Location Strategy Chartbook 09.13.2025

Data for August showed that the core consumer price index, which excludes the often-volatile food and energy categories, increased 0.3% from July. But when those components are included, the overall CPI rose 0.4%, the most since the start of the year.

Prices for cars, clothing and appliances all rose as goods prices, excluding food and energy, accelerated 0.3%, matching the biggest climb since May 2023. Not all of that is the result of tariffs, to be sure, but economists continue to warn that the cost of the duties may yet to flow through to consumers.

US wholesale inflation unexpectedly declined in August for the first time in four months, adding to the case for the Federal Reserve to cut interest rates. The producer price index decreased 0.1% from a month earlier and July’s figure was revised down, according to a Bureau of Labor Statistics report out Wednesday. From the year before, the PPI rose 2.6%.

The report suggests companies refrained from outsize price increases last month despite higher costs from tariffs. While the step back follows a sizable advance in July, many firms have been wary that steep markups could push customers away at a time when economic uncertainty continues to weigh on spending decisions.

Joe Weisenthal, Bloomberg: Weekly initial jobless claims just came in way higher than expected.

• 263K vs. 235K expected

• This was the highest in almost 4 years

Once rare, seven-year car loans are fast becoming the norm. They’re often the only way buyers can afford new rides, with average sale prices surging 28% in five years to approach $50,000. Compared to a five-year loan, they can make the difference between a $1,000 monthly payment and a $780 one. In the second quarter of 2025, seven-year loans represented 21.6% of all new-vehicle financing, according to Edmunds.com. Six-year loans, at one time considered the upper end of the range, are now the most common, accounting for 36.1% of loans in the second quarter. Some buyers are even going for eight-year loans, although they’re still a tiny fraction of the market.

Activity across all mortgage types jumped this week, according to data from the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending Sept. 5. Applications increased 9.2% from one week earlier.

By product type and activity, the VA loan share increased to 15.3% while the FHA loan share dipped slightly to 18.5%, a figure that is likely to change trajectory given sub-6% rates.

Several large lenders have noticed the shift for government loan appetite. A United Wholesale Mortgage spokesperson told HousingWire that loan volume at UWM has increased significantly, with government loans accounting for a healthy portion of that growth. “The recent rate drops have encouraged consumers across the board to move off the sidelines and take advantage of the numerous refinance and purchase opportunities available today. It’s a busy and exciting time for UWM and our partners, and we believe this momentum will continue to build,” they said.

NAR: More baby boomers are buying homes in America than people under 35 in 2024, is this a trend that will continue?

At 42%, buyers aged 60-78 vastly outnumbered millennials, who accounted for 29% of those purchasing a home. What's more, the average age of first-time home buyers hit an all-time high of 38 last year, even as the market share commanded by first-timers hit an all-time low of 24%. And roughly 95% of buyers younger than 44 used a mortgage for their purchase, while 40-50% of those older than 60 were able to use cash.

Redfin: One-third (33.5%) of baby boomers who own their home say they’ll never sell, according to a recent Redfin-commissioned survey. Another 30% say they’ll sell their home at some point, but not within the next decade.

Older people are even less likely to sell, with nearly half (44.6%) of Silent Generation members never planning to sell.

Younger homeowners are more likely to eventually part ways with their house: 25% of Gen Xers and 21% of millennial/Gen Zers say they’ll never sell.

NAR: From Homeowners to Renters: Boomers Seek Flexibility

If they decide to sell their home, baby boomers—those born between 1946 and 1964 and estimated to number about 76 million—might not want to reinvest their equity in another property. Many favor renting, according to Freddie Mac. Among the reasons:

• Greater affordability and better control over monthly expenses through a lease instead of mortgage, property taxes, homeowners insurance and maintenance

• Readily available services from on-site management, such as package delivery or plant watering, as seen in communities by Optima, Inc.

• More freedom to lock up and travel

• Greater opportunity to invest capital in non-real estate assets

• Flexibility to move if desired

• Preference to own only one property, typically a vacation or primary home

• Proximity to children and grandchildren

LS Commentary: A list of wants that have been identified repeatedly but is largely absent from the existing built landscape whether it be in apartments, BTR, condos that are NOT senior living communities

• Single Level

• Short distance to building entrance, parking or direct entry. The number of steps is a mobility and accessibility concern

• New, turnkey

• Walkable to services, shopping, grocery

• Community: in building or subdivision or built in area that fosters community

• Amenities that keep them active

• In-house concierge

• Security

• Storage: it is a mental block to downsize from a larger home to a small unit that lacks storage for their keepsakes, extended families belongings, holiday goods, large furniture, etc

• Accommodates multiple pets

• Larger floorplans: with wide hallways and doorways for accessibility. 3+ bedrooms is often desired for an office, guest space, live in helper, and visitors/extended family. Extra bedrooms also can be used as storage

• Sound proofing

• Air quality, ventilation, air cleaning/upgraded HVAC. Seniors are deeply afraid of becoming sick and the entire community spreading disease that may kill them. Secondly this mitigates smells from neighbors

• Outdoor space: private outdoor space is highly desired for seniors lacking mobility or needing privacy but also communal space

• Private garages- whether they are direct access or not, highly desired

Millennials are within their primary working yeas, are buying homes more or less quickly depending on the metro area. In some places, 1 in every 25 residents between the ages of 25 and 44 purchased a home with a conventional mortgage just in 2024 alone. In other major metros, less than 1 in 100 Millennial-aged residents last year.

