Why the Fed is having problems with wage growth Three forces sustaining the labor shortage How the labor shortage is affecting the CRE market

Federal funds rate pushed to 16-year high. On May 3, the Federal Open Market Committee lifted the overnight lending rate to a lower bound of 5.0 percent, a 25-basis-point shift. The FOMC has raised the federal funds rate a combined 75 basis points so far in 2023, just one-sixth of last year’s total shift. Going forward, the path is more open. Chairman Powell stated that the FOMC will take a meeting-by-meeting approach to any further monetary… Read More

Local apartment demand resisting broader headwinds. The New York City multifamily sector entered 2023 on strong footing. Nearly as many apartments were absorbed on a net basis last year as were constructed, which stands in sharp contrast to the national trend of increasing vacancy. Overall, roughly 70,000 more apartments are occupied today in the metro than before the pandemic began, as pent-up demand to form households offset an overall retreat in the local population. Moving… Read More

The Fed announced a 0.25% increase in the Federal Funds rate at the FOMC meeting on May 3rd, pushing the Target Rate to 5.00% – 5.25%. The move was widely expected by the market as inflation has been moving in the right direction, hitting 5.0% in March compared to 6.0% in April and down f rom 9.0% at its peak in June 2022. In its announcement, the Fed softened its…

How the Federal Reserve’s rate increase could affect CRE investments Has the Fed put more banks at risk? Implications for CRE lending What comes next for the Fed – will they pause the rate increases?

Home sales fall again as interest rates tick back up. After climbing to a five-month high during February, the pace of home sales regressed in March as the latest Federal Reserve rate hike helped push borrowing costs upward. The average 30-year fixed-rate mortgage had settled to 6.3 percent across the opening two months of 2023, prompting more prospective homebuyers to pursue listings. However, the mean borrowing rate ticked back above…

Economy grows in the first quarter, but at slowing pace. Real gross domestic product increased at an annual rate of 1.1 percent in the first quarter of this year. Factors contributing to this growth include gains in consumer spending, exports, and government spending. Last quarter’s improvement to GDP was nevertheless a deceleration from the 2.6 percent annual rate reported for the final three months of 2022. An uptick in imports, along with a slowdown in…

Reconciling key economic trends with the media’s portrayal Will CRE face a reset? What the numbers tell us… How CRE performance today stacks up against pre-pandemic results

Consumers prioritize food and personal care items. For a second consecutive month, total retail sales dropped; however, a pair of necessity-based categories continued to record gains. In March, health and personal care shops registered a third consecutive month of growth, with sales rising 0.3 percent. Meanwhile, grocery store purchasing increased slightly amid a decline in food at home inflation. The divergence between these two segments’ performance and overall retail spending indicates…

Supply and demand outlook for four main property types Will record apartment and industrial construction outpace demand drivers? Construction pipeline for 2024-2025 – will there be a respite?