News

CREFC’s 2Q 2025 Sentiment Index Jumps as CRE Market Optimism Rebounds

Download Survey

New York, July 30, 2025 – The CRE Finance Council (CREFC), the industry association representing the $6.2 trillion commercial and multifamily real estate finance sector, today released its Second-Quarter 2025 (2Q25) Board of Governors (BOG) Sentiment Index survey results. The index surged 27.8% to 112.3 from 87.9 in 1Q25, marking a decisive return to positive territory, reversing last quarter’s sharp decline, and climbing back above the neutral 100 baseline.

• Economic Outlook: Sentiment flipped positive, with only 27% of respondents expecting worse economic conditions over the next 12 months, a dramatic improvement from 80% last quarter. 54% expect stable conditions and 19% anticipate improvement.
• Federal Policy: Governors see a much more favorable policy landscape, with 49% expecting a positive impact from government actions (up from 11% in 1Q25) and only 16% anticipating a negative impact (down from 59%).
• Rate Impact: Positive shift with 38% seeing favorable rate movement (up from 30%), while negative sentiment dropped to 27% (from 30%).
  
• CRE Fundamentals: The outlook for fundamentals stabilized, with only 19% of respondents expecting worsening conditions (down from 50% last quarter). 81% now foresee fundamentals improving or remaining unchanged.
  
• Transaction Activity: Expectations for investor demand soared, with 65% predicting more demand (up from 35%) and only 3% expecting less demand (down from 20%).
  
• Financing Demand: The board is exceptionally bullish on financing demand. 86% of respondents expect more borrower demand, up from 48% in 1Q25. Notably, 0% of respondents expect less demand.
  
• Market Liquidity: Confidence in capital availability returned, with 92% expecting better or the same liquidity (up from 74% last quarter) and only 8% expecting worse conditions (down from 26%).
  
• Overall Sentiment: The industry’s overall outlook showed a robust recovery, with 49% now holding a favorable view (up from 22%) and only 8% remaining negative (down from 43%).

Additional Topical Insights:

Contact 

News Archive

News

CREFC’s 2Q 2025 Sentiment Index Jumps as CRE Market Optimism Rebounds

Download Survey

The CRE Finance Council (CREFC) today released its Second-Quarter 2025 (2Q25) Board of Governors (BOG) Sentiment Index survey results. The index surged 27.8% to 112.3 from 87.9 in 1Q25, marking a decisive return to positive territory, reversing last quarter’s sharp decline, and climbing back above the neutral 100 baseline.   
 
Conducted from July 8 to July 22, 2025, the survey captured a dramatic shift in sentiment as market participants adapted to the evolving economic landscape and found renewed optimism in stabilizing interest-rate expectations and improving capital market conditions. The rebound represents one of the strongest quarterly improvements in the index’s history.
  
Key Highlights From 2Q25 Index Core Questions:

• Economic Outlook: Sentiment flipped positive, with only 27% of respondents expecting worse economic conditions over the next 12 months, a dramatic improvement from 80% last quarter. 54% expect stable conditions and 19% anticipate improvement.
• Federal Policy: Governors see a much more favorable policy landscape, with 49% expecting a positive impact from government actions (up from 11% in 1Q25) and only 16% anticipating a negative impact (down from 59%).
• Rate Impact: Positive shift with 38% seeing favorable rate movement (up from 30%), while negative sentiment dropped to 27% (from 30%).
• CRE Fundamentals: The outlook for fundamentals stabilized, with only 19% of respondents expecting worsening conditions (down from 50% last quarter). 81% now foresee fundamentals improving or remaining unchanged.
  
• Transaction Activity: Expectations for investor demand soared, with 65% predicting more demand (up from 35%) and only 3% expecting less demand (down from 20%).
  
• Financing Demand: The board is exceptionally bullish on financing demand. 86% of respondents expect more borrower demand, up from 48% in 1Q25. Notably, 0% of respondents expect less demand.
  
• Market Liquidity: Confidence in capital availability returned, with 92% expecting better or the same liquidity (up from 74% last quarter) and only 8% expecting worse conditions (down from 26%).
  
• Overall Sentiment: The industry’s overall outlook showed a robust recovery, with 49% now holding a favorable view (up from 22%) and only 8% remaining negative (down from 43%).

Additional Topical Insights:

Contact 

News Archive

News

Bank Capital Conference Hints at Significant Reform

July 29, 2025

On July 22, the Federal Reserve hosted a highly anticipated conference on the state of and potential reforms to the bank regulatory capital framework. Fed Chair Jerome Powell and Vice-Chair of Supervision Michelle Bowman were both in attendance. 

• Leverage ratio reform
• Evolution of the capital framework
• Reforms to the Global Systemically Important Bank surcharge (G-SIB) framework 
• Evaluating the stress test regime
• Chief Financial Officers' perspectives on reforms to the capital framework

Basel III: The Central Theme at the Conference 

• Most participants favored moving forward with Basel “Endgame” implementation, but with tailoring to account for bank size and business model. 
• Many panelists voiced concerns about the risk of double-counting capital requirements given overlaps between stress testing frameworks and Basel III. 

