June 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 Steady in April to Sustained Higher Rates in May
Treasury rates remained elevated throughout May as inflation pressures (largely driven by energy costs) continued to build. The 5-year Treasury Rate had an average rate of 4.22%, but it fluctuated between in the range of 4.00%–4.33%, reinforcing a cautious stance as it monitors persistent inflation. At the same time, inflation has moved higher again, and Fed commentary suggests rate cuts are becoming less likely in the near term, with some openness to potential rate increases if inflation does not ease.
Intermediate and long‑term Treasury yields have stayed firm as markets adjust expectations, shifting away from earlier assumptions of multiple rate cuts in 2026. The result is a continued “higher for longer” rate environment, keeping overall borrowing costs moderately elevated.
From a commercial real estate perspective, financing conditions remain constructive but increasingly time‑sensitive. Loan pricing is still competitive relative to longer-term averages, yet higher Treasury yields are pushing total borrowing costs up. As a result, execution speed, early rate locks, and fixed‑rate strategies remain key themes. Borrowers who lock rates during periods of stability are typically seeing more predictable outcomes than those exposed to variable-rate volatility.
What This Means for You, Especially as We Enter the Summer Months
While ultra-low rates are behind us, today's environment still supports long-term financing decisions, especially for businesses focused on cash flow stability and balance sheet strength. Locking in rates can help protect margins and provide greater certainty as economic conditions evolve.
Contact our Small Business Team to see what we can do for you.
Read our May Market Rate Update.
Rates from Resource Center | U.S. Department of the Treasury as of June 3, 2026.
