Overall distress rates by property type

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Parspec is an AI-powered platform for the commercial construction industry that streamlines product selection, specification, and procurement. It helps contractors, architects, and suppliers collaborate more efficiently and improve accuracy in building projects.

Record multifamily absorption signals strong start to 2025 link

• Over 138,000 market-rate units were absorbed in Q1 2025, the highest first-quarter number in over 30 years. Total absorption over the past 12 months reached 708,000 units, matching early 2022 boom levels.

• Occupancy hit 95.2% by March, the highest since October 2022, as rent growth regained momentum with a 0.75% monthly increase and 1.1% annual growth. All of RealPage’s top 50 apartment markets saw rents rise in March.

• Rent growth was strongest in Kansas City, Chicago, and Pittsburgh, while Austin and Phoenix saw the deepest rent cuts. Even in soft Sun Belt markets, March rent increases point to a rebound heading into the prime leasing season.

Multifamily and office CMBS most distressed despite overall rate decline link

• Overall CMBS distress fell to 10.6% in March 2025, down 20 basis points from February, with delinquency dropping to 7.9%. However, $14 billion in loans remain delinquent, and over $31 billion have passed maturity, with 36.3% of those being non-performing.

• Office CMBS distress remains the highest at 19.2%, followed by multifamily at 12.9%. Retail showed the most improvement, falling to 8.6% after five straight months of gains, while hotel distress jumped to 11.5%.

• Industrial CMBS distress held steady at just 0.5%, showing continued sector strength. The report suggests early signs of resilience in some sectors, but investors are still cautious.

February sales surge 30% year-over-year to $24.4B link

• Commercial real estate sales hit $24.4 billion in February 2025, up 30% year-over-year. Retail led the jump with 105% growth to $7.1 billion, followed by office at 55% and multifamily at 7%.

• Retail and industrial saw price gains of 5%, while hospitality prices fell 9% and office dropped 3%. The overall price index rose 1%, despite declines in three of the five major property types.

• Central business district office sales rose 217% year-over-year, including Sutter Health’s $450 million acquisition in San Francisco. Big multifamily deals included Ares Management’s $270 million Manhattan purchase and JBG Smith’s $194 million sale in Bethesda, MD.

Visualized: The cost of building a new home in the U.S. link

• The average cost to build a new single-family home in 2024 was $428,215, the highest recorded since NAHB began tracking in 1998. That’s about $162 per square foot for an average home size of 2,647 square feet.

• Interior finishes made up the largest share of construction costs at 24.1%, totaling roughly $103,000. Major systems rough-ins like plumbing, HVAC, and electrical followed at $82,000, or 19.2% of the budget.

• Builder confidence in 2025 is low due to high material costs and new tariffs, while demand is soft despite stable housing starts. Inventory of new homes for sale is at its highest since 2010, pushing builders to offer price cuts and incentives.

Five ways residential mobility has changed in the pandemic era link

• Overall household mobility hit a historic low of 8.2% in 2024, continuing a long-term decline despite a temporary spike in moves during the early pandemic. Interstate migration rose sharply to 2.5% in 2022 but fell back to 2.2% in 2023.

• Homeowner mobility rose to 6.8% in 2021 due to low mortgage rates but dropped to 5.5% by 2023 as millions became locked into those rates. This offset a recovery in renter mobility and dragged the total rate down.

• Migration to lower-density suburban and rural areas surged during the pandemic and stayed elevated through 2024. Urban counties saw consistent net outflows, while non-metro counties flipped from net loss to net gain in migration.

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