Key Insights

US consumer confidence plummeted to a four-year low in March, with expectations for the next six months hitting a 12-year low, driven by persistent inflation worries and looming tariff escalations. This souring sentiment, coupled with 60% of CFOs bracing for a late 2025 recession, signals potential headwinds for real estate markets, as reduced consumer spending and economic uncertainty could dampen housing demand and slow transaction activity.

The Trump administration’s freeze on a $1.4 billion green retrofit program, combined with the FHFA’s termination of down payment and closing cost assistance for first-time buyers, has dealt a double blow to housing affordability, stalling projects and removing key support for new entrants to the market. These policy shifts threaten to deepen supply shortages and erode accessibility, potentially pushing rental and purchase prices higher as developers and buyers face increased financial hurdles in an already tight residential landscape.

New York City’s multifamily CMBS distress rate doubled to 14.4% in 2024, with Manhattan spiking to 29.8%, as older, rent-regulated properties struggle with rising operational costs and strict rent control laws that severely restrict revenue flexibility. As 25% of pre-1974 rent-stabilized buildings face delinquencies, property owners grapple with mounting financial pressure, and when these properties change hands, they trade at steep discounts as operating costs exceed rental income

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.80% (+3 bps)
10Y Treasury Yield: 4.32% (-1 bps)
FTSE NAREIT Index: 771.15 (-1.20%)
30-day SOFR Average: 4.33%

Market Pulse

The sharp decline in consumer confidence to a four-year low and CFOs' recession fears for late 2025 could pressure the Federal Reserve to maintain or adjust interest rates cautiously, balancing inflation risks from tariffs against slowing economic momentum

US consumer confidence fell to a four-year low in March – Expectations for the next six months hit a 12-year low as inflation concerns and escalating tariffs weighed on sentiment (Bloomberg)

CFOs Brace for Recession – 60% of corporate CFOs expect a US recession in late 2025, citing trade policy uncertainty and rising inflation risks (CNBC)

Policy & Industry Shifts

The Trump administration’s freeze on $1.4 billion in green retrofit funding and the FHFA’s termination of first-time buyer aid will likely worsen residential affordability, as stalled affordable housing projects and reduced buyer support exacerbate supply constraints and entry barriers in an already costly market

Trump administration freezes $1.4B green retrofit program – Hundreds of affordable housing projects are stalled as developers lose key funding for energy efficiency upgrades and essential repairs (Bloomberg)

FHFA Ends First-Time Buyer Aid – Down payment and closing cost programs terminated, shifting housing policy (Bloomberg)

Residential

Despite high borrowing costs, U.S. home prices climbed 4.1% year-over-year in January due to limited listings, while a modest 1.8% uptick in new-home sales and a premium for nature-inspired features signal resilient demand and evolving buyer preferences in a competitive real estate market.

US home prices rose 4.1% YoY in January – Limited listings kept upward pressure on prices despite high borrowing costs, though new listings have started to increase (Bloomberg)

New-Home Sales Rebound Slightly – February sales rose 1.8% MoM as better weather and builder incentives helped demand (Bloomberg)

Homes with nature-inspired features like soapstone countertops sell for up to 3.5% more – Organic modernism boosts resale value (Zillow)

Office

Manhattan’s upscale office market surged in 2024 – Class A and trophy buildings make up 57.7% of inventory, with 76.7% of leases signed in these spaces (GlobeSt)

Industrial

The surge in e-commerce, driving 56% of 2024 retail sales growth, continues to boost demand for logistics space, while Schneider Electric’s $700 million grid investment signals a robust industrial real estate outlook, supporting smart factories and data centers amid AI-driven power needs.

E-Commerce Drives Logistics Demand – US e-commerce accounted for 56% of retail sales growth in 2024, fueling logistics space demand as online retailers expand footprints (Prologis)

Schneider Electric will invest $700M in US grid – Funds will support smart factories and data center growth amid rising AI-driven power demand (Bisnow)

Financings

Wells Fargo funds $167M for Midway Village Phase 2 in California – Financing supports 113 affordable units in Daly City, including supportive and Section 8 housing (CommercialObserver)

Pennrose secures $73M for Phase III of Herndon Square in Atlanta – 178 mixed-income units planned, with 151 affordable LIHTC homes (MultiHousingNews)

Peachtree finances $63M for Yorkshire Apartments – The loan supports 280 units in Tumwater, with 20% affordable housing (CommercialObserver)

M&A

PE firms show strong interest in 2,000 stores divested in 7-Eleven deal – Couche-Tard planning divestiture of convenience stores to gain antitrust approval for $49B Seven & i acquisition (Bloomberg)

Acadia Realty Trust acquires Pinewood Square in Lake Worth Beach, FL for $68M – The 97K SF center features T.J. Maxx and Ross Dress for Less as tenants (TheRealDeal)

Distress Watch

Rent control laws in NYC, coupled with soaring operational costs, are severely limiting revenue flexibility for multifamily property owners, driving distress and threatening the long-term viability of these real estate assets as 25% of pre-1974 rent-stabilized buildings face delinquencies

NYC multifamily CMBS distress rate doubles – Rate hit 14.4% in 2024, with Manhattan at 29.8%, due to older properties and rent regulations (CommercialObserver)

25% of pre-1974 rent-regulated properties in NYC face delinquencies – Impact of rent laws and rising costs intensify distress (TheRealDeal)