SVN® International Corp. Economic Update – Keeping our clients up-to-date about the latest real estate landscape trends.
The Federal Reserve cut rates by 25 basis points in September, signaling a more dovish stance despite lingering inflation concerns. Projections now show lower interest rates in 2025 and 2026, paired with slightly stronger growth expectations. While developers welcome the shift, volatility in bond yields remains a key risk, influencing property valuations across sectors. Meanwhile, national retail sales grew 4.8% year-over-year, and new home sales surged 20.5% month-over-month, pointing to resilient consumer demand even as affordability pressures persist.
In commercial real estate, office leasing showed improvement with national vacancy dropping to 18.7%, led by strong absorption in Houston and Manhattan. Transaction volumes rebounded to $115 billion in Q2, driven by multifamily and office activity, while sentiment among real estate executives rose sharply with expectations that asset values are bottoming. Still, challenges remain as CMBS delinquency rates for office and multifamily hit record highs and homebuilder confidence stayed weak. Overall, the data reflects cautious optimism: capital markets are stabilizing, select CRE sectors are strengthening, and housing activity is picking up as financial conditions begin to ease.
Click below to keep reading about the latest economic updates and real estate news!
