The Economy and the Single-Family Asset Class
by REI INK
The U.S. national debt stands at more than $39 trillion. According to Treasury data, updated retrospectively for May 18, the debt landed at $39,008,999,901,378.68. According to the Congressional Budget Office (CBO), the national debt is nearly as large as the entire U.S. economy and is projected to exceed its record high relative to the size of the economy in just four years.
According to Fortune, more than $1 trillion has been added since October 23, 2025, about $5 billion per day. The debt surpassed $39 trillion in mid-March and actually fell below it for several weeks before cresting to this point again.
Concern about the level of national debt is growing, particularly in relation to GDP, known as the debt-to-GDP ratio. This represents a nation’s borrowing versus the growth of its economy, and therefore the risk levels attached to servicing and repaying the debt. The U.S. debt-to-GDP ratio sits at approximately 123%, meaning its borrowing is bigger than the size of its entire economy.
There have been calls to better align borrowing with this metric: namely, that the yearly government deficit should be targeted at 3% of GDP rather than its current level of more than 6%. This has garnered bipartisan support but would require a mammoth effort. The mere 3% cut would require approximately $10 trillion in deficit reduction over the next decade to reach the target by 2036.
Bridgewater Associates founder Ray Dalio has long warned of an economic “heart attack,” whereby service payments on debt would one day choke out public-sector investments. Already, interest payments are equivalent to government spending on education and the military combined.
Likewise, JPMorgan Chase CEO Jamie Dimon recently warned that the bond market will ultimately prove to be the factor that provokes some action from DC when investors begin to demand higher premiums to continue buying debt.
However, in a recent interview with Fortune’s Editor in Chief, Alyson Shontell, Trump also shared an alternate view: The president suggested the nation’s debt is really not so bad if you see it through the lens of a real estate mogul, i.e., looking at the debt versus the total value of America and its natural assets, such as the Grand Canyon or surrounding oceans. “If you put down the value of these things, it’s like hundreds of trillions of dollars,” Trump says, and by that measure, “if you kept [the national debt] at $40 trillion, you’re way under-levered.”
U.S. Treasury Notes
Yields on 30-year U.S. Treasury notes rose just over 5.19% as of May 19, 2026, the highest level for the long-term bonds since June 2007, while 10-year yields, a gauge for mortgage rates, auto loans and credit card debt, climbed to 4.68%, their highest level since January 2025.
A survey of global hedge fund managers published by Bank of America found that 62% of respondents believe 30-year yields will hit 6%, potentially matching their highest level since 2007, as 40% of managers anticipated a further surge in inflation.
Ajay Rajahdyaksha, Barclays’ global chairman of research, wrote the U.S. debt was rising faster than its economic growth, inflation is expected to be higher or more volatile, and there’s “no political will for fiscal reform,” adding investors are not motivated to purchase long-term bonds.
The Federal Reserve
Just days after the Senate narrowly confirmed Kevin Warsh as the next chair of the Federal Reserve, the inflation picture took a sharp turn for the worse. Consumer prices rose 3.8% in April, the highest annual rate since May 2023. Wholesale prices, often viewed as an early warning system for what consumers will eventually pay, climbed 6%, the biggest 12-month increase since December 2022. The yield on the benchmark 10-year Treasury note, meanwhile, has pushed up to roughly 4.6% as of this writing, a one-year high.
Warsh, who won confirmation on a 54-45 vote, is not taking over the rate-setting committee just to manage routine policy decisions. He’ll have to navigate the first real inflation scare since the post-pandemic surge, and he’ll have to do so while navigating a White House that has openly demanded lower interest rates, even as Trump said this week he would let Warsh act independently on rates.
According to the Motley Fool, what investors might expect from a Warsh-led Fed, and how rate-sensitive corners of the market could behave in the meantime, comes down to two facts: Prices are accelerating, and the new chair reportedly has historically cared more about inflation than the typical policymaker.
The Single-Family Asset Class
ATTOM, the leading provider of property data, AI-powered intelligence, and real estate analytics solutions, released its latest Vacant Property and Zombie Foreclosure Report showing that nearly 1.4 million homes, or 1.3% of residential properties in the United States, were vacant in the second quarter of the year. That was the same rate as the previous quarter and as in the second quarter of 2025.
The report analyzed publicly recorded real estate data collected by ATTOM, including foreclosure status, equity and owner-occupancy status, matched against monthly updated vacancy data.
Out of the country’s 104.9 million residential properties, 245,376 were in the foreclosure process in the second quarter. Of those, 8,312 (3.4%) were “zombies,” meaning the owners had abandoned the properties before the end of their foreclosure proceedings. The second quarter zombie rate was slightly higher than the 3.3% rate posted in the first quarter and at the same time last year.
“The increase in zombie foreclosures across most states may reflect a foreclosure market that is slowly returning to more normalized levels,” said Rob Barber, CEO of ATTOM. “At the same time, overall vacancy rates remain relatively steady nationwide, while zombie foreclosures still represent only a small share of homes in the foreclosure process.”
Properties owned by institutional investors were more than twice as likely to be vacant as residential properties overall in the second quarter. Out of 25.1 million institutional investor-owned homes, 890,135, or 3.5%, were vacant.
The states with the highest vacancy rates for investor-owned homes were:
» Indiana (7.1%)
» Illinois (6.2%)
» Kansas (6%)
» Oklahoma (6%)
» Alabama (6%)
The states with the lowest vacancy rates for investor-owned homes were:
» New Hampshire (0.9%)
» Vermont (1%)
» Idaho (1.3%)
» North Dakota (1.5%)
» New Jersey (1.6%)
