21 November 2023
The commercial real estate (CRE) sector’s share in the S&P 500 has dwindled to just 5%, a low not seen even in the 2008 crisis. This decline is accompanied by decreased demand for CRE loans, falling property prices, and a surge in delinquencies, signaling deepening troubles in the sector. In contrast, the U.S. housing market’s reliance on the 30-year fixed-rate mortgage poses hidden financial risks, burdening lenders and taxpayers. The system’s sustainability is questionable, indicating a need for more balanced mortgage options like Adjustable Rate Mortgages (ARMs).