What is the Impact of Household Savings on CRE

Written By Marc Nicholson

WHAT FALLING CONSUMER SAVINGS MEANS FOR CRE SPACE DEMAND?​

Savings Burn-Off Begins to Weigh on Retail Sales ​

  • After surging during the pandemic, total savings realign with pre-pandemic trend​

  • Inflation-adjusted core retail sales were down 0.1% year-over-year in June​

Impact on Space Demand Varies By Asset​

  • Retail and Industrial Absorption has slowed from 2022 levels, but still positive in the first half of 2023​

  • Burn-Off of savings could constrain home sales, benefiting apartment demand​

Fed Rate Hikes Remain The Major Question Mark​

  • Despite decreasing inflation in June, the Fed previously stated the chances of a July rate hike are high​

  • Flattening retail sales and a return to pre-pandemic savings levels are signs that a soft-landing is within reach if the Fed avoids over-correcting​

*Through June​
Inflation Adjusted Using May 2023 Core PCE​
Sources: Marcus & Millichap Research Services, U.S. Census Bureau, Board of Governors of the Federal Reserve System ​

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Marc Nicholson
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