SVN® International Corp. Economic Update – Keeping our clients up-to-date about the latest real estate landscape trends.
The latest economic data points to a slowing but still resilient U.S. economy. First-quarter GDP growth was revised downward to 1.6%, reflecting softer consumer spending and lower inventory investment, while business equipment spending remained a bright spot, driven largely by continued investment in AI-related technologies. At the same time, consumer sentiment fell to a record low as households continue to grapple with elevated prices and inflation concerns. Federal Reserve policymakers maintained a cautious stance, signaling that interest rates may remain higher for longer as inflation remains above target and geopolitical uncertainty continues to weigh on the outlook.
Commercial real estate markets are showing mixed performance amid these economic conditions. Property prices posted modest gains overall, led by continued recovery in the office sector, while industrial appreciation slowed and multifamily and retail assets remained under pressure. Investor sentiment has become increasingly defensive as elevated borrowing costs and limited liquidity constrain transaction activity. Meanwhile, housing affordability challenges continue to influence migration and rental trends, with lower-cost markets attracting more young families and rental demand remaining supported by a constrained for-sale housing market. Despite ongoing headwinds, select sectors and markets continue to demonstrate resilience as the broader recovery progresses gradually.
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