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Higher Rates Probably Won’t Help Commercial Cap Rates: NAR

Thursday, Apr 28 2022
Commercial Lending
Written by  The Mortgage Leader

Capitalization rates for commercial real estate will probably continue to compress in 2022 despite upward pressure from rising interest rates. That’s according to a blog post by economists at the National Association of Realtors.

arrow 306811 640 smallCommercial real estate prices will likely continue to rise, because higher mortgage rates tend to increase demand for rental units, the NAR notes.

“Because of the inverse relationship between cap rates and prices, the cap rate compression corresponds to a sharp rise in sales prices,” according to the blog post.

Read the blog post from the National Association of Realtors.

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