Why Real Estate Should Be on Your Radar as Markets Go Haywire
Something weird is happening in the markets right now. Many expects the Federal Reserve to cut interest rates in the next two weeks. You'd think that would make borrowing cheaper, right? Not quite. At the same time, the interest rate on a 30-year U.S. Treasury bond has climbed back toward 5%—a level we haven't seen since the 2008 financial crisis.
So, what's going on? And why should it matter to you, a savvy investor?
The Big Disconnect: The Fed vs. Your Mortgage Rate
A common mistake people make is thinking that when the Fed cuts its rates, your mortgage rate automatically drops. That's not how it works. Mortgage rates are actually tied more closely to the 10-year Treasury bond yield, which lenders use as their long-term lending benchmark.
Here's the problem: bond yields are actually going up. Why? Because the U.S. government is spending a lot of money, and to get people to buy all that new debt, they have to offer a higher return. This is a sign that bond investors are losing faith in the U.S. economy, as they are selling off long-term bonds, which drives their prices down and their yields up. This makes mortgages more expensive, no matter what the Fed does with its short-term policy.
Why Real Estate Is a Safe Harbor in a Storm
This wild ride has left traditional investors in a tough spot. Bonds, which were once considered the safest asset, are now under pressure. This is where real estate can shine.
Unlike a stock that can drop in a single day, a property's value isn't on a minute-by-minute ticker. It's a real, tangible thing you can see and touch. While its value can change over time, it's not subject to the daily panic or excitement you see on Wall Street. Plus, it gives you two ways to make money:
Income: You get paid to own it through rental income.
Appreciation: The property's value can grow over time, giving you a bigger nest egg.
Americans seem to get this. A recent Gallup survey found that real estate was the top long-term investment choice for the 12th year in a row, beating gold and stocks by a wide margin (Gallup, May 2025). This isn't just a feeling; it's backed by a history of outperforming inflation for years.
Why 2025 Is a Generational Opportunity
This isn't just about playing defense; it's about a chance to get ahead. Even major financial powerhouses are now betting on real estate.
Morgan Stanley calls this year the start of a "new upcycle," pointing to falling inflation and more attractive property prices (Morgan Stanley 2025 Real Estate Outlook).
JPMorgan believes that core U.S. real estate could return over 8%, with value-add strategies topping 10% (JPMorgan 2025 Outlook). They've called it a "generational opportunity."
For long-term investors, this is your chance to enter the market while the cycle is resetting and get ready for the next wave of growth.
Finding Solid Ground
You can't get rid of volatility entirely, but you can choose where to face it. In times like these, real estate is a solid choice because it gives you income, protection from inflation, and the potential for long-term growth all in one package.
That's why at SolMidas, we believe real estate should be the core of any strong portfolio right now. It's not about guessing what the Fed will do. It’s about owning assets that keep working for you even when the rest of the market seems to go crazy.