CPI inflation down, but Fed does NOT cut rates (yet).
The Gray Report Podcast
by Spencer Gray
14h ago
On the same day that the CPI showed yearly inflation ticking down to 3.3%, with zero price growth last month, the Federal Reserve released its updated economic projections along with commentary that raised the possibility of an interest rate cut this year, but there was little definitive indication on when that might take place. While CRE markets are showing more signs of adjustment to "higher for longer" rates, the improved inflation numbers and potential for lower rates are meaningful developments for the CRE lending market that is continuing to feel pressure fr ..read more
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Is Now the Time to Invest in CRE?
The Gray Report Podcast
by Spencer Gray
14h ago
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CPI inflation is down. Are interest rates next?
The Gray Report Podcast
by Spencer Gray
1w ago
Consumer price index numbers show inflation down from 3.5% to 3.4% year-over-year in April, with monthly inflation numbers falling from 0.4% to 0.3%. It may be a bumpy road to the Federal Reserve's inflation target, but given the moderation in the job market along with these latest numbers from the CPI, speculation that the Fed will lower interest rates in September may have some validity, but in the meantime, elevated interest rates will put pressure on multifamily borrowers as the issue of loan maturities persists as a background factor that continues to shape the motivations of apartment bu ..read more
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Apartment Demand Growth Amid Record Supply
The Gray Report Podcast
by Spencer Gray
1w ago
As a historic wave of newly-built apartments continues beyond the one-year mark, elevated absorption numbers and data showing the first positive growth in occupancy in 2+ years are noteworthy signs of resilience in the apartment market. In the broader economy, lower jobs numbers and declining consumer credit suggest a pullback in consumer spending and (hopefully) lower inflation, but while consumers may balk at ever-pricier Big Macs or Frappuccinos, apartment housing is still in high demand. Sources discussed in this episode: RealPage: “Apartment Occupancy Ticks Up for the First Time Since E ..read more
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Fed Says No to Rate Cuts. What's Next for Apartment Investors?
The Gray Report Podcast
by Spencer Gray
1w ago
With the Fed’s recent decision to keep rates at their current elevated levels, investors are facing a choice between increasingly positive multifamily fundamentals and an extended period of difficult financing. CNBC: “Fed keeps rates steady as it notes ‘lack of further progress’ on inflation” - https://www.cnbc.com/2024/05/01/fed-rate-decision-may-2024-.html Apartment List: “National Rent Report: ‘[G]rowth stalled out this month’” - https://www.apartmentlist.com/research/national-rent-data CBRE: “The Past May Still Be Prologue in Multifamily Markets” - https://www.cbre.com/insights/briefs/m ..read more
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Mixed Signals for the Economy, Confidence for Multifamily
The Gray Report Podcast
by Spencer Gray
1w ago
Multifamily investor sentiment improves even as debt financing challenges continue. Strength in the labor market, robust apartment demand, and stable consumer sentiment are some of the reasons behind this, but another significant factor is the decline in the multifamily construction pipeline. NMHC: “Quarterly Survey of Apartment Conditions (April 2024)” - https://www.nmhc.org/research-insight/quarterly-survey/2024/nmhc-quarterly-survey-of-apartment-conditions-april-2024/ Fannie Mae: “Commercial-to-Residential Conversions: A Review of Existing Research” - https://www.fanniemae.com/media/51071 ..read more
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Fed delays rate cuts: Is this a multifamily buying opportunity?
The Gray Report Podcast
by Spencer Gray
1w ago
Comments this week from Federal Reserve Chair Jerome Powell are among the most forceful indications yet that interest rate cuts may be delayed past initial expectations. While some extreme predictions push the rate cuts all the way out to March 2025, futures data is pointing closer to September (at the moment). These shifting interest rate expectations may curb the activity of a CRE sales market that was just beginning to revive after a sluggish 2023, but strong housing demand and solid apartment fundamentals continue to attract investor attention in the multifamily market. Reuters: “Blunt Po ..read more
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CPI, Interest Rates, and Blackstone's $10B Multifamily REIT Acquisition
The Gray Report Podcast
by Spencer Gray
1w ago
A 3.5% annual jump in CPI inflation numbers has led investors and experts to rethink their expectations of an interest rate cut in mid-year 2024, but Blackstone's recent agreement to acquire Apartment Income REIT Corp. for $10 billion could spark greater investment activity in spite of elevated interest rates, especially given the improving fundamentals in the apartment market. Sources discussed in this episode: CPI: “Consumer Price Index, March 2024” - https://www.bls.gov/news.release/cpi.nr0.htm The Wall Street Journal: “Blackstone Making $10 Billion Multifamily Purchase, Going on the Real E ..read more
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Getting Excited about a "Normal" Market
The Gray Report Podcast
by Spencer Gray
1w ago
Sources discussed in this episode: Moody’s Analytics: “Q1 2024 Preliminary Trend Announcement” - https://cre.moodysanalytics.com/insights/cre-trends/q1-2024-preliminary-trend-announcement/ The Conference Board: "U.S. Leading Economic Index" - https://www.conference-board.org/topics/us-leading-indicators The Wall Street Journal: "What's Wrong with the Economy? It's You, Not the Data" - https://www.wsj.com/economy/consumers/whats-wrong-with-the-economy-its-you-not-the-data-cfa911e6 Bureau of Labor Statistics: "The Employment Situation - March 2024" - https://www.bls.gov/news.release/empsit.n ..read more
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Fed Keeps Rates Steady (and High)—Multifamily Impacts
The Gray Report Podcast
by Spencer Gray
1w ago
The Federal Reserve has thus far not deviated from its projections of 3 federal funds rate reductions in 2024, but it is in no hurry to start. While current elevated rates are not ideal for multifamily borrowers, multifamily investors with a longer-term view of the apartment market and housing demand have markedly increased their intentions to invest this year. Sources discussed in this episode: The Wall Street Journal: “Stocks Gain after Fed Holds Rates Steady” - https://www.wsj.com/livecoverage/fed-meeting-fomc-interest-rate-decision-march-2024 Trepp: "Trepp Property Price Index (TPPI): R ..read more
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