Shafiq Hirani CCIM breaks down three market shocks hitting apartment owners: the 10-year Treasury yield at 4.95%, the 30-year mortgage rate at 7%, and oil surging to $107 per barrel due to Iran conflict. Canada's new tariffs on building materials are raising renovation costs while rent growth stays flat at 2%, squeezing net operating income.
3 shocks hit the market this week. All 3 land on your building. And the Fed meets Wednesday, right in the middle of it. If you own apartments, here's what happened. The 10-year Treasury hit 4.95%, the highest since 2023. That's the number that prices your loan, and the 30-year mortgage just hit 7%. If you were planning a refinance at 4%, that world is gone. Oil crossed $107 a barrel as the Iran conflict escalated. Energy drives the inflation the Fed is fighting, so when oil spikes, yields climb behind it. Canada's tariffs took effect this week. Building materials are in the crosshairs— lumber, fixtures, appliances. That hits your turn costs, And every project you've got planned. So, what does it mean for the Fed on Wednesday? A rate hike is genuinely on the table. Hot inflation, a 5% 10-year, and an oil shock give them all the COVID they need. The debate isn't whether they cut anymore; it's whether they hold or hike. Here's your problem: costs are rising from 3 directions at once, and rents are growing about 2%. When expenses climb this fast, and rents don't, your NOI shrinks even at full occupancy. You can't control the 10-year, oil, tariffs, or the Fed. You can control your NOI. It's the only lever that offsets all 4. I'm Shafiq Hirani. I break down what the market means for apartment owners. Follow if that's useful.
