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Real Estate

U.S. Real Estate: Dispersion Shaped by Shocks

April 2026 – 4 min read

Macro shocks reinforce the importance of asset-level and micro-location relevance in a market defined by dispersion.

Executive Summary

ECONOMY

  • The U.S. real estate market faces another macro shock. While economists continue to forecast economic resilience, it is not without cost: GDP forecasts have been lowered and inflation projections have increased following the Iran conflict.
  • Economic growth is driven by a relatively narrow set of underlying fundamentals—such as higher income households, AI and infrastructure investment and government deficits—while business earnings are supported by a cooler labor market.
  • The U.S. Federal Reserve (Fed) is set for new leadership under Kevin Warsh, and markets have repriced the interest rate outlook given energy supply and inflation concerns.

PROPERTY MARKETS

  • Real estate fundamentals improved in the first quarter, with positive absorption across core property sectors, while senior housing occupancy reached its highest level since 2017. The overall market has also benefited from lower rates of new supply.
  • Debt markets remained active in the first quarter despite the macro environment, with increased competition across most lender types. Property sales increased year-over-year, while the debt maturity wall provided significant refinancing volumes.
  • Dispersion remains a key market feature, with property performance widening across property types and markets.

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Lincoln Janes, CFA

Senior Director, Real Estate Research & Strategy

Important Information

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Forecasts in this document reflect Barings’ market views as of the preparation date and may change without notice. Projections are not guarantees of future performance. The value of investments and any income may fluctuate and are not guaranteed by Barings or any other party. Examples, portfolio compositions, and investment results shown are for illustrative purposes only and do not predict future outcomes. Actual investments may differ significantly in size, composition, and risk. No assurance is given that any investment will be profitable or avoid losses. Currency exchange rate fluctuations may impact investment value.

Investments involve risks, including potential loss of principal. Past performance is not indicative of future results. Investors should not only base on this document alone to make investment decision.

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