Key Insights

The Federal Reserve kept interest rates unchanged at 4.25% to 4.5% but reaffirmed expectations for two cuts later this year. While inflation remains above target, officials signaled that easing policy may be necessary if economic conditions weaken. Lower rates could ease pressure on mortgage rates and SOFR, making borrowing more affordable for homebuyers and commercial real estate investors. A decline in SOFR would reduce short-term financing costs, benefiting floating-rate debt and construction loans, while lower mortgage rates could improve housing affordability and stimulate home sales. 

The Fed lowered its 2025 GDP forecast to 1.7% while raising its inflation projection to 2.7%, citing trade policy disruptions and slowing consumer demand. Ongoing tariff uncertainty and weakening spending could weigh on business investment and job growth, creating headwinds for commercial real estate, particularly in retail and office sectors.

Zillow lowered its 2025 home value growth forecast to 0.6% as rising inventory slows price appreciation, reflecting a shift toward a more balanced housing market. At the same time, the US renter population increased by 0.8% in Q4, matching homeownership growth for the first time in over a year, as affordability challenges kept more households in the rental market.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.80% (-1 bps)
10Y Treasury Yield: 4.25% (-5 bps)
FTSE NAREIT Index: 779.87 (+0.017%)
30-day SOFR Average: 4.34%

Market Pulse

The Fed's cautious stance reflects mounting economic uncertainty, with tariff-related disruptions weighing on growth and inflation, which could delay rate cuts and keep borrowing costs elevated for real estate

Fed Holds Rates Steady, Signals Two Cuts in 2025 – The central bank kept rates at 4.25%-4.5% but reaffirmed expectations for two cuts this year (CNBC) 

Fed Lowers Growth Outlook Amid Tariff Uncertainty – The Fed cut its 2025 GDP forecast to 1.7% and raised its inflation projections to 2.7%, citing trade policy disruptions (WSJ)

Policy & Industry Shifts

Treasury Weighs CDFI Fund Cuts – Secretary Scott Bessent faces pressure to balance White House cost-cutting with preserving $300B in low-income lending (Bloomberg)

Freddie Mac Orders Full Return to Office – Employees must return five days a week starting in May as leadership reviews compensation plans and office amenities (Bloomberg)

Residential

Slowing home price growth and rising listings indicate a more balanced housing market, while persistent affordability challenges are keeping more households in rentals, even as rents decline across top metros

Zillow Cuts Home Value Growth Forecast to 0.6% – Rising listings slow prices, while 2025 home sales are expected to rise 1.1% but stay below pre-pandemic levels (Zillow)

US Renter Population Up 0.8% in Q4 – Rentership growth matched homeownership for the first time in over a year, with high-cost metros seeing the highest rental rates (Redfin)

US Home Listings Fell 2% in February – Inventory remains down 69% from its 2018 peak, with Pecos, TX seeing the largest gain and Seneca Falls, NY the biggest drop (TheRealDeal)

US Mortgage Rates Rise for First Time in Nine Weeks – The 30-year fixed rate climbed to 6.72%, reducing refinancing activity by 13%, while purchase applications remained flat (Bloomberg)

Rents Fall for 19th Month Across Top 50 Metros as Supply Shrinks – Median rent dropped 0.9% YoY to $1,691, while multifamily permits fell 15.7%, raising future supply concerns (Realtor.com)

Multifamily Investors Target Southeast in 2025 – 65% plan expansions, favoring core-plus strategies amid strong rental demand (GlobeSt)

Office

Office Visits Lag Despite RTO Mandates – Nationwide office visits remain 36.3% below pre-pandemic levels, with YoY declines in most major cities as remote and hybrid work persists (GlobeSt)

Earnings

General Mills' weaker sales signal declining consumer confidence, as higher prices and economic uncertainty lead to more cautious spending, particularly on discretionary and away-from-home purchases

General Mills missed Q4 revenue expectations as sales fell 5% year-over-year, prompting the company to lower its fiscal 2025 outlook. The cereal giant cited macroeconomic uncertainty and weakening consumer demand, particularly in snacking and away-from-home food channels (Investopedia)

Financings

$253M Nashville Mixed-Use Development Construction Loan – SomeraRoad and Trestle Studio secured a $253M loan from InterVest Capital Partners and Bank OZK to build two mixed-use developments in Nashville (GlobeSt)

$231M NYC Rental Building Refinancing – Glenwood secured a $231M loan from NYS Housing Finance Agency for its 339-unit Lincoln Square property  (TheRealDeal)

M&A

Highwoods Properties acquires $140M Raleigh, NC Office – Highwoods Properties acquired the fully leased Advance Auto Parts headquarters in Raleigh, its largest post-pandemic deal  (CoStar)

Journey Capital acquires $102M Plantation, FL Multifamily Complex – The firm acquired the 404-unit complex from Encore Capital Management with an $89.7M loan from Corebridge Financial (TheRealDeal)

NYSCRF Buys $85M Baltimore Industrial Property – The pension fund acquired the 73%-occupied City Logistics site from MRP Industrial (IPERealAssets)

Corebridge, RMR Group Buy $73M Pompano Beach, FL Apartments – The firms acquired the 225-unit Avana Bayview complex from Ivanhoé Cambridge at its 2021 purchase price (CommercialObserver)

Post Investment Buys Palmdale, CA Apartments for $71M – The Beverly Hills-based firm acquired the 296-unit Chaparral Apartments with a $52.6M loan from KeyBank (TheRealDeal)

Distress Watch

The lawsuit against CrowdStreet underscores the risks in crowdfunded real estate investing, highlighting the need for greater transparency, regulatory compliance, and investor protections in the sector

CrowdStreet Faces $1B Class-Action Lawsuit – Investors seek to liquidate over $1B in crowdfunding investments, alleging the platform operated as an unregistered broker-dealer before 2023 (TheRealDeal)

$55M California Freight Terminal Sale – Bankrupt trucking giant Yellow terminated its lease on a 325-door terminal in Bloomington, CA, for $55M (FreightWatch)