Drunk Real Estate 109. Inflation Is Cooling, But Is Real Estate Still in Trouble? with Ashley Wilson and Danille McElroy
Aug 28, 2025
Ashley Wilson, a multifamily real estate investor, and Danille McElroy, co-host of the Ken McElroy Show, share their insights on the evolving real estate market. They discuss the recent cooling of inflation and what it means for future Fed interest rate cuts. The conversation touches on the optimism in the stock market versus the apprehension among real estate investors. They also delve into the struggles of commercial real estate, the regional differences in the housing market, and whether 2025 will present opportunities or challenges for investors.
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Market, Not Fed, Largely Sets Rates
- Interest rates are driven more by market supply/demand for treasuries than by Fed commands.
- Investor expectations about inflation and safety preferences largely set mortgage and treasury yields.
Treasury Yields Mirror Inflation Expectations
- Treasury yields reflect expected future inflation because investors demand returns that offset purchasing-power loss.
- Predicting inflation expectations helps forecast mortgage, auto, and credit-card rates.
Commercial Markets Look Ahead Months
- Commercial investors price deals using older valuation data and longer close timelines than residential buyers.
- That lag makes commercial markets look ahead several quarters, altering reaction speed to rate or valuation changes.
