but it actually has been a little bit better. I dug into Altos data. This comes from HousingWire. You can go check it out. I like this data.
The founder of Altos data, Mike Simonson, has been on the show many, many times. His colleague, Logan Modashami, who’s been on the show many, many times, popular guest, uses the same data here. So it’s high quality stuff though, even though weekly housing market data is fickle. So keep that in mind. But what we saw, what I was surprised is, is we saw a big increase in pending sales last week. Pending sales, if you don’t know what that means, that’s just the number of properties that went under contract. They’re waiting to close. And it’s just a good indicator of how much activity there is, right? How many people are signing contract this week? And it went up 10% week over week. Might not sound like a lot. That is unusual. It’s like one or 2%. That’s like a big move. 10% week over week is a lot and is now up 20% year over year.
That’s super encouraging, right? Now I want to caution again, this could be a blip because it is just one week. I think there’s also a reasonable question if this is just a rebound from a couple really slow weeks, right? Like with the war, there was also Easter, things slow down on holidays, right? Maybe we’re seeing some of that artificially low data from the last couple of weeks work itself out and it will normalize, but it’s still encouraging in its own right, particularly because the data is sort of validated with a totally different data set. Just so you know, sometimes when you have this volatile one week data, you should look and say, okay, is there another data set, another indicator that we can look at to see if this is real? And so what I looked at is mortgage purchase applications. That is more of a forward looking data point.
It tells us sort of how pending sales are going to be 30, 60, 90 days down the line, right? It’s just people applying for mortgages, not actually closing or even putting them under contract. And what we saw in that mortgage purchase application index is a 10% week over week gate, almost exactly the same as impending sales, and it’s a 12% year over year increase. So take that to all the people saying there is no buyers out there. There are buyers in the housing market. It has been remarkably resilient. Now, I’m not saying this is going to sustain. I think we have a lot of big questions, which I’m going to get into in a minute, just like the questions and some of the indicators. But people, at least this last week, we’re getting back into the housing market. Is it the move from 6.5% mortgage rates down to 6.3?
I don’t know. That doesn’t seem like it’s enough to me, but maybe people are locking in now because they expect rates to go back up. I think that is possible too. But either way, whatever it is, maybe the weather got nice, at least where I live. Everyone’s out and about right now. Maybe they just felt motivated to go buy a house. We saw more activity, and I’ll take it for now. Not saying to go celebrate, take it with a grain of salt. We’re not going to see some huge boom. But as of a week or two ago, I was starting to get concerned, I talk about this two or three weeks ago, that we were going to see an even slower housing market this year than last year. Not crazy, just a little bit slower. I was expecting and hoping for modest gains, and I was worried that we’re actually going to see modest declines.
We don’t know yet, but I think this is hopeful instead of what I was expecting to see this week. Now, on top of just the demand side, we also saw increased activity on the seller side of the market. Single family new listings, people who decided to go up and sold their house up 7% week over week. It’s up 7% year over year. That’s a lot. Again, could be a blip. Is it? If I had to guess, probably yes. I’d be pretty surprised if we really started to see sustained activity, but I’ve been wrong before, I’ve been surprised before, and that at least would be a pleasant surprise, right? At least we would see more activity. I would love to be wrong in that way. I’d love to see more inventory. I know some people don’t because it can put downward pressure on prices, but I think that’s the best way back to an actually healthy, functional housing market for the first time in like seven years.
And so I hope that I’m wrong and that we do see more inventory and more pending sales. Now, of course, what I’ve shared so far is just national, but I will just give you a couple of regional updates as well. There are still markets with huge growth in year over year price increases. This is according to Redfin this week, year over year. Detroit, San Francisco, Cleveland, Providence, Pittsburgh, all double digit price growth, biggest declines. You won’t be surprised to hear as Austin, 3.6%, Seattle, Riverside, California, Minneapolis, and Las Vegas. So that’s what’s going on in prices. I actually am going to talk a lot more about regional trends, buyer’s markets, sellers markets where people have more leverage in just a minute. But before we do, I just kind of want to say a little bit more about what happens next with the housing market, because again, I’m sharing this positive news because we all need positive news, right?
