Employment Growth Decelerating; Implications for Commercial Real Estate

Higher Service Costs Shift Tenant Leasing Demand; Tariff Impact Still Forming

Recent GDP Estimates Provide Key Insights for Industrial, Multifamily Sectors

Employment Growth Decelerating: Implications for Commercial Real Estate

The Forces Driving Interest Rates Lower - Will They Last?

CRE Space Demand Trends for 2Q

Why CRE Fundamentals Are Poised To Improve

Tariff Effects Begin to Emerge, Delaying Fed Action Until Broader Impacts Unfold

New Tax Laws Ease Uncertainty: Implications For CRE Investors

Passage of Tax Bill Reduces Uncertainty, Amplifies Benefits of Commercial Real Estate Investment

Why 2025 Will Be A Turning Point For Commercial Real Estate

This November, California voters will decide if cities and counties can impose rent control on all apartments and single-family homes. If approved, the measure – Proposition 33 – could create unintended consequences for renters while also broadly impacting apartment owners and builders. Foremost among these could be the impact to development. Rent control could alter developers’ projected returns and suppress the long-term supply of apartments, prolonging the state’s housing shortage....

Unemployment rate hits a near three-year high. Total employment increased by 114,000 jobs in July, the second-lowest monthly gain in 2024 and falling well under the trailing-year average of 215,000 roles added. That hiring slowdown contributed to unemployment rising by 20 basis points month-over-month to 4.3 percent, the highest measure since October 2021 ...

Consumers propel GDP to larger increase. The annualized pace of GDP growth accelerated to 2.8 percent in the second quarter, up from 1.4 percent in the opening period of 2024. Momentum came predominantly from gains in consumer spending and private nonresidential investment, particularly for transportation equipment. These drivers are likely to ease moving ...   

Housing market remains in a state of disruption. Existing home sales slid to a six-month low in June 2024 as the median price eased by just 0.2 percent from May's all-time high and the average 30-year fixed-rate mortgage held near 7 percent. Softer purchase activity signals that buyers should gain leverage in the current climate, although a lack of entry-level home  ...

Job creation supported by business-cycle-agnostic sectors. The creation of 206,000 jobs in June brings total net hiring for the second quarter to 532,000, the lowest three-month total for employment growth since January of 2021. Much of the recent hiring slowdown has come from industries tied to the business cycle, including ...

Falling commodity prices reflect cooling economy. While pricing pressures remain above target 27 months into the Federal Reserve's current monetary tightening cycle, meaningful relief is beginning to show. Annual growth in the commodities less food and energy index — which captures pricing changes for non-necessity items such as recreation, vehicles and apparel — has been in negative territory ...

Labor market moving closer to equilibrium even amid strong hiring. Total employment increased by 272,000 in May, coming in above the average monthly gain year-to-date. Despite this uptick in job creation, there are several signs that overall labor demand is cooling and moving closer in line with labor supply. Nearly half of last month’s hiring was concentrated in just two main employment sectors, which includes roles in government. It is likely that public sector staffing needs will ebb in the months ahead as budget shortfalls are addressed. The unemployment rate also inched up 10 basis points from April to 4.0 percent in May, its highest mark since January 2022. This shift followed an April decline in the number of available positions to 8.06 million open jobs, the lowest level since February 2021. Equating to 1.2 available roles for every job seeker, this is the closest the margin has been since June 2021....

National apartment absorption surged from January through March 2024, reaching the strongest first quarter tally on record. Vacancy continued to rise amid aggressive construction, however, dictating greater concession use in development-heavy markets. All-time high home prices in early 2024 and persistently elevated interest rates nevertheless spotlight the cost-saving benefits of renting…

Higher mortgage rates influence buyer and seller motivation. The average 30-year fixed-rate mortgage climbed to a five-month high of 7.0 percent in April 2024, as the market responded to persistent inflationary pressures and Federal Reserve policy. Increasing borrowing costs, meanwhile, encouraged more prospective buyers to sit tight ...

Key CPI measures resume descent. Annual growth in the headline and core consumer price indices — the latter of which omits food and energy — lowered to 3.4 and 3.6 percent in April, respectively. While bumpy inflation over the last few months curbed Wall Street expectations for near-term overnight lending rate cuts by the Federal Reserve, April's cooler ...

Key GDP growth contributors post positive results. Real gross domestic product increased at an annual rate of 1.6 percent during the first quarter of 2024. While this is a deceleration from the 3.4 percent rate from the final quarter of last year, the economy still grew in several areas. U.S. residents continued to spend..

Energy cost spike bumps up inflation. Mounting costs for gasoline and electricity kept overall inflation elevated over the 12-month period ending in March. The headline CPI measure grew by 3.5 percent during the span, ticking up as the energy index moved into positive territory for the first time since February 2023. Geopolitical conflict ...

March logs the 39th straight month of job gains. Employment growth reached a 10-month high in March as 303,000 positions were added, while the unemployment rate adjusted down to 3.8 percent. Hiring was most prominent in health care, government, construction, and leisure and hospitality. Additions in health care and leisure and hospitality ...

More prospective buyers and sellers coming to terms. The number of existing single-family homes available for purchase swelled to a 40-month high in February 2024, reaching a level not seen since late 2020 and providing prospective buyers with new opportunities. Along with this increase of homes on the market, the pace of sales escalated in February to ...

Inflation trends cloud Fed's path. Still-elevated inflation is leading Wall Street participants to delay expectations for the Federal Reserve to start cutting interest rates this year — shifting from spring to summer. Alongside strong hiring in the opening months of 2024, February's higher headline CPI reading contributed to the Federal Open Market Committee's ...

Rising unemployment releases pressure on inflation. Employment growth accelerated in February with 275,000 jobs created, yet the unemployment rate also rose by 20 basis points to 3.9 percent. While the highest rate of unemployment in 25 months may be interpreted as a negative signal, in this case some labor market softening could ... 

Window of stronger buyer demand lifted home prices. The median sale price of an existing single-family home surged to a record high of $405,600 in January 2024, after holding under $400,000 for the majority of the past two years. That month-over-month growth was the largest since May 2022, a price escalation that was primarily a result of ...

Inflation metrics present mixed bag. The headline Consumer Price Index rose 3.1 percent over the year ended January, down 30 basis points from the December reading. Falling energy prices and flattening costs for food helped slow inflation, as supply chains remained fluid despite ongoing global conflict. However, when stripping these indices out ...

The year kicks off with strong job growth. Total employment rose by 353,000 in January, the largest increase since the same month in 2023, and similar to the 333,000 roles added in December. Unemployment held steady at 3.7 percent for the third month in a row despite this increase. Job gains predominantly occurred in professional and business ...