Key Insights

Inflation cooled to 2.8% in February, slightly below expectations, signaling progress in price stability. However, uncertainty remains as tariffs and trade tensions could drive up costs, complicating the Federal Reserve’s decision-making. With markets overwhelmingly betting on a Fed pause in March, policymakers will need to assess whether inflation continues to ease or if external pressures reignite price instability

Trade tensions escalated as Canada and the EU imposed reciprocal tariffs on US goods in response to the Trump administration’s steel and aluminum duties. The move raises costs for businesses and consumers while adding further volatility to an already uncertain economic landscape. The impact of these tariffs will depend on how negotiations unfold and whether additional retaliatory measures are introduced.

January retail sales grew 4.8% year-over-year, with grocery sales rising 5.0% due to reduced holiday discounts and stock-up demand, while home furnishings increased 5.2% as consumers refreshed their spaces. However, sustaining this momentum may be difficult as economic uncertainty and inflationary pressures could weigh on consumer spending in the coming months.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.82% (+8 bps)
10Y Treasury Yield: 4.32% (+4 bps)
FTSE NAREIT Index: 772.34 (-0.47%)
30-day SOFR Average: 4.35%

Market Pulse

Inflation Eases to 2.8%, Below Expectations – February CPI rose 0.2% MoM, with annual inflation at 2.8% and core at 3.1%, but uncertainty lingers as tariffs and trade tensions cloud future price stability (CNBC)

Markets Bet on Fed Pause – CME FedWatch traders see a 98% chance the Fed holds rates steady at next week’s meeting (CME)

Canada & EU Retaliate on Tariffs – Canada and the EU imposed reciprocal tariffs on U.S. goods, escalating trade tensions and raising costs for businesses and consumers (AP)

US Mortgage Rates Drop to Lowest Since December – 30-year fixed mortgage falls to 6.67%, lifting home purchase and refinancing demand ahead of the spring season (Bloomberg)

Policy & Industry Shifts

Congress Bill Targets Hedge Fund Home Buys – Sen. Merkley’s HOPE Act proposes taxes to curb institutional ownership of single-family homes (RISMedia)

Residential

Easing inflation and lower mortgage rates support consumer spending and housing demand, but escalating trade tensions and a likely Fed pause signal continued economic uncertainty

83% of Multifamily Investors Plan to Buy in 2025 – Buyers remain cautious but ready, watching Treasury yields and Fed policy for market timing (Bisnow)

Mortgage Applications Surge as Rates Decline – Weekly mortgage applications jumped 11.2%, with refis up 16%, as 30-year fixed rates fell to 6.67% (MBA)

California Homeowners Stay Put – LA homeowners hold properties for a record 19.4 years, driven by Prop 13 tax breaks and high mortgage rates (Redfin)

Orlando Leads in Apartment Growth – The metro added 14K units in 2024, with Kissimmee/Osceola County fueling 10% growth, driven by its proximity to major theme parks (GlobeSt)

Office

D.C. Office Occupancy Climbs as Federal Workers Return – Metro ridership and office swipes hit post-pandemic highs after Trump’s return-to-office mandate (Bisnow)

Industrial

Container Rates Decline Amid Tariff Uncertainty – Trans-Pacific rates down 40% YoY as shippers frontload imports ahead of potential tariffs (FreightWaves)

U.S. Rail Freight Up 5.5% YoY — Weekly traffic reached 497K units, with intermodal up 7.7% and carloads rising 2.6% (FreightWaves)

Market Mix

Retail sales growth reflects a mix of inflation-driven increases and genuine demand, with essentials like groceries staying strong while discretionary categories like home furnishings and apparel see steady gains. However, weakening entertainment spending and economic uncertainty may challenge sustained consumer momentum

Retail Sales Up 4.8% YoY — January retail sales rose, driven by inflation and higher volumes, but sustaining growth may be difficult amid economic uncertainty (Colliers)

Grocery & Home Furnishings Lead Gains – January grocery sales climbed 5.0% on reduced discounts and stock-up demand, while home furnishings rose 5.2% as consumers refreshed spaces (Colliers)

Steady Growth in Apparel & Department Stores —Clothing store visits increased 4.8% YoY, boosting sales by 3.6%, while department store traffic rose 3.6% (Colliers)

Entertainment & Fitness See Mixed Trends — Theater and music venue visits declined 1.3%, while fitness retail sales grew 2.4% (Colliers)

Financings

Blackstone-led venture looks to sell $395M in NYC-area property loans – Part of the Signature Bank debt it acquired in 2023 (Bloomberg)

M&A

Extell buys three NYC buildings for $103M – Plans Lenox Hill demolition for a 37-story residential tower as part of larger Madison Ave project (CommercialObserver)

Institutional Fundraising

Texas Teachers Commit $100M to Opportunistic Real Estate – Pension fund invests in CS Bevo I fund (IPE)

Distress Watch

Dalan moves to foreclose on $27.5M of Steve Croman’s loans – Part of a $140M portfolio acquired last year as distress mounts (TheRealDeal)