What should investors focus on as interest rates rise? How could the Fed’s latest guidance impact the CRE market? How can CRE investors best position themselves in the current climate?

White House aims for greater housing affordability. Incentivizing the construction of lower-income housing in various forms is the primary goal of the Housing Supply Action Plan, updated this October. In particular, a proposed income averaging provision for the Low-Income Housing Tax Credit would make development more feasible in sparsely-populated areas, by no longer requiring all tenants to meet the same income threshold. This change joins a series of other alterations and additions, designed to ease the… Read More

Distinct trends forming among CPI measures. Descending from a June peak of 9.0 percent, the headline Consumer Price Index rose by a year-over-year rate of 8.2 percent in September. Much of this recent downshift has been driven by declining gasoline prices, a trend that could prove temporary. The war in Ukraine, OPEC production cut-backs and a series of domestic maintenance issues are limiting oil supplies, while the ability to pull from the Strategic Oil Reserve… Read More

Hiring continues, but signs of slowdown emerging. The labor market welcomed 263,000 new jobs in September, above the long-term monthly average, but below the mean pace set so far this year of 420,000 positions. Hiring was heavily concentrated in sectors that are still recovering — most notably leisure and hospitality — and in fields of critical need, such as healthcare. Combined, both sectors added 143,000 staff. Other industries, including financial activities, transportation and warehousing declined.… Read More

Yahoo Finance Features Marcus & Millichap President and CEO Hessam Nadji Rising Interest Rates Pose Challenge to CRE Valuations; Investors Adapt Strategies to Evolving Climate Fed’s message against inflation points to significant slowdown Strong employment fundamentals positive factor for CRE Rising interest rates moderating post-pandemic CRE surge, valuations recalibrating Housing pullback from unprecedented surge; bolsters rental demand Offices still facing headwinds, many owners adapting creatively

Federal Reserve enacts fifth rate hike of the year. Following accelerated core CPI inflation and ongoing above-average hiring last month, the Federal Reserve raised the overnight lending rate 75 basis points at its September meeting. This is the third consecutive rate hike of this magnitude, extending the target range of the federal funds rate above 3 percent. September also marked an increase in the level of Fed balance sheet reductions, to an estimated $95 billion… Read More

Pair of drivers back positive retail momentum. Store-based retail sales, which exclude automotive and gas purchases, as well as those made online or at bars and restaurants, ascended to a record mark in August. Much of this gain, however, was likely driven by rising prices, as inflation has sustained levels above 7 percent so far this year. Nevertheless, even after adjusting for inflation, core retail sales are up nearly 19 percent from the pre-pandemic tally,… Read More

Headline and core inflation trend in opposite directions. In August, the headline Consumer Price Index recorded a year-over-year increase of 8.3 percent, slightly below the 8.5 percent rise recorded the month prior. The core CPI measure, excluding food and energy, advanced at a faster pace, however, ascending 6.3 percent year-over-year in August compared to 5.9 percent in July. This dichotomy is due to the influence of a sharp drop in gasoline prices on the headline… Read More

Last month’s employment report ideal for Fed objectives. Employers added 315,000 personnel to payrolls in August, below the 526,000 jobs created in the previous month, but well above historical averages. The month-over-month hiring slowdown, together with a slight increase to unemployment, lowers the likelihood of a 75-basis-point rate hike at the next Federal Reserve meeting in favor of a smaller margin. The central bank is still likely to raise the overnight lending rate at least one… Read More

TD Ameritrade Features Marcus & Millichap CEO Hessam Nadji CRE Market Strong through Second Quarter; Investors Adapting to Market Forces as Headwinds Emerge What higher interest rates mean for CRE and how investors are recalibrating strategies Key drivers maintain support for CRE, but headwinds emerging The long-term implications of the hybrid work model and the forces that will revive demand Key strategies driving Marcus & Millichap’s growth plan