It’s been a rough four years in the housing market. And I am not saying we’re out of the woods, but I was happy to see a little bit of life into the housing market this week, but what happens next? In the near term, I think it really comes down to what happens in the Middle East. And I know that’s frustrating because no one knows. It’s really anyone’s guess. But if you read any of the studies or forecasts on inflation and the impact on the war, the general consensus, strong general consensus, is that inflation is likely to remain in the three to 4% range minimum in the near term and that things can take a while to cool. And that is even if the strate of hormones open today, which it obviously has not. And if the war drags on, inflation spreads back through the economy, which it will, it will.
If the strategormoon remains close, I believe the market’s going to slow down. I’m glad to see this blip, but I think if this drags on for several more weeks, or God, I hope not months, but if that continues to happen, the market is going to slow. Affordability is just lower. Fewer people can go buy homes. Plus, it really negatively impacts consumer confidence. Consumer confidence is literally the lowest it has been in the 70 years it has been tracked. So that on top of reversing affordability gains, meaning affordability has gotten worse over the last couple of months, I think it’s got to slow down. I feel it’s very hard to imagine that if affordability stays low, people have low consumer sentiment that we can sustain any momentum in the housing market. Now, maybe we could still salvage modest home sales growth, but the idea that it’s going to pick up like we saw this week and stay that high, I don’t really think that’s going to happen amid inflation fears, AI fears, low consumer sentiment, unless the war ends and inflation goes down, right?
Hopefully there will be a quick resolution. We see mortgage rates start to come back. We get affordability back on track. I think this week’s data shows that there is still demand for housing. People want to buy homes. And if the war ends and mortgage rates start to come down a little bit, I think we can get a little bit of a momentum back. But it really, to me, comes down to how long this war stretches out because I know this is a little wonky, but it’s not like the day the strait of hormones opens that we’re going to see inflation go down, that gas prices are going to go down. They’ll probably go down, but not to where they were pre-war. And the longer things stay closed, the longer it will take for things to get back to normal. We kind of saw this during COVID, right?
Things were so messed up for so long that it’s taken forever for inflation to come back down. Now we’re not in that situation yet, don’t get me wrong, but I’m just saying the longer the war drags on, we’re like a month away from certain countries running out of oil, dipping into strategic reserves. That will push up inflation. That could cause a global recession, right? All these things could start happening if the war stretches out. So let’s all hope for a quick resolution to this. But the housing market’s not tanking, so don’t get worried about that, right? We’re not seeing prices crashing. We’ve actually seen solid pending sales. So even though it’s maybe not getting better and it might continue to be slow, like I’ve been talking about, the bottom is not falling out. So that is good news. That’s why I was encouraged to see this stuff this week.
And there is more data that’s actually come out about the current housing market, the spring housing market that I think is super encouraging for investors. And we’re going to get into that, but we got to take one more quick break. We’ll be right back.
Welcome back to On The Market. I’m Dave Meyer. Today we’re going through spring housing market data. And while the macro situation is complicated, the conditions on the ground for investors aren’t that bad. I know that sounds crazy and I know that I have been somewhat pessimistic about the chances of a housing market rebound, but a lot of my pessimism, if you listen over the last couple of weeks, is about the housing market not getting back to healthy levels. That’s what I personally really want to see, but that does not mean that investing conditions on the ground for long-term investors are bad. And I actually think things are shaping up in a way that are better and better for people who are looking to acquire more properties. Now, I already talked about more active inventory. That’s good for investors, but the big news and the data that we are starting to see from the spring housing market is that negotiating power and leverage is improving.
