CRE This Week | Altus Research

The March employment report showed stable payrolls and 3.5% wage growth, keeping consumer finances relatively healthy and supporting rent collections across multifamily and retail properties. Home prices dipped 0.1% month-over-month, and with CPI running at 2.4%, real home values are declining year-over-year, quietly eroding housing wealth. Mortgage rates remain near 6%, which continues to keep many potential buyers on the sidelines and sustain demand for rental housing. Meanwhile, steady retail sales reflect a resilient consumer but reduce the urgency for the Fed to cut rates, leaving borrowing costs elevated and continuing to weigh on CRE refinancing activity and transaction volume.

Our Take

For private market investors, this month’s data paints a picture of an economy that is holding together without giving the Fed much reason to move quickly. Wage growth at 3.5% is meaningful. It supports the income side of the equation for both multifamily and retail landlords, and it tells us that the tenant base, broadly speaking, remains employed and capable of meeting rent obligations.

From an underwriting perspective, the housing data deserves attention. A 0.1% monthly decline in home prices may sound modest, but when you layer in 2.4% inflation, real home values are moving in the wrong direction for owners. That dynamic has a direct effect on multifamily demand. When buying a home feels financially out of reach, renting becomes the rational choice for a much larger pool of people. This reinforces one of the long-term demand drivers we consistently point to when evaluating rental housing investments.

For investors thinking about the broader rate environment, the picture requires patience. Steady retail sales are a sign of consumer resilience, but they also give the Fed cover to hold rates where they are. Elevated borrowing costs continue to suppress transaction activity and make refinancing difficult for owners who took on debt at peak pricing. That creates real stress in parts of the market, but it also creates opportunity for well-capitalized buyers who can move without relying on cheap debt.

In practical terms, the environment rewards conservative leverage and disciplined underwriting. Assets with durable cash flow and strong occupancy are well-positioned to outperform in this context, and from an investment standpoint, that distinction matters more in a constrained market than in a rising tide. The key takeaway is that selective, fundamentals-driven investing is not a hedge against uncertainty. In a market like this, the strategy is paramount.

Source: CRE This Week | Altus Research — Altus Group

If you’re curious about how our approach could fit into your portfolio, schedule a call to connect with our team. We’d love to talk through what we’re seeing and where we’re going next.