From Yahoo Finance: 2025-05-12 11:24:00

Apartment buyers and sellers face challenges due to recent volatility in the 10-year Treasury rates. Financing and refinancing properties become harder as borrowing costs rise sharply, making deals more challenging to close. Investors must be patient, flexible, and seek opportunities to navigate the fluctuating market and close deals successfully.

The 10-year Treasury swung wildly in April, creating uncertainty for apartment investors. The market expects volatility, impacting interest rates for loans. Bond market fluctuations tighten financing screws, making it tough for buyers to underwrite properties. Lenders are stricter with underwriting, requiring more equity or creative structuring for deals to close.

Buyers struggle with uncertainty as the bond market’s volatility impacts interest rates, making it difficult to close acquisitions or refinance loans. The Treasury swings affect $300 billion worth of apartment loans maturing this year, posing hurdles for refinancing. Investor appetite cools as many wait for rate conditions to stabilize before making decisions.

Despite challenges, apartment investors show adaptability, finding opportunities in the volatile market. Success comes from assuming low-rate loans, structuring smarter debt, and focusing on property performance. Disciplined underwriting, stress testing, and flexibility across the capital stack are key to navigating changing market conditions for successful deals.

Buyers need to be cautious when shopping for financing, layering in a cushion for fluctuating rates. Fixed-rate financing offers predictability, while strategic asset allocation helps manage rising-rate environments. However, getting locked into long-term loans based on current Treasury rates can be risky, as caution is needed to avoid high-interest debt.

Read more: How investors are closing deals despite Treasury volatility