May 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.
From Steep Increase in March to Steady in April
Treasury yields continued to shift higher in April 2026 as inflation pressures, particularly energy‑related, remained elevated and the Federal Reserve reinforced a cautious stance that will be higher for longer than expected. The 5‑year Treasury averaged roughly 4.05% in April, up from approximately 3.92% in March, after briefly touching the low‑4% range earlier in the month. Intermediate and long‑term yields repriced higher as markets scaled back expectations for near‑term rate cuts, while the Fed held short‑term policy rates steady at its late‑April meeting.
From a commercial real estate perspective, financing conditions remain constructive but increasingly time‑sensitive. Loan pricing is still competitive relative to historical norms, yet higher Treasury rates are moderately increasing total borrowing costs. As a result, execution speed, early rate locks, and fixed‑rate strategies have become more critical. Borrowers fixing interest rates during periods of rate stability are generally achieving more predictable outcomes than those remaining exposed to variable‑rate volatility.
What This Means for You—Especially During Small Business Month
May is National Small Business Month, making this a timely moment for owner‑operators and small business owners to reassess capital structures. While ultra‑low benchmarks are likely behind us, today’s environment still supports attractive long‑term financing—particularly for businesses focused on cash‑flow stability and balance‑sheet resilience. Locking rates strategically can help small and mid‑sized companies protect margins, plan growth with confidence, and reduce exposure to further rate volatility as 2026 unfolds.
Contact our Small Business Team to see what we can do for you.
Read our April Market Rate Update.
Rates from Resource Center | U.S. Department of the Treasury as of May 6, 2026.
Graph from MarketWatch.
