Retail, Office, and Housing Confidence: What’s Happening Now

The commercial real estate landscape is always shifting and three recent updates on retail sales, office attendance, and homebuilder confidence highlight some important trends worth watching.

Retail Spending Picks Up

Shoppers are back in action. In August, U.S. retail and food service sales climbed 0.6% from July and were 5% higher than the same month last year, according to the Commerce Department. That adds up to a massive $732 billion in spending. The biggest winners? Online-only retailers (+10.1% year over year) Clothing stores (+8.3%) Sporting goods and restaurants/bars also showed solid growth. What’s driving it? Higher-income households are fueling much of the momentum, while lower- income consumers are still feeling the pinch from a softer labor market and reduced disposable income. Economists expect this split to remain in place heading into 2026.

Retail spending picks up in August of 2025. U.S. retail and food service sales climbed 0.6% from July and were 5% higher than the same month last year.

Takeaway: Retail demand isn’t falling off…it’s uneven. For landlords, this means tenants serving higher income demographics may continue to outperform.

Office Attendance Hits a New Post-Pandemic High

The return-to-office trend has legs. For the week ending Sept. 10th, average office attendance across 10 major U.S. cities hit 55.8% of pre-pandemic levels, the highest since 2020. That’s based on keycard data from Kastle Systems, which tracks 2,600 buildings, and 40,000 tenant offices.

Here’s how some cities stack up:

Austin: 69.8%

Dallas: 63.5%

Houston: 62.9%

Chicago: 58.7%

New York: 58.2%

The trend line has been steady above 51% for much of 2025, showing that more companies are enforcing in-office policies.

Takeaway: While we’re still far from a full return, the direction is clear, offices are busier, which bodes well for owners trying to stabilize occupancy.

Homebuilder Confidence Rises (Cautiously)

After more than a year of pessimism, homebuilders are feeling a bit more optimistic. The National Association of Home Builders (NAHB) and Wells Fargo reported that builder expectations for future sales are at a six-month high.

Why?

Anticipation of an interest rate cut by the Fed Recent declines in mortgage rates, with the 30- year fixed now at 6.35%...the lowest since last October. Still, the overall builder confidence index remains at 32, which is historically low (anything below 50 signals a negative outlook). Construction costs are still high, and financing remains a hurdle. Takeaway: Builders aren’t breaking out the champagne yet, but lower borrowing costs could spur demand and improve activity in the housing sector.

The Bottom Line

Retail spending is proving resilient (though skewed toward higher earners), offices are steadily filling back up, and homebuilders are cautiously optimistic. For anyone watching commercial real estate, these signals suggest a market that’s stabilizing, but still shaped by broader economic pressures.