Commercial Real Estate is Under Water, Home Prices Rise, and Builder Confidence Rebounds

September 18, 2024



In this edition of Above the Line, we see a further divide between CRE and residential. Commercial mortgage debt is surging amidst rising delinquencies, while there’s an unexpected uptick in home prices, and  renewed confidence among home builders. These three stories below offer crucial insights for real estate and finance professionals as we navigate these markets.

Let's dive in. 

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U.S. Commercial Mortgage Debt Hits $4.7 Trillion in Q2 as Delinquencies Increase
World Property Journal
The Mortgage Bankers Association reports that U.S. commercial mortgage debt reached $4.7 trillion in Q2 2024, with delinquency rates rising across most investor groups. The CMBS sector saw the most significant increase, with delinquencies rising 0.47 percentage points to 4.82%.

U.S. Home Prices Rose 0.5% in August, the Biggest Increase in 4 Months
Redfin
Despite a slow summer for home sales, U.S. home prices grew 0.5% in August, the largest month-over-month increase since April. This growth is attributed to persistently low housing supply, which remains almost 30% below pre-pandemic levels.

Confidence Rises Among US Home Builders as They Await Fed Move
Yahoo Finance
U.S. home builder confidence increased in September for the first time in six months, rising 2 points to 41. This uptick comes as builders anticipate the Federal Reserve's expected interest rate cut, which could lead to lower mortgage rates and increased buyer activity.

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