February 2025 Market Rate Update
Each month, the IAACU Small Business Team aims to provide you with insights into the current trends in Commercial Real Estate market rates, which are influenced by movements in the US Treasury yield.
As the New Year kicked off, the 5-year U.S. Treasury interest rate continued its upward trend. It opened at 4.38% on January 2 and peaked at 4.61% by January 13. After reaching this high, the rate gradually declined, closing the month at 4.36%—just two basis points below where it started.
Short-Term vs. Long-Term Trends
While recent movement might suggest potential rate relief, the bigger picture tells a different story. From April to September 2024, the average 5-year U.S. Treasury rate declined month over month. Since then, however, it has consistently risen, with last month alone seeing a 19-basis-point increase.
What to Expect in February
Unless an unexpected global event triggers a sharp market correction and a “flight to safety” into U.S. Treasuries, we anticipate the 5-year Treasury rate to remain within the 4.20%–4.60% range throughout February.
Impact on Commercial Real Estate Loans
If this projection holds, commercial real estate loan rates at most financial institutions will likely stay between 7.45% and 8.00%+. At IAA Credit Union, however, rates range from 7.60% to 8.80%, offering significant savings exclusively for our Business Members.
Lock in a Competitive Rate Today
If you're considering purchasing commercial real estate, refinancing, or have a loan set to reprice this year, connect with Mark Wagner at IAA Credit Union before making any commitments.
Read our January Market Rate Update.
Contact our Small Business Team.
*Rates from Resource Center | U.S. Department of the Treasury as of February 5, 2025.
