September 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.
Treasury Yield Trends: August Softness Sets the Tone for September
Following a modest decline in July, the 5-year U.S. Treasury yield continued to ease throughout August. The yield averaged approximately 3.80%, with daily closes ranging from 3.68% to 3.86%. This marks a continued decline from July’s average of 3.92%, and a more notable drop from June’s 4.10%, reinforcing the narrative of softening rate pressure.
The yield reached 3.86% multiple times in mid-August, reflecting cautious optimism amid moderate inflation and steady economic indicators. While the broader trend remains range-bound, the consistent downward drift suggests growing investor confidence that interest rates will remain stable in the near term.
September Rate Outlook
Looking ahead, the 5-year Treasury yield is projected to average around 3.72% in September, with a potential range between 3.65% and 3.80%, assuming no major surprises from inflation data or Federal Reserve commentary. This outlook reflects expectations of continued inflation moderation and a steady Fed policy stance.
Short-term volatility is still possible, especially around key economic releases, but the overall trajectory points toward a neutral to slightly lower rate environment.
Impact on Commercial Real Estate Loans
As Treasury yields ease, commercial real estate loan rates have become more favorable. As of early September, benchmark rates for owner-occupied properties start around 6%, with most quality deals falling between 5.99% and 7.10%, depending on asset class and borrower strength. Rates for Commercial Equipment Loans have remained steady, with competitive offerings in the low to mid 7% range.
This environment supports attractive financing opportunities for stabilized assets and strong borrowers.
What does this mean for you?
Connect with your Commercial Team to explore options for buying, refinancing, or expanding—we’re here to help you reach your goals.
Read our August Market Rate Update.
*Rates from Resource Center | U.S. Department of the Treasury as of September 5, 2025.
