Is the Market Reaction to Tariff Uncertainty Coming to An End?

The Weekly Recap

Good morning and happy Friday! US and China agreed to a pause in escalated tariffs as it approaches a formalized trade deal. The tentative agreement has reduced Wall Street’s perception of a potential recession, Manhattan rents ‘bounced back’ to a record high with a hint at more increases to come, One World Trade Center Leased out its top floors, inflation was at its lowest level in four years and you can now buy a coffee for $44 at Starbucks.

If you missed last weeks newsletter Stock Market Volatility is a Boon for Real Estate, you can read that through the link.

Is the Market Reaction to Tariff Uncertainty Coming to An End?

Investor sentiment today is showing signs of cautious optimism as global markets stabilize and key trade deals reduce tariff-related uncertainty. With agreements now in place between the U.S. and major partners like China, Canada, and the UK, many investors are reassessing risk exposure and gradually reentering sectors that had been on pause during the height of the trade tensions. Equity markets have rebounded sharply since Liberation Day, reflecting renewed confidence in the economic outlook and signaling that the worst of the disruption may be behind us.

In New York City specifically, real estate investors are anecdotally reengaging, though with a disciplined and strategic approach. Luxury buyers are returning to the market, drawn by softer pricing in high-end inventory and the long-term strength of New York as a global asset hub. The commercial sector is also seeing renewed interest, especially as office and mixed-use properties are repriced to reflect post-pandemic and post-tariff realities. Value investors are stepping in to take advantage of discounted assets in core locations. Meanwhile, the multifamily market remains a focal point for both domestic and international capital, with strong rent growth, limited vacancies, and ongoing demand driving investor confidence.

The easing of tariffs on materials such as steel, aluminum, and lumber has brought some much-needed predictability to construction costs. As a result, development pipelines can be expected to recover, particularly in segments where demand remains robust. Recent data shows a modest increase in new building permits and construction lending, especially for mid-market and luxury residential projects. Developers and investors alike are welcoming this newfound stability, using it to reassess paused projects and reallocate capital with greater certainty.

Adding to the positive momentum, inflation is finally easing, giving both consumers and businesses greater financial breathing room. While price pressures remain in certain segments, the broader cooling trend is supporting renewed activity and improved underwriting conditions across the real estate sector.

While the Federal Reserve has signaled potential rate cuts later this year, the timing and scale remain unclear, keeping financing strategies fluid. For New York City real estate, this means quality assets in prime locations are poised to benefit most, as investors prioritize long-term value over short-term speculation in a post-tariff, fear driven landscape.

Market Performance

Here are how some other indexes and asset classes have performed as of this Mornings opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan.

Mortgage Rate Update

Mortgage rates rose slightly week over week and remain below the 7% threshold for the 17th straight week. Stable rates along with moderately rising inventory are attracting homebuyers into the market, with purchase application activity up 18% YoY

News You Can Use

• Wall Streets Sudden Rebounded Catches Investors ‘Offside’ Financial Times

• US, China to Slash Tariffs During 90-Day Reprieve for Talks Bloomberg

• S&P 500 Turns Positive for the Year Yahoo Finance

• Inflation Coolest in Four Years in April Axios

• The China Tariff Pause Has Wall Street Scaling Back Recession Calls Yahoo Finance

• Options Traders Abandon Fed Rate-Cut Bets on Tariff Optimism Bloomberg

• US Budget Surplus Surges to $258B in April Reuters

• Annual Inflation Rate Hit 2.3% in April, Less than Expected and Lowest Since 2021 CNBC

• Manhattan Rents at Record Highs Hint at More Increases to Come Bloomberg

• Tallest NYC Tower to Lease Its Highest Floors for the First Time Bloomberg

• The $44 Starbucks Drink NY Post

The Deep Insight

Contact Me

Feel free to reach out to discuss more in-depth about your real estate goals, share your thoughts about my newsletter, or to share what you're experiencing in this market. Looking forward to hearing from you!