Fed Pauses Rate Hikes after Favorable Inflation Report

July 9, 2025

Since March of 2022 the Federal Reserve has raised rates at every meeting. With signs of inflation easing, the Federal Reserve made a noteworthy decision to pause interest rate increases. The central bank aims to carefully balance the need for price stability with sustaining economic growth. By keeping interest rates unchanged, the Federal Reserve intends to provide ongoing support for the economy and encourage lending and investment.

The Impact on Real Estate:

The Federal Reserve's decision to pause interest rate increases can have both direct and indirect effects on the real estate market. Here are a few key considerations:

  1. Mortgage Rates: Interest rates heavily influence mortgage rates, which play a vital role in home affordability and investment real estate. When interest rates remain stable or decrease, potential commercial real estate investors may find it more appealing to enter the market or refinance existing mortgages. This can stimulate demand and drive up property prices.
  2. Investor Sentiment: Real estate investors often monitor interest rate movements as they impact the overall cost of financing investment properties. With the pause in interest rate increases, investors may find it favorable to secure loans at lower rates, potentially leading to increased investment activity in the real estate sector.
  3. Market Stability: Interest rate fluctuations can influence market stability. A sudden rise in rates could cool down demand, resulting in a potential slowdown in real estate transactions. However, a pause in interest rate increases can provide a sense of stability and confidence to buyers, sellers, and investors, fostering a more balanced and active real estate market.
  4. Inflation Hedge: Real estate has long been considered a hedge against inflation. As prices rise, real estate assets may retain or increase their value, providing a level of protection against the eroding effects of inflation. The pause in interest rate increases allows investors to consider, once again, real estate as a potential safeguard for their wealth.

Conclusion

The recent inflation report and the Federal Reserve's decision to pause interest rate increases have sparked discussions across various sectors, including real estate. The stability in interest rates can have a positive impact on mortgage rates, investor sentiment, market stability, and real estate's role as an inflation hedge. As the economy continues to evolve, it is important for individuals and professionals in the real estate industry to stay informed about these economic indicators to make well-informed decisions.

Disclaimer: The information provided in this blog post is for educational and informational purposes only and should not be construed as financial or investment advice. Readers are encouraged to seek professional guidance before making any real estate or financial decisions based on this information.

Image of a realtor agentPeter James

Peter James is a First Vice President at Lyon Stahl Investment Real Estate and Co-Founder of The James Group, a leading Los Angeles–based investment brokerage team specializing in the sale of multifamily properties. Since beginning his career in 2007, Peter has built a strong reputation as a trusted advisor in the Los Angeles apartment market, with deep experience across the Westside and surrounding submarkets.

Peter advises investors on the acquisition and disposition of multifamily assets throughout Los Angeles County. His approach combines detailed financial analysis, real-time market insight, and a clear understanding of investor objectives, allowing him to guide clients through both straightforward and highly complex transactions.

In addition to traditional multifamily brokerage, Peter has extensive experience structuring and executing 1031 exchanges, including transitions into single-tenant NNN properties and Delaware Statutory Trust (DST) investments nationwide. His ability to navigate tax-deferred strategies and long-term portfolio planning has helped clients preserve capital, increase cash flow, and achieve greater flexibility across market cycles.

As Co-Founder of The James Group, Peter has helped build a collaborative, high-performing team known for integrity, disciplined execution, and market expertise. He maintains strong working relationships with lenders, attorneys, and qualified intermediaries, ensuring that each transaction is coordinated efficiently and aligned with his clients’ broader financial and investment goals.

Outside of real estate, Peter enjoys spending time outdoors with his wife, Jessica, and their daughters, Dylan and Daphne. Whether surfing, snowboarding, or exploring the California coast and mountains, family and an active lifestyle remain central to his life. Peter is a graduate of the University of California, Riverside.

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