There are Encouraging Signs, But No Clear Direction…Yet

directional signs pointing in different directions

Long-term rates have been rising since their recent lows in September. The bond market is reacting to uncertainty – uncertainty about inflation, jobs, tariffs, tax cuts, and deficits.

The latest news is mixed. We had a strong employment report for December, followed by more benign PPI and CPI data. We have real job growth, and wages are catching up with prices. The wave of apartment deliveries has crested, and demand for housing is strong. NAHB just reported that prices for inputs to new residential construction grew at the slowest pace since 2014. There are encouraging signs but no clear direction as to where we are headed, at least not yet.

For multifamily developers and owners, every decision is a long-term decision. Uncertainty is tough. When things are unclear, it’s hard to spend time and money on new projects – even projects that you know will be successful. It’s hard to know how much and, importantly, when to commit.

Things will become clearer in the coming months, and the real estate cycle will turn. We just need a little help from rates.

If you have a project that needs financing or just want to talk through the options, we welcome the opportunity to speak with you about it. Please schedule a call.