Other key themes included the need to:

• View the capital framework holistically rather than as a loose compilation of different rules. Speakers consistently argued that changes in one part of the framework (e.g., leverage ratios, G-SIB surcharge, stress tests) can have unintended consequences or create redundancies elsewhere, leading to suboptimal outcomes.
• Approach regulation pragmatically, focusing on identifying problems and developing efficient, simple solutions. Many speakers advocated for reducing bureaucracy, streamlining processes, and ensuring clearer, more predictable rules to enhance banks' abilities to serve customers and support economic growth.
• Ensure greater transparency in regulatory models, scenarios, and data to help identify and correct flaws, build trust with the public and investors, and enable banks to better manage risk and capital needs.
• Prevent regulations, particularly the enhanced supplementary leverage ratio (eSLR) and GSIB surcharge, from disincentivizing bank engagement in low-risk activities (like Treasury market intermediation) or pushing credit origination outside the regulated banking system.

Contact  

News Archive

News

CBO Report Examines GSE Conservatorship Exit Costs

July 29, 2025

The nonpartisan Congressional Budget Office, which is tasked with calculating the federal budgetary costs of proposed legislation or policy changes, recently issued a report that examines the costs and benefits of ending Fannie Mae and Freddie Mac (the GSEs) conservatorship. 

• “If CBO no longer considered the GSEs to be government entities, it would incorporate the estimated cost of any explicit federal guarantee in its future cost estimates and baseline projections.”
• As a reminder, the pre-2008 guarantee was “implicit” such that investors expected the government would step in to ensure timely repayment of defaulted loans—which it did. 
• The Treasury’s support is explicit to the entities themselves, but not the MBS. A change in the conservatorship would open questions on how the government would backstop the GSEs or mortgages. 
• Even if the guarantee were implicit, CBO says it would consider assessing the costs: “Before the GSEs were placed in conservatorships, CBO did not incorporate their implicit federal guarantee in its budget estimates. But the events of 2008 provide support for recording the cost of such a guarantee if the GSEs were released from government control without an explicit federal backstop.”

Go deeper: The report’s seven considerations are listed below: 

1. CBO projects that the GSEs’ future mortgage guarantees have a budgetary cost.
2. CBO treats the GSEs as if they were part of the government.
3. Releasing the GSEs from government control would result in both federal savings and federal costs.
4. CBO projects the budgetary effects of the GSEs’ mortgage guarantees on a fair-value basis.
5. CBO’s baseline budget projections and cost estimates incorporate administrative and judicial actions.
6. CBO would incorporate the cost of the Treasury’s implicit or explicit commitments to the GSEs in cost estimates.
7. CBO’s estimate of the proceeds earned from selling the Treasury’s shares in the GSEs would depend on many factors.

Contact David McCarthy (dmccarthy@crefc.org) with any questions. 

Contact 

News Archive

News

Senate Banking Requests Feedback on Crypto Legislation

July 29, 2025

Now that the House has cleared three digital asset bills, the Senate is beginning robust consideration of the market structure legislation that would set up a regulatory regime for digital asset investments and exchanges. 

• The legislation is focused on digital assets, but it contemplates updates to “investment contract” definitions and numerous reporting regulations. 
• While the intent is to update the law to allow for a digital asset market and oversight, it is important that lawmakers receive feedback from existing securities market participants on potential intended or unintended consequences of the effort. 
• CREFC will send additional details to our Legal Advisory and Advocacy Committees. 

Please contact David McCarthy (dmccarthy@crefc.org) with any feedback, responses, or questions on the RFI. 

Contact 

News Archive

News

Congressional Outlook: Bipartisan Housing Bills on Tap

July 29, 2025

August recess is almost here, but Congress will have a busy fall with the September 30 government funding deadline. 

• The House is out until September, and the Senate is expected to wrap up late this week after working through confirming nominees. 
• Additionally, key legislators introduced bipartisan housing bills, and the Senate Banking Committee plans to hold a housing-focused markup today. 

Why it matters: The bipartisan, bicameral efforts on housing are a promising sign toward advancing legislation to target a variety of housing issues and needs. 

• Increasing Housing in Opportunity Zones: Enables the HUD Secretary to give added weight to applicants for competitive HUD grants that are located in or primarily serve designated Opportunity Zones to support housing preservation and construction.
• Build More Housing Near Transit Act: Amends the Capital Investment Grants (CIG) program in the Federal Transit Administration to provide an optional increased rating in the Federal Transit Authority’s evaluation process for projects in areas that establish pro-housing policy near public transportation routes.
• Revitalizing Empty Structures into Desirable Environments (RESIDE) Act: Creates a competitive pilot discretionary program within the HOME Investment Partnerships program if the annual appropriation exceeds $1.35 billion to convert vacant and abandoned buildings into attainable housing.
• Housing Affordability Act: Requires the Federal Housing Administration (FHA) to study multifamily loan limits and then grants HUD rulemaking authority, with FHA input, to adjust those limits to better match housing market costs and enhance affordability.
• For a section-by-section breakdown of the bill, click here. For legislative text, click here.

The Identifying Regulatory Barriers to Housing Supply Act, which aims to reduce state and local barriers to housing creation, was introduced by Republicans and Democrats last week.

• Representatives Mike Flood (R-NE) and Brittany Pettersen (D-CO) and Senators Brian Schatz (D-HI) and Todd Young (R-IN) introduced the House and Senate versions of the bill. 
• The bill highlights the restrictive practices embedded in traditional zoning laws, pushes communities to streamline excessive local regulations, and promotes greater openness in how neighborhoods are planned and developed. 
• The bill also reinforces the long-standing effectiveness of the Community Development Block Grant program in efforts to expand housing supply.
• A full copy of the legislation can be accessed here.

Contact  

News Archive