This is something we talked about on the show, but this is backed up with real data. There’s some new data that came out from Redfin the other day that showed that there are over 40% more home sellers than buyers. Another way to put that is for every 10 buyers out there, there are 14 sellers. That’s the highest since Redfin has been keeping this data, which goes back to 2012. 2012, not a super dynamic market. I don’t know if you were investing back then, I was, and it was pretty slow. Definitely a buyer’s market. It did spike up to 30% in 2014, 2015, but 43% where we’re at today, that’s the highest it’s been in 13 years on a national level. And this is true in a lot of regions. So let’s talk about that too, because the way you actually use this data, national data for this, not super helpful.
For regional data though, it can help you formulate your strategy for going out and acquiring, how to bid on properties, how to negotiate on properties. And right now, out of the 49 largest metro areas in the United States, 38 of them are in a buyer’s market. That’s up from 29. 29 a year ago in a buyer’s market, now 38. And actually in five of those markets, there are almost twice as many sellers as buyers. So for every 10 buyers, again, 20 sellers out there. Now on the flip side, there are only five markets that are seller’s markets. These are markets largely in the Northeast, Newark, New Jersey, Nassau County, New York, Montgomery County, Pennsylvania, New Brunswick, New Jersey. The one in the Midwest is Milwaukee. The rest are neutral. There’s six neutral, five sellers markets, 38 buyers markets. This as an investor should be perking your ears up a little bit, right?
This means it’s a better time to go out and acquire right now. The strongest buyer’s market in the country right now is Miami with sellers outnumbering buyers by 148%. In Nashville, it’s 120%. In Austin, it’s 112%. In San Antonio, it’s 109%. Las Vegas, it’s 100%, meaning there are more than twice as many sellers as buyers in these markets. Not really a surprise which markets make this list. On top of those, it’s Dallas, Tampa, Orlando, Phoenix, Atlanta, Charlotte, all the hot markets from a couple years ago in the biggest buyer’s market. I already told you the five that are in a seller’s market, the six balanced markets, Baltimore, Cleveland, Providence, Rhode Island, Boston, Chicago, Minneapolis. Everything else is in a buyer’s market. And if you take this all together, think of this all together, you see stronger inventory, right? More new listings, more active inventory. You have less competition because even though there is some demand, demand from a couple years ago, it’s way down from demand a couple of years ago, right?
And now you have better negotiating leverage when you go out and buy some of that increased inventory. It can make for good investing conditions. And again, I know we say it on the show all the time, but it’s not like we’re making this up. The data actually supports this. There are more sellers than buyers. That means they have to compete for you. In Miami, there are 25 sellers for every 10 buyers. Make them compete for you. How do you make them compete? 25 people need to attract the 10 buyers. How do those 25 people get one of those 10 buyers to buy their property? They negotiate. They negotiate on price. They negotiate on terms. They’ll negotiate on whatever’s important to you if they’re desperate to sell. Now, not everyone’s going to be desperate, but people are going to be motivated to at least talk to you, at least have these conversations.
That’s the power of a buyer’s market. So go out and use it. I know the headlines about flat appreciation, about low pending home sales, about reversals and affordability gains is not the best news. But if you go out and actually look at the deals that are out there and you actually negotiate, don’t just take the list price for face value. I genuinely think you’ll see that deals are actually getting better. Now, are we going to get back to that healthy housing market soon? No, I don’t think so. We’re still in the great stall. But the playbook that we have been talking about for what works right now still works even during all this stuff. The data supports that. It suggests that you have better opportunities to go out and get good deals than you have in a long time, maybe 10 years, maybe more. And I know it’s intimidating to do it with all this uncertainty, but if you follow the principles we talk about on the show all the time, conservative underwriting, buying under market comps, if you can do that, you can find good deals.
So take what the market’s giving you. The market’s giving you negotiating leverage, go use it. That’s our show for today. I’m Dave Meyer for BiggerPockets. Thank you for watching this episode of On The Market. I’ll see you next time.
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