The Federal Reserve increased the federal funds rate by 25 basis points, lifting the overnight lending rate to a range of 1.75 percent to 2 percent. Citing stronger consumer spending, and a highly optimistic business community, the Fed laid out the potential for two additional rate hikes in 2018. The Fed noted strong job growth, accommodative fiscal policy and above-target inflation as reasons for continuing to normalize monetary policy over the coming months.
Investors coming off another robust year of investment sales activity appear to be adopting a more conservative outlook, but sentiment levels point to an active 2019.
Fed raises benchmark interest rate, plots path for additional increases. The Federal Reserve increased the federal funds rate by 25 basis points, lifting the overnight lending rate to 1.5 percent. While the Fed noted that the inflation outlook had moderated in recent months, an upgraded economic forecast factoring in recent tax cuts and a rollback in regulation strengthened growth projections for the next two years. As a result, the Fed has guided toward two additional… Read More
For a fifth consecutive year, millennials led home purchase activity, comprising 36 percent of the buyers in 2017. The oldest millennials are now 37, and as this generation ages and starts families, a wave of potential new buyers are moving into the market. Approximately two-thirds of first-time buyers in 2017 were millennials, but housing affordability remains a concern in 2018 as home listings under $200,000 continue to shrink. Homes in this price tranche have fallen… Read More
Robust housing demand spurred by steady employment gains and wage growth ticked up the homeownership rate by 60 basis points to 64.2 percent at the end of 2017. The increase was driven by a 220-basis-point advance in the homeownership rate for those under age 35 to 36.4 percent. Though it is encouraging that this age group is actively purchasing homes, this segment remains below its pre-recession rate of 40 percent, indicating there is still room… Read More
Retail sales accelerate as unemployment rate tumbles. Retail spending posted another strong month with help from an incredibly tight labor market. The 3.8 percent unemployment rate has placed upward pressure on wages as many companies compete for quality employees. This trend has supposed modest but steady wage growth, driving the annual pace of the wage gains to 2.7 percent in May this year, in turn supporting a 5.1 percent increase in core retail sales. With… Read More
Rising interest rates spark fear from investors but reflect persistently strong economic growth that underpins commercial real estate performance. The 10-year Treasury rate inched past 3 percent for the first time since late 2013 following the “taper tantrum.” Though many investors fear the rising rates will erode their investment yields, they must consider the strength and durability of the current economic cycle and how it will continue to support commercial real estate performance.
Federal Reserve raised overnight interest rate, signals another hike in December. Following the conclusion of its September meeting, the Federal Reserve raised the federal funds rate by 28 basis points to 2 percent. Citing persistent levels of inﬂation, burgeoning acceleration in wages and exceptionally low unemployment, the Fed also outlined plans for an additional rate increase in December.
Commercial real estate investors coma into 2018 riding a high following approval of the Tax Cuts & Jobs Act. Yet the latest NREI/Marcus & Millichap Investment Sentiment Survey shows that the bounce in positive sentiment that occurred in the wake of tax reform has now drifted back to levels in alignment with this time last year.
Opportunity Zones, areas in each state where Qualified Opportunity Funds can invest gains from other investments into real estate and businesses to defer and reduce capital gains taxes, were introduced as part of the Tax Cuts and Jobs Act in December 2017.