August Market Rate Update
Each month, the IAACU Small Business Team aims to provide you with insights into current trends in commercial real estate market rates, which are influenced by movements in the U.S. Treasury yield.
July Rate Performance: A Historic Low
The 5-year U.S. Treasury rate recorded its lowest volatility so far this year. Throughout July, the rate remained confined within a narrow 21-basis-point range, marking a period of exceptional stability. In addition to low volatility, July also saw the lowest “high” interest rate for the 5-year Treasury since September 2024, reinforcing the trend toward calmer market conditions.
Market Outlook: Momentum Toward Lower Rates
The combination of reduced volatility and lower peak rates suggests a continued downward trajectory for interest rates. Barring any unexpected developments—such as inflationary spikes or disruptive economic, political, or geopolitical events—this momentum is likely to persist through August.
Implications for Commercial Real Estate Financing
If current trends hold, borrowers with strong credit profiles and stabilized, high-quality assets could benefit from more favorable financing terms. At IAA Credit Union, rates for such borrowers are expected to settle in the low 6.00% to 6.50% range, offering a compelling opportunity for commercial real estate investment.
Ready to get started? Contact our Small Business team to see what we can do for you!
Ready our July Market Rate Update.
*Rates from Resource Center | U.S. Department of the Treasury as of August, 2025.
