The Federal Reserve Open Market Committee decided against cutting rates this week, which is line with expectations, but current projections point to the Fed cutting rates by 50 BPS by the end of the year. Multifamily real estate is not exempt from the potential for loan distress, but among CRE sectors, multifamily continues to attract the most investor attention, even though the current uncertain economy has some opting to wait for more stability and predictability before investing in CRE at the moment.

Multifamily, the Nation, and the Economy

Commercial real estate capital still sidelined; foreign investors pulling back

John Burns Research and Consulting: “More than half of investors report that foreign investors are modestly (42%) or significantly (10%) shrinking their appetite for US CRE investments compared to 2024. Reduced foreign capital could intensify liquidity pressures, especially in gateway markets that rely heavily on international investment.”

• What We Got Right – and Wrong – About the U.S. Economy So Far in 2025 (RealPage) 
   
• Have Tariffs Increased Inflation? Not Yet… (Marcus & Millichap)
  
• “The macroeconomic landscape remains highly uncertain,” and CRE braces for “higher-for-longer” interest rates (Cushman & Wakefield)

Multifamily and the Housing Market

Occupancy Slumps in Major South Region Markets

RealPage: “Occupancy in the South tightened 170 basis points (bps) to 94.8% in the year-ending May. Still, that rate fell 80 bps below the U.S. norm (95.7%) and ranked the South as the only region with occupancy trailing the U.S.”

• Buyer-Friendly Housing Market Grows as Home Prices Hold Steady (Realtor.com)
   
• Expert Panel Expects Moderating Home Price Growth through 2026 (Fannie Mae)
   
• “The ripple effects of unaffordable—or unavailable—insurance reaches beyond individual households and is distorting entire housing markets.” (Cotality)

Multifamily Markets and Reports

Student Housing Report: June 2025 – “Preleasing Stays On Pace, Rent Growth Stalls”

Yardi Matrix: “A decline in international students could hinder enrollment growth and reduce demand for off-campus housing, where these students often represent a significant share,” particularly in large public universities.

• Sharp Drop in Multifamily Production Brings Overall Housing Starts Down (NAHB)
    
• Miami’s Rental Market Is Red Hot, Fueled by Florida’s Renewed Momentum (RentCafe)
   
• The Most Precarious Housing Markets in the U.S. Right Now (GlobeSt)

Commercial Real Estate and the Macro Economy

Bank CRE Loan Performance Q1 2025: Origination Volumes Slightly Down, Potential Green Shoots for the Office Sector

Via Trepp: “Commercial mortgage originations slowed down to $5.1 billion in Q1, down from $5.6 billion in Q4, halting the upward trend from the beginning of 2024 . . . Office loan delinquencies dropped over 20 basis points to 6.54%, marking a second consecutive quarter of improvement, while the multifamily delinquency rate saw a continuation of the recent increase trend.”

• U.S. Retail Monthly Foot Traffic & Sales Analysis | May 2025 (Colliers)
   
• U.S. Life Sciences Talent Trends 2025 (CBRE)
   
• Real Estate Investors Ask, “Et Tu, 2025?” [Also they ask “where’s the distress?”] (MSCI)

Other Real Estate News and Reports

Builder Sentiment at Third Lowest Reading Since 2012

Via NAHB: “Buyers have increasingly moved to the sidelines due to elevated mortgage rates and tariff and economic uncertainty. Consequently, the latest HMI survey revealed that 37% of builders reported cutting prices in June, the highest percentage since NAHB began tracking this figure on a monthly basis in 2022.”

• For Industrial Markets, Stability Takes Priority Amid Modest Economic Growth (CBRE)
    
• Fed Holds Rates And Cuts Forecasts, Leaving CRE In ‘A Kind Of Purgatory’ (Bisnow)
   
• Nine Renters for Every Vacancy Signal Ongoing Apartment Shortage (GlobeSt)