May 09 2025

Reef Daily

Reef Daily | May 09 2025

Housing Market Update

Latest Market Data (May 9, 2025) Mortgage rates remained stable this week, with the 30-year fixed rate holding steady at 6.76% for the week ending May 8, according to Freddie Mac. This represents a significant improvement from a year ago when rates were at 7.09%. The 15-year fixed rate decreased slightly to 5.89%, down 3 basis points from last week's average of 5.92%.

Builder confidence continues to face challenges, with the NAHB Housing Market Index falling to its lowest level in five months as reported yesterday. This decline reflects growing concerns among builders about rising costs and affordability roadblocks for potential buyers.

Mortgage Rates

Type	Today's Rate	Last Week's Rate
30-year fixed	6.83%	6.76%
15-year fixed	6.01%	5.93%
5/1 ARM	6.25%	6.19%

Notable Transactions

Commercial Highlights Invesco Commercial Real Estate Finance Trust (INCREF) closed its first-ever $1.2 billion commercial real estate collateralized loan obligation yesterday, representing the largest diversified CRE CLO issued in the U.S. in the past three years. The portfolio is strategically balanced with 55% multifamily and 45% industrial loans, focused on high-growth "Smile States" from California to the Carolinas.

CBRE arranged a significant 53,414-square-foot lease for San Gabriel/Pomona Regional Center at The Campus at SGV in Irwindale, marking the largest new office lease transaction in the San Gabriel Valley year-to-date. The 12-year agreement brings the Campus at SGV to 95% occupancy.

A notable retail acquisition was completed as 2160 Jericho Turnpike LLC purchased a 52,679-square-foot retail property in Commack for $16.1 million. The fully occupied property houses tenants including Applebee's, PetSmart, and Sanjha Bazaar food market.

Regional Activity In the Southeast, Greek entered the Florida market with the purchase of a 100,000-square-foot industrial building near Tampa for $23 million. This transaction highlights continued investor interest in Florida's industrial real estate sector.

Market Indicators

The Federal Reserve maintained its benchmark interest rate at the 4.25% to 4.5% range yesterday, as widely expected. In his press conference, Fed Chair Jerome Powell confirmed a "wait-and-see" approach amid economic uncertainty.

On the international trade front, the U.S. and United Kingdom reached a trade agreement yesterday. While this development may have limited direct impact on housing markets compared to trade with countries supplying construction materials, economists note that "any de-escalation of the global trade war is a welcome development" for consumer confidence.

Mortgage applications jumped 11% last week according to the latest Mortgage Bankers Association data, with purchase applications leading the way, up 12% compared to the previous week and 13% higher than a year ago. This surge indicates buyers may be adjusting to the elevated but stable rate environment.

Regional Developments

The San Gabriel Valley commercial real estate market continues to demonstrate strength, recording an 8.4% overall vacancy rate in Q1 2025, among the lowest in Greater Los Angeles. This highlights the area's strong demand for office space despite challenges in other markets.

Housing market observers reported a notable slowdown in buyer activity in South Florida since mid-April when tariff announcements created market uncertainty. Local brokers expect May sales figures to be sharply lower than the same period in previous years, though this week's trade agreement news could help stabilize sentiment.

Builder confidence in the Northeast has been particularly affected by concerns about potential tariff impacts on construction costs, according to regional data released yesterday.

Retail properties on Long Island continue to attract investors, with recent transactions demonstrating healthy cap rates in the high 6% range.

Sources

This newsletter is for informational purposes only and should not be considered as financial advice.