This disparity can cause divergent implications for local infrastructure, politics, and business demand among different metros. Particularly with many Millennials at the peak of their earning potential, local tax bases, housing markets, and more may also be impacted by such trends. Observed from another angle, high rates of Millennials investing in homes in an area may indicate prosperity in the job market, paired with a friendly housing market and economy.

SmartAsset ranked 41 of the largest U.S. metro areas with available data to determine the places where the local Millennial population purchased the most houses in 2024.

• Millennials are snatching up homes most quickly in the Raleigh-Cary, NC metro. 4.5% of residents aged 25 to 44 bought a home with a conventional mortgage in the Raleigh-Cary metro in 2024, the largest share studywide. A total of 19,735 conventional mortgages were issued to this age group, with the median property value at $455,000. These new homeowners have a median income of $138,000.

• Over 60,000 mortgages were issued to Millennials in 2024 in the Houston, TX metro. This was the highest raw number of new Millennial homeowners nationwide, outranking metros like New York City and Los Angeles, which have much larger total populations. When accounting for its population size, the 61,826 Millennial mortgages issued accounted for just 2.85% of residents in that age bracket, putting the Houston metro at 27th overall.

• In the San Francisco Bay area, only 0.52% of Millennials purchased homes. With a total of just 6,993 mortgages issued, the San Francisco-Oakland-Fremont metro is the least popular among Millennial homeowners. At the same time, the new Millennial homeowners here have the highest median income studywide at $331,500.

• Similarly, low rates of home purchases by this cohort were evident in the metros of New York City (0.76%) and Miami (0.94%).

• The median property value purchased by Millennials in the San Jose area was $1.565 million. Millennials in the San Jose-Sunnyvale-Santa Clara area are buying the most expensive homes studywide, outpacing the median property value purchased in the San Francisco Bay area by $60,000. In all, 2.06% of Millennials in the San Jose area purchased a home in 2024.

Office loan distress heads higher: Troubled office property loans that are part of commercial mortgage-backed securities, already at or near their highest levels this century, keep growing.

The delinquency rate for office loans jumped 0.6 percentage points in August to 10.2%, according to bond rating firm S&P Global. The surge makes the sector the worst-performing in the $664.4 billion CMBS market, with 433 delinquent loans totaling $17.6 billion.

The distress comes amid widespread shifts in work patterns, declining occupancy rates and high borrowing costs.

CMBS loans can take different shapes. Some are issued as single-asset, single-borrower offerings, while others are so-called conduit deals that pool loans backing multiple properties originated for a wide spectrum of borrowers, from single private investors on smaller properties to large institutional investors.

Restaurants, bars, and coffee shops are fueling the retail real estate market, accounting for nearly a fifth of all new leasing over the past year, as Americans spend record sums dining out despite higher prices.

New Census Bureau data shows consumers shelled out more than $100 billion at restaurants and coffee shops in July, a 5.6% increase over the past year and nearly 50% more than at the start of the pandemic, underscoring both the resilience of demand — as customers desire value and convenience — and the sector’s expanding footprint.

The largest 50 quick-service restaurants by total sales opened 2,722 more locations than they closed in 2024, a nearly 20% rise from 2022 and 2023, when there were about 2,300 net new stores. That's according to Quick Service Restaurant Magazine’s annual report on the largest and fastest-growing of these U.S. eateries.

Leading the way in expansion for the third year in a row was Starbucks, opening a net new 589 locations in 2024. Starbucks has opened over 1,600 new locations since the start of 2021, 40% more than the second-fastest expander, Krispy Krunchy Chicken. The Louisiana-based restaurant operator has been rapidly expanding in convenience stores, truck stops, universities and big-box retailers throughout the country using a store-in-store model.

Denver landlords are dropping rents and offering generous concessions to boost occupancies as the market's seasonal slowdown approaches.

Apartment rents fell 0.9% in August from the previous month, according to CoStar data. This comes on the heels of a 0.3% decline in July and a 0.2% decline in June.

Overall, rents are down 0.1% from the start of the year.

Nearly all areas in Denver are reporting negative annual rent growth. The steepest declines are occurring in construction-heavy areas like Aurora, where rents are down 6% from the previous year. Downtown Denver has also reported heavy losses, with annual rents down 3%.