- The Brick Brief
- Posts
- Banks Say Consumer Spending Still Strong
Banks Say Consumer Spending Still Strong
Tariffs squeeze builders and shift retail habits
The Brick Breakdown
💳 Consumers keep spending despite growing unease
Major U.S. banks reported stronger-than-expected Q1 card spending, with usage rising 4–7% even as tariffs and recession fears weigh on sentiment. While corporates brace for softer conditions, consumers are still driving economic activity—for now.
🏗️ Tariffs squeeze construction as uncertainty deepens
Material cost hikes following the April 2 tariff wave are hitting developers hard, with 80% of builders reporting increases and one in five facing delays. As profit expectations plunge, the construction pipeline is showing signs of stress.
🛍️ Value retail and travel sentiment reveal shifting consumer habits
Retail visits dipped in Q1, but off-price apparel and discount dining outperformed as shoppers turned to budget options. Meanwhile, Canadian air travel to the U.S. fell 7.1%, highlighting how tariffs and political uncertainty are weighing on cross-border demand.

This Week in Real Estate: Key Events & Data

Quick Markets
30Y Mortgage: 6.92% (-6 bps)
10Y Treasury Yield: 4.33% (-2 bps)
FTSE NAREIT Index: 736.89 (+0.25%)
30-day SOFR Average: 4.35%
Market Pulse
Early 2024 data shows resilient consumer spending despite falling sentiment, while softening import prices and deepening manufacturing weakness point to mounting pressure as tariffs threaten to reignite core inflation
Import prices dip 0.1% in March as fuel costs fall – Inflation pressures eased before tariffs took effect, but economists warn trade war could soon drive core goods prices higher (Reuters)
Big banks report strong Q1 consumer spending – Card usage rose 4–7% despite tariff fears, though sentiment dropped and corporates brace for headwinds (WSJ)
NY manufacturing contracts again in April – Business activity remains negative at -8.1 as orders dip, prices surge, and future outlook hits second-lowest level in 20+ years (NYFed)

New York Fed Empire State Manufacturing Survey
Future general business conditions index fell to its second lowest reading
Policy & Industry Shifts
New federal spending rules and post-tariff cost spikes are reshaping development dynamics, with agencies shifting out of urban cores and builders facing widespread delays and profit compression amid rising material prices
Trump overhauls federal spending rules – New executive orders push agencies to move out of downtowns and buy off-the-shelf products to cut costs, repealing Carter and Clinton-era priorities (Bloomberg)
Tariffs hit construction outlook hard – 80% of builders report material cost hikes, 1 in 5 face project delays as profit expectations plunge post-April 2 tariff wave (Bisnow)
Residential
Home-price growth is expected to slow through 2026 as economic uncertainty and tariffs weigh on the market, while an estimated $731 billion in home equity remains inaccessible due to high rates and tightening credit conditions
Fannie: Home-price growth to slow in 2025 – Experts now forecast 3.4% appreciation this year and 3.3% in 2026, down from earlier projections amid tariff-driven economic uncertainty (HousingWire)
$731B in home equity is ‘trapped’ – High rates and credit constraints are locking homeowners out of their equity amid job losses and gig work volatility (HousingWire)
Industrial
Tariff shockwave halts container trade – U.S. ocean imports plunge 64% in early April as shippers frontload goods then freeze bookings amid tariff hikes and trade uncertainty (FreightWaves)

Market Mix
Retail behavior is shifting as consumers pull back on discretionary spending, with value segments like off-price apparel and budget dining outperforming in Q1 2025. At the same time, Canadian travel to the U.S. fell 7.1% and Microsoft paused a $1B data center project, underscoring broader caution amid tariff and economic uncertainty.
Canadian air travel to U.S. drops 7.1% from top airports – March decline reflects tariff uncertainty and weaker travel sentiment, per U.S. Department of Commerce (CoStar)
Retail visits dip, value segments shine in Q1 2025 – Off-price apparel and budget dining outperform as consumers cut discretionary spending and favor cost-saving alternatives (Placer.ai)
Bank closures free up prime retail – 1,354 U.S. bank branches closed in 2024 as digital banking grows, opening high-demand sites for restaurants and clinics (Bisnow)
Microsoft delays Catawba County data center plans – $1B North Carolina investment put on hold amid tech sector caution and growing economic uncertainty (BizJournals)

1,354 U.S. bank branches closed in 2024
Financings
Starwood provides $350M refi for Manhattan condo tower – Fortress, Bizzi & Bilgili JV secures loan for 88-story Greenwich project in NYC (CommercialObserver)
New York megadevelopment in Sleepy Hollow gets $238M refi – Hudson Bay Capital backs next phase of Biddle Real Estate’s 70-acre waterfront project, Edge-on-Hudson (TheRealDeal)
NYC’s Maverick lands $107M construction loan – Related Companies backs completion of 323-key hotel near Penn Station that Maverick seized from Chetrit Group after foreclosure (TheRealDeal)
Madison Realty Capital upsizes Brooklyn tower loan by $70M to $555M – Rabsky’s 1,098-unit project lease-up nears amid strong demand (CommercialObserver)
Feil Organization lands $65M loan for Manhattan Midtown office-to-resi conversion – Deutsche Bank backs 47-unit luxury project at 140 West 57th Street (CommercialObserver)
M&A
Building & Portfolio M&A
Exelon buys D.C. Pepco HQ for $175M – The 364K SF Washington, D.C. building trades at $481/SF as Exelon acquires its utility subsidiary’s longtime headquarters (BizJournals)
Normandy Real Estate buys Chicago Fulton Market apartments for $170M – Deal is Chicago’s largest multifamily sale since 2023 as supply tightens and rents rise (TheRealDeal)
Seattle-area apartments sell for $135.5M – Sterling Investors acquires 337-unit Timbers at Issaquah Ridge in one of the region’s largest multifamily deals this year (CoStar)
Xenia Hotels & Resorts sells Fairmont Dallas sells for $111M – REIT exits underperforming downtown asset amid mounting renovation costs and soft local hospitality outlook (TheRealDeal)
Distress Watch
Hilton Financial District in San Francisco dodges distress – Portsmouth Square lands $103M refi from Prime Finance and Cred REIT after two loan defaults, preserving control of 544-room hotel (TheRealDeal)
Proptech & Innovation
AI-powered mortgage startups are gaining traction as firms like Friday Harbor and Kastle streamline underwriting and origination, aiming to modernize outdated systems and cut costs amid tighter lending conditions
Friday Harbor raises $6M seed round to scale AI mortgage tech – Platform aims to streamline underwriting and document review, with backing from Abstract Ventures and support from AI2 Incubator (HousingWire)